MODERATOR: Good afternoon and welcome to you all. We are glad you have taken time out to join us today on this very special day in Italy, and we thank you for taking time out of a busy schedule, and we know we are competing for time and scheduling so we intend to keep this engagement reasonably short but with ample opportunity for you to ask questions of our distinguished speakers today.

I am Gaddi Vasquez, the United States Ambassador to the United Nations Agencies in Rome, and it is my distinct pleasure to introduce the United States Agriculture Secretary Ed Schafer, who is leading the United States delegation to the UN Food Security Summit here at FAO over the next three days. We are looking forward to initiating in this week a global conversation on how to best address both the immediate and long-term effects of the current food crisis. I am also honored to introduce Henrietta Fore who is the administration of the U.S. Agency for International Development (USAID) and is also the director of U.S. Foreign Assistance.

Secretary Schafer and Administrator Fore work on the front lines of the global food crisis and are leaders in the U.S. government's active efforts to mitigate the impact of the cost of rising food on the world's poor.

Secretary Schafer, it's my pleasure to introduce you to this audience. Welcome to the podium.

SEC. ED SCHAFER: Thank you for joining us. As head of the U.S. delegation to this important conference, I will stress that the world's leaders have a responsibility to allow markets to provide food efficiently, without obstructing access to it, or limiting safe technologies to produce it.

The United States is implementing an integrated three-pronged strategy to combat rising global food prices. First, the President has committed an immediate and expanded humanitarian response that targets the most critical needs globally and supports those individuals who are most vulnerable to rising food prices.

Second, we support urgent efforts to address the underlying causes of the food crisis in developing countries that have the potential to become major producers in their regions. Longstanding issues of improving agriculture productivity, alleviating market bottlenecks, and promoting market-based principles remain and therefore require immediate attention.

Third, we ask all countries to allow the free flow of food and the safe technologies that produce that food.

To achieve a more efficient global market, the United States is also working toward a successful conclusion of the World Trade Organizations Doha Development Round. Doha would reduce and eliminate tariffs and other barriers as well as market-distorting subsidies for agriculture goods.

Now is the time to lift trade-restrictive policy measures such as export restrictions. While they are designed to increase short-term food security in the countries imposing the restrictions, these policies often have the opposite effect and only make the situation worse. They take food off the global market, drive up prices, and discourage farmers to respond to market signals.

Finally, many concerns have been expressed about the impact of biofuels on food availability. Increased biofuels production is but one of many contributors to increase food prices. Other factors contributing to food price increase include rising energy costs, poor harvests in major grain producing countries, and greater use of export restrictions.

I look forward to hearing other perspectives on these important issues, so that together we can determine how best to work through the United Nations structure to increase the availability of food for all.

That's my prepared comments, and I'd be glad to take any questions that you might have. I believe - Here?

REPORTER: Yes, Secretary Schafer, Ariel David from the Associated Press. You've been on record as opposing increased agricultural subsidies in the U.S., and yet U.S. Congress has recently approved increased subsidies. We've been told that this conference will not address the issue of food subsidies. Do you think it's even possible to try to solve the food price crisis without addressing the subsidies problem, subsidies issue?

SEC. SCHAFER: Well, the subsidies issues I think are dealt with appropriately at the [World Trade Organization] Doha Development Round. We've made a commitment to try to see that round complete and would hope to get it accomplished this year. The effort for the United States subsidies of course is in relation to market access, and as we look at the market access and availability opening up, then we will deal with our current farm legislation with the United States Congress to confirm the agreements that we made on subsidies during that Doha Round.

REPORTER: I'm David Loyn from the BBC. I wonder if I could ask you how helpful you think Mr. Mugabe's appearance here is, President Mugabe, and will you be meeting him?

REPORTER: You know, I think we are pleased that many nations are here supporting this important food conference. I will not be meeting with the President, and we welcome the discussion, the ideas, and the ability to come to some conclusions about how to deal with this food price issue. So I'm just looking forward to the conversations, and as I mentioned I will not be meeting with the President. Thank you.

REPORTER: Is it that biofuels is just one of many contributing factors? Could you have any figures for that for them? How many percent is that, is it contributes to the --

SEC. SCHAFER: Yes. We at the United States Department of Agriculture have plotted the long-term trends of price, yield, availability and consumption; and as we've looked at those long-term trends we are anticipating this year an over 40 percent increase in food price inflation globally, 43 percent approximately. Of that, we can identify 2 to 3 percent of that price increase that is driven by biofuels. The majority of course is energy, and the second largest piece, or about equal piece, is the increase in consumption around the world which is using up the production stocks. So we see, the figures that we are looking at show about a 3 percent, or a little under, effort on biofuels to actually drive up the inflation rate of food costs globally.

