Friday, July 25, 2008

By MIKE KONZ
Hub Managing Editor

KEARNEY - To understand why food costs are so high, tear apart a Bulova wristwatch.
Disassembling a complex timepiece will show you why there are no simple solutions to the dramatic price increases at U.S. groceries and for food costs worldwide, said former U.S. Secretary of Agriculture Mike Johanns.

"If you really want to impact the cost of food, you have to impact many areas," said Johanns.
He is one of two candidates seeking the Republican nomination for U.S. Senate. Investment adviser Pat Flynn of Schuyler is the GOP's other senatorial candidate.

At a campaign stop Thursday in Kearney, Johanns said a combination of factors influences food costs.
Among them are energy costs, high global demand, the weakened U.S. dollar and energy.
"From field to table, that food has to be moved," Johanns said about transportation expenses.
The U.S. will export a record $1 billion in ag products in 2008.

"People like our products. They're high quality, and they're affordable," he said.

As U.S. secretary of agriculture, Johanns and his staff studied the factors that influence food costs daily.
Today, as a candidate for the Senate, he's fielding questions about how he could rein in costs.

"As a senator, I can sit on the Ag Committee and have a vote. It's Congress that writes the Farm Bill," Johanns said.

He said food costs normally increase by 2 percent to 21/2 percent annually, but they are forecast to rise by 4 percent to 5 percent in 2008.

Consumers might argue otherwise, but Johanns maintains that "the best buy for the American consumer still is food."

Johanns said a number of things could help reduce food costs.

Developing cellulosic ethanol would allow more corn to be used for food production, he said, while balancing the federal budget would strengthen the dollar and reduce foreign demand for U.S. ag products.
As Johanns campaigns for the Senate, lawmakers are debating how to reduce support for American farmers and increase funding for federal nutrition assistance programs.

About two-thirds of the $300 billion five-year farm bill moving through Congress is devoted to nutrition programs, including school lunches and food stamps for the poor.

Funneling more money to nutrition programs means less money for farm support, Johanns acknowledged, but he said getting money to farmers who need it and not to rich urban ag investors is the key. "Support needs to go to farmers who need it. It's a safety net."