India a reason for food price rise

WASHINGTON: U S President George W Bush joined U S Secretary of State Condoleezza Rice in blaming the rising prosperity of India's huge middle class for the spiralling global food prices.

Prosperity in countries like India is "good" but it triggers increased demand for "better nutrition" which in turn leads to higher food prices, Bush said.

At an interactive session on economy in Missouri, Bush argued that there are many factors for the present crisis, only one of which was investment on biofuels like ethanol.

"Worldwide there is increasing demand. There turns out to be prosperity in developing world, which is good. It's going to be good for you because you'll be selling products in the countries, you know, big countries perhaps, and it's hard to sell products into countries that aren't prosperous. In other words, the more prosperous the world is, the more opportunity there is," the US President said.

"It also, however, increases demand. So, for example, just as an interesting thought for you, there are 350 million people in India who are classified as middle class. That's bigger than America. Their middle class is larger than our entire population.

"And when you start getting wealth, you start demanding better nutrition and better food, and so demand is high, and that causes the price to go up," he said.

The comments come close on the heels of Rice cooking up the theory that "apparent improvement" in the diets of people in India and China and consequent food export caps is among the causes of the current global food crisis.

Bush also listed change in weather patterns and increase in basic costs like that of energy as factors contributing to higher food prices.

"No question that ethanol has had a part of it. But I simply do not subscribe to the notion that it is the main cost driver for your food going up," Bush said.

Several international experts have in recent days held biofuels, until recently cast as a miracle alternative to polluting fossil fuels, for being responsible for usurping arable land and distorting world food prices.

"Actually, the reason why food prices are high now is because, one, energy costs are high, and if you're a farmer, you're going to pass on your cost of energy in the products you sell, otherwise you'd go broke.

"And when you're paying more for your diesel, paying more for your fertiliser because it's got a lot of, you know, natural gas in it, in other words, when your basic costs are going up, so does the cost of food," Bush said.

He said there are two aspects of rising food prices -- its effect on US citizens and the fact that there is a food scarcity in the world.

"We don't have a scarcity issue in America...We got a price issue. Our shelves aren't going empty, it's just costing more money," Bush said.

"There is scarcity in the world, and I happen to believe when we find people who can't find food we ought to help them find it," he said adding, "America is by far the most generous nation when it comes to helping the hungry."

"We're an unbelievably compassionate nation," he said.

"I think we ought to change our food policy in Africa and other developing countries...buying food directly from farmers as opposed to giving people food. I think we ought to be saying, 'Why don't we help you be able to deal with scarcity by encouraging your farmers to grow and be efficient growers? Otherwise, we're going to be in this cycle forever."