REPORTER: Thank you. I'm Timos Vermis (ph), a journalist from the nation in Norway. Referring to what you said about safe technology, I would like to ask you, sir, do you regard GMOs as a safe technology that should be mandatory to introduce in all countries? Thank you?

SEC. SCHAFER: Well, certainly we think that GMOs are safe. We've been using them for 10 years in the United States. And they have proven effectiveness in increasing yields, in lowering the use of fertilizer, and providing better water and soil management, and also increasing taste and appearance. So those are all good things.

And certainly we have proven the safety environmentally and from a human standpoint food safety issue that GMOs are fine to use.

Many, many countries are using these products to enhance their yields and increase food production in an effort to feed the people of this world. And some countries still have some concern. And we're hoping -- as we move through this and we look at science based efforts for our trading partners to make decisions on what products to use, grow and consume -- we hope that science-based effort will confirm that the GMOs are safe to use, as we have been doing so in the United States and many countries around the world for well over 10 years.

REPORTER: Yes. Have you any close to opinions on the final statement of the summit? And what do you think of the international prices of food? Do you think they are going to at least be stopped or going back again? And I want to know if your country is with increasing prices of food or with decreasing the prices?

SEC. SCHAFER: As far as the statement of the organization here when we get done, that's a moving document at this point in time. It's being developed; we haven't seen even a final draft copy, so I won't make any comments on that.

As far as food prices go, we recognize that biofuels is a portion of the food price inflation; but really the driving factor here is energy and increased consumption. As consumption increases, we are seeing a lowering of the food stocks available.

Now I mentioned one of the factors in my comments that's been driving the food price availability strongly has been weather-related issues in grain-developing countries. I'm very pleased to see the latest reports that in coarse grains, in wheat, in rice and in soybeans, we're seeing big increases in production this year. So if we see those increases come through to harvest time, as that availability of the product gets on the marketplace we expect the prices then to start to stabilize.

REPORTER: Stephanie Holmes from BBC News Website. You said that you think the biofuels only accounts for 2 to 3 percent of the price increases, but there are lots of estimates from respected think tanks that say it might account for up to a third. Would the U.S. consider a moratorium on biofuels? And also, they are not considered incredibly efficient; corn-based ethanol is not considered efficient as a means of making energy.

SEC. SCHAFER: Well, you know, it's one of the great things about the gathering of many countries at a place like this is to be able to reconcile numbers, to look at differences of opinion, to be able to come to some conclusion about what real numbers are or are not. As we have looked at the numbers, I think it's very clear that biofuels produce about 3 percent or a little under of the global inflation rate of food.

And beyond that, they produce many, many positive aspects. By biofuels, we are reducing the use of the high cost of oil today. It's been estimated that we have, through biofuel production, reduced a million barrels a day of oil and oil record high prices. That makes a lot of difference to a lot of people. Environmentally, they are better. There are things in gasoline, in the aromatics and things, that aren't as good as biofuels; they are better issue. And whether the energy created is more or less, is again a subject of debate. Many studies show that it is not [less energy created], that it is an efficient producer of energy. That as we've increased the fermenting process and increased the yields per acre of corn for instance as a feedstock, we have seen the cost of that energy go down and the efficiency go up.

So I am hoping that we can get together on some of these vast differences of opinion and come to some conclusions as to what's real versus what's emotional or socially driven or governmental driven. But you know, let's look at the numbers and see what we have.

REPORTER: Can I ask you, what's the subsidy the U.S. provides for its corn biofuel each year?

SEC. SCHAFER: We have currently a subsidy of [51] cents per gallon. That is going down now to [45] cents per gallon.

REPORTER: But as a total on an annual basis, how many millions of dollars?

SEC. SCHAFER: Oh, I don't know that number.

REPORTER: ... is that right?

SEC. SCHAFER: I don't know the number. Does anybody? We can get the number. We'll get the number for you. Thank you.

She's asking the total.

REPORTER: Okay. Figorini (ph). Agropress (sp).

SEC. SCHAFER: Hi.

REPORTER: Do you share any optimism about the possibility of concluding to go to end of WTO round, Doha Round?

SEC. SCHAFER: Do I share the optimism? You know, I do. I'm an optimistic type guy. But as we have talked to our negotiators, as we've made some progress on some of the difficult issues - there are still many difficult issues on the table - but I think that my sense is from the people I visited with that there's an effort to see a completion of the Doha Round this year. And hopefully we'll continue to be on that track. The different models are getting solved, we're moving through, and hopefully we can get it narrowed down enough to get to a ministerial so that some major decision can be made. But I am optimistic that we'll see this process through and that we can see a completion of the Doha Round this year.

