* Ethanol mandates "must be cut substantially"
* U.S. is major corn, wheat, soybean exporter
* Urges using stockpiles in emergencies, avoiding export
WASHINGTON, Aug 6 Drought in the U.S. farm belt
may result in higher prices for poor people around the world,
according to the head of an agricultural think tank who on
Monday also recommended a halt to ethanol production from corn.
Shenggen Fan, director general of the International Food
Policy Research Institute, said the global spike in food prices
in 2008 showed how poor crops and tight supplies have wide
impact. I FP RI is the analytical arm of a coalition of
agricultural research facilities.
Fan suggested six steps to rein in prices and head off
out-of-control prices caused by this year's drought.
More than 60 percent of the continental United States,
including prime grain territory, is under moderate to
exceptional drought. The Agriculture Department was scheduled to
make its first estimate of the fall harvest on Friday. Some
private analysts say the corn crop could be the smallest in a
"Food crop demand for biofuels, particularly in the United
States and European Union must be cut substantially, as should
mandates for ethanol content in fuel, to help relieve the
pressures on both domestic and global food markets," Fan said in
Ethanol production accounts for about 40 percent of the U.S.
He also urged nations to avoid export bans, to be ready to
use their stockpiles to address food emergencies, and continued
aid to expand food production in developing countries.
The United States is often the world's largest exporter of
corn, wheat and soybeans, so this year's drought would be felt
among its overseas customers as well as at home, where food
prices are forecast to rise. For example, Mexico and Egypt are
among the four largest buyers of U.S. corn, said Fan.
"Poor and vulnerable groups in developing countries are hard
hit by high and volatile prices of the agricultural commodities
they depend on for their primary daily caloric intake," Fan
said. "As experienced during the 2007-08 global food price
crisis, price movements in domestic markets can have significant
impacts on global markets, and vice versa."
World food prices fell for the past three months and are
15.4 percent below the record set in February 2011 on a price
index calculated by the U.N. Food and Agriculture Organization.
The FAO was scheduled to update the index on Thursday. FAO said
deteriorating U.S. crop prospects bolstered grain prices in late
(Reporting by Charles Abbott; Editing by Eric Walsh)