voa economic report - Agflation Raises Grain Prices, but Not Corn Ethanol

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is the VOA Special English Economics Report. Right now, people around the world are feeling the pain of ". ." Agricultural inflation has been hitting the price of grains other products. Food prices have risen under pressure from costs and growing world demand for food, as well local problems like the weather. In the United States, prices are reaching historic highs. And supplies have dropped lows not seen since the nineteen seventies. For one America's leading crops, the growing use of corn to fuel has driven up the price. The government has supported ethanol production. In two thousand five, Congress set national goal of using twenty-eight billion liters of ethanol year by two thousand twelve. President Bush and Congress since expanded that goal. As a result, farmers are more corn. But more hectares of maize for ethanol fewer hectares for crops like soybeans. Meat producers now to pay more for soybeans because there is less for animal feed. This is how corn-based ethanol affects price of meat products. Rising grain prices could signal change for agricultural commodities around the world. For years, countries have opposed government support for farmers in wealthy . They make the case that farm subsidies drive down for agricultural products, hurting poor farmers. Subsidies have been of the major disputes limiting progress in the Doha round of world trade talks. Now, there is worry the increasing demand for food could drive prices too , hurting the buying power of the world's poor. Many countries have a growing middle class. More people than have money to buy high-value agricultural products like meat milk. In China, for example, Premier Wen Jiabao has for increased milk production. More milking cows means the for more feed. Yet prices are not rising for agriculture-based products. In the United States, while the price corn remains high, it has not affected ethanol prices. fact, in recent months, those prices have dropped about percent. Production has expanded faster than demand, so now is a big oversupply of ethanol. And that's the Special English Economics Report, written by Mario Ritter. Transcripts archives of our broadcasts are at voaspecialenglishcom.. I'm Steve .

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