REPORTER: Hi. Phil Stewart from Reuters. I just have a question: with the presidents of Iran and also Zimbabwe here, and it looks like the President of Venezuela will be here as well, is there a chance that this could overshadow the event a bit? I mean, this will be the first trip by the president of Iran to Western Europe as president, and obviously this is the first big trip by Zimbabwe's president since the recent election.

I'm just wondering, do you think there's a risk this could overshadow the event? And I know you won't be meeting with the president of Zimbabwe, but would someone from the delegation be looking for? And also this applies to Iran: Is this an opportunity for diplomacy?

SEC. SCHAFER: First of all, if their presence here overshadows the work of this esteemed body, I guess that will be up to the people in this room, including you. So that will make the difference there what the news is. So we ask that you keep the focus on the work that's being done by the body. Nobody from the U.S. delegation will be meeting with the countries you mentioned. We are glad they are here. We appreciate the opportunity for dialog, but it is our position that we will not meet with them.

REPORTER: Ari Rajvi from the Arabic Service of the BBC. There are some countries that if you remove all the obstacles that we are having now, that will still suffer. I am thinking particularly of countries in the Middle East where they have additional obstacles. So if you take for instance the Sudan, which has great potential for food production, they, because of the political situations, they will still suffer.

SEC. SCHAFER: I agree, and I think that we have to do everything we can to remove the barriers. You know, food is kind of an international language, and it's one that all of the leadership nations in the world feel strongly about providing food for people, not only on a humanitarian basis, but also on a development basis. So we in the United States feel strongly, as does your country and many others that we're in developing countries helping them create infrastructure, helping them increase their production, helping them do those kinds of things.

The policies -- the politics of a government and what they will and will not do -- I do not think are in this body. I mean, our effort here is to work on food and food prices. The interaction between governments and government leadership I think belongs in another arena.

REPORTER: Yes, but surely you want to sort out the basic obstacles first so you can feed the people, because if you sort out all the prices in the world and they can't get the food, they are still hungry.

SEC. SCHAFER: They are hungry, and I'm pleased, in Sudan for instance that you mentioned, the United States has been active in Sudan with relief for food efforts, etcetera. Sure, the government gets in the way sometimes. But our effort is a focus on food and getting food to the people who need it who are hungry and can take advantage of the benevolent efforts of countries that do have it.

REPORTER: Thank you. Javier Blas from the Financial Times in London. Secretary Schafer, what is the view of the U.S. government review on investment by countries like China, but also South Korea and other countries in particular in Africa to secure food supplies, that they are not going to go to the international market but the production in those African countries is going to go back to the countries who are making the investment.

And a second question if I may: What is your view of this crisis, not for humanitarian or social point of view but for now, security and peace point of view? Are you concerned that food prices could trigger more food riots and also instability on young democracies? Thank you.

SEC. SCHAFER: Yes. As far as countries making investment in land and production facilities in other countries, we're just kind of learning about that. It's starting to happen.

My personal concern on that is, is it an effort to bypass the international markets and the free trade agreements that hopefully will come from strong multilateral discussions about food availability and supply in the world?

Like I said, my personal concern would be, is this an effort to bypass it? Is it an effort to get around trade restriction barriers, quotas that might be there, and build a relationship of ownership of production in another country to bypass the geopolitical issues?

Certainly the United States of America believes in free markets. We believe investments in other countries including our own, and those are important issues that can be sorted out. The big issue is, the method that's going to be used to get that production back and forth, in and out of the country.

Your second question was?

REPORTER: Food security.

SEC. SCHAFER: Food security, yes.

REPORTER: -- to global security?

SEC. SCHAFER: You know, we are here today. I think all of us are here today because of the concern of hungry people. And when we see hungry people, we've seen unrest, social unrest in many countries. And that pressure hopefully pushes governments in a manner to open their borders, to eliminate barriers, to get food in place when people are hungry. That is a huge concern, and if we can't figure out ways to increase our yields, to eliminate the barriers, to move food around where it's needed most, then we have a concern that these unrests will continue.

REPORTER: Julian Borger from The Guardian. If you were presented with convincing evidence that the impact of biofuels was higher than 3 percent, that it was significant, would the U.S. be prepared to look again at its policies on its subsidies for corn ethanol?

