Biden Seeks to Boost US Food Production Amid Ukraine War

President Joe Biden on Wednesday outlined White House plans to help American farmers boost crop production to offset a reduction in Europe’s food exports caused by the Russian invasion of Ukraine.

The president, speaking from a farm in Kankakee, Illinois, noted that Russian President Vladimir Putin’s attack has pushed up world prices for a variety of staple foods, including wheat, corn, barley, oilseeds and cooking oil. Russia and Ukraine together supply more than 25% of world wheat exports and around 20% of barley exports.

“Right now, America is fighting on two fronts,” Biden told the crowd gathered at the farm. “At home, it’s inflation and rising prices. Abroad, it’s helping Ukrainians defend their democracy and feeding the hungry around the world because there are Russian atrocities.”

In a bid to quell food shortages, the Biden administration said it plans to increase the number of counties eligible for double crop insurance, which is when farmers plant a second crop on the same land in the same year.

“Double cropping carries real risks,” the president said. “If the weather conditions are not ideal, or at least good… then the timing is all lost.”

“But it is a risk that we must take,” Biden added. “That’s why my administration is looking at how to extend crop insurance coverage to provide financial security for farmers.”

The White House hopes those steps will help American farmers get through a record growing season in 2021, during which the value of American agricultural exports reached $177 billion.

(L-R) Gina and Jeff O’Connor, owners of O’Connor Farms, US President Joe Biden and US Secretary of Agriculture Tom Vilsack speak during their visit to O’Connor Farm in Kankakee, Illinois, on May 11, 2022.

Nicholas Kamm | AFP | fake images

The latest moves come a month after the United Nations warned that up to 1.7 billion people are “highly exposed” to the ripple effect of Russia’s war on the global food, energy and financial systems. The world body said the invasion threatens to exacerbate hunger in countries that are already undernourished.

Even in countries where food is not so scarce, prices are taking large chunks out of paychecks. In the US, the Labor Department said Wednesday morning that the prices Americans pay for groceries rose 1% in April and 10.8% in the past 12 months.

US Treasury Secretary Janet Yellen said in April that global food prices are “skyrocketing.”

The White House said it also plans to double its investment in domestic fertilizer production, from $250 million to $500 million, to lower costs for growers.

The effort will try to alleviate one of the main culprits of the increase in food prices: the global shortage of fertilizers.

“That’s why earlier this year the US Department of Agriculture announced that it would invest $250 million to produce fertilizer,” Biden said Wednesday, recalling an earlier conversation he had with Agriculture Secretary Tom Vilsack. .

“I turned to Tom and said, ‘Tom, double that up. Make it $500 million’. It is so desperately needed. We can’t take chances,” Biden said. “It’s critical to do this.”

Russia and Belarus, one of Moscow’s allies, provide about 40% of world potash exports. Farmers rely on the salt and potassium-rich compound in the world’s fertilizer industry to boost annual harvests.

In recent years, Russia has also exported 11% of the world’s urea and 48% of ammonium nitrate, two other key components of fertilizers, according to Morgan Stanley estimates.

“Fertilizer prices have more than doubled since last year, due in part to supply chain disruptions created and exacerbated by the Russian invasion of Ukraine,” the White House said in a fact sheet released Wednesday. in the morning.

“These actions will help develop new markets for American-grown food, supporting jobs in rural communities across the United States,” the administration added.

Subscribe to CNBC on YouTube.

Add Comment