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'Do the Math' Recurring Theme in Global Food and Energy Conversation
Illinois Ag Connection - 08/03/2022

American Agri-Women (AAW) hosted the Global Food and Energy Supply Conversation to respond to member interest in rising input and food costs. Two recurring themes of the event were the need for people to "do the math" and for countries to normalize trade.

AAW President Heather Hampton+Knodle, moderated the event and opened by citing comments from a recent congressional hearing where 74% of the estimated increase in poverty and 63% of the rise in hunger are due to high fertilizer and fuel costs. She shared articles from the U.S. and around the globe featuring food and energy disruptions, protests, and added costs due to regulations.

Guest presenters on the panel were Dr. Roger Cryan, chief economist with the American Farm Bureau Federation; Rose Barbuto, senior policy advisor to the Farm Journal Foundation; and Dr. Dean Foreman, chief economist with the American Petroleum Institute. Panelists interpreted charts and graphs illustrating global food and energy flow throughout the conversation.

When asked how regulations factor into food and fuel costs, Cryan said, "As far as the cost of environmental and social governance issues, they are hard to measure. At the moment, it's a first-world privilege to afford to do that in the market. When you're buying things based on ESG, I think it's important to do the math to understand what you're getting and whether it's worth it."

Foreman cited several reasons for rising energy costs, including a moratorium on drilling in public lands, revoked pipeline permits, and limited investment in energy infrastructure since 2019, even while demand remains high and inventories are at historic lows. He said, "We need more normalization on the trade and tariff front, and we must solve the near-term need to move products from the gulf up the east coast."

He used the 30% steel tariff as one example that increases energy production and delivery costs. Foreman said, "To be able to meet the obligations of natural gas our country has made to Europe, that means building multi-billion dollar projects that require a lot of steel."

The importance of trade was underscored again as Barbuto compared the steep increase in U.S. tax dollars for food aid to an almost flat investment in research to improve agricultural production methods. In 2022 alone, the U.S. has spent $14 Billion on short-term humanitarian food aid compared to $1.8 Billion for agriculture development assistance.

Barbuto said, "We've done the math and know investing in ag research here and in developing countries works. We've seen countries move from aid to trade in less than a generation after receiving consistent investments in farming methods for smallholder farmers."

She cited examples in Guatemala, Vietnam, and Nigeria, where on-the-ground efforts to help smallholder farmers be self-sufficient have led those countries from purchasing less than $200 Million in 1990 to more than $5.5 billion in U.S. agricultural products in the last few years.

Foreman summed up the mood of the conversation, "It's a global problem. We need solutions here at home. We have the resources. We have the capability. We need to operationalize it."

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