SEC. SCHAFER: Well, you know, this is a hypothetical, but we're here to look at all the information on the table. And we're hoping that what we can conclude are at least the framework of an agreement of what the real causative factors of food price increases are. Our numbers right now show that the major cost of food increase is energy. Another major cost is consumption increases, which is a good thing: economies are doing well; consumption is increasing all over the world. That's putting pressure on supplies. And certainly the trade barriers that are in place are causing these problems as well.

A factor is biomass energy, and we think it's a smaller part of the energy. And should that turn out to be a different situation, then the United States is going to have to develop a public policy that is appropriate in the global marketplace. We can't say what that is right now because we believe our numbers are correct.

REPORTER: Hello, sir.

SEC. SCHAFER: Yes.

REPORTER: Alessio Vinci with CNN. Clearly world hunger is an old problem, and we're trying to come up I guess with new solutions with summits like this one. Would you say that so far the people that will be meeting in the plenary session tomorrow and the next few days have failed basically to deal with the problem? It's a major failure that 15 years later or 10 years later we are still here talking about the same problems. Would you say that it is a failure?

And what would you say to those people who say that these gatherings, while important of course, and you are mentioning exchanging opinions concerning numbers, but they need to see some strong action that goes beyond the billions of dollars that have been spent or will be spent in the coming years to help solve the problem, that clearly have been spent in the past but we're still here talking about it.

SEC. SCHAFER: Well, I'm not going to make a judgment on failure or not. You know, we have many examples of brilliant people who have gone down one direction or another, and they have been but stepping stones to get to the positive success. And certainly this is an effort again to come together. Market conditions have changed, weather conditions have changed, consumption patterns have changed, and we need to put all this on the table and move forward.

So I think importantly our work is from here out, and that's the way the United States delegation is going to be looking at it.

REPORTER: Thank you. Robin Pomeroy from Reuters. You mentioned trade barriers. You say that's possibly the third item after energy price increase and the consumption increase. But surely the trade bans, the export bans from countries like India, which have pushed up prices, are very recent things, and a far longer term distortion to trade comes from countries like the U.S. over-subsidizing their agriculture.

Shouldn't the U.S. be sending a message here saying, "We're sorry, we've been wrong for many years on trade policy? And in fact we are responsible for a lot of this price increase?"

SEC. SCHAFER: Well, that would be an interesting statement but one you're not going to hear. The reality is, the United States has been one of the very few countries in this world that have increased yields enough to take care of increasing consumption. And our efforts on trade policies certainly have been very productive.

For instance, we were talking about biofuels and corn supplies. The exports from the United States of corn are more than they've ever been. We are increasing our exports, providing more food, and we are proud as a nation to have provided over half of all food aid in the world. And we hope to continue those efforts.

I don't think that our trade policies are more restrictive or different than others. And we are all in an effort to reduce those subsidies away from market price distorting issues into other areas.

The United States is at the table. We are willing to talk about those in relation as I mentioned to market access as well as a similar commitment on subsidies from the EU and other nations as well who have subsidized reasonably for an abundant and safe food supply out there for their people.

MODERATOR: Let me just interrupt to inject here that this question and one more and we'll conclude. Thank you.

REPORTER: But are you willing to finance agricultural investment at the levels that are being asked for here? Jacques Diouf, the director general of FAO, in interviews today has been talking about a ten-fold increase in investment in agriculture and transport infrastructure in Africa over the next 20 or 30 years. Clearly that could come to your table. Is that something the United States is prepared to put its hand in its pocket for?

SEC. SCHAFER: You know, the United States has always been there. We've always exported food to people who are in need. We've always exported our expertise, our precision farming practices and our ability to produce the best quality food and at yields that are impressive. And we want to share that with the rest of the world.

The President of the United States is committed to $5 billion of aid over the next two years, and we think that's an important step forward. We're going to do our part, and as we come together as to what the needs are I can assure you that the United States is going to be a strong player, as it always has been.

REPORTER: Hello. I'm Sarah Delaney with the Washington Post, and I'm just wondering: You haven't mentioned speculation as one of the reasons for the prices to go up, which a lot of analysts do. And I'm wondering if there's anything to be done about it, especially since a lot of people are making a lot of money off of this food crisis, including cereal companies from the United States. I was wondering if there's anything to do about that.

SEC. SCHAFER: You know, the speculation is an issue, and it kind of goes back to the causes of the food price increases. You know, the major one of course is energy; the second one is consumption, or they are about equal.

We kind of have a bunch of things; you know a pocketful of them if you will, or a purse-full of them that are contributing factors.

The speculation issue is one that has several investigations pending. I personally have been both on the Chicago Commodities Trade Floor as well as Kansas City. We've talked to the directors about this issue. We also must understand that there is a relationship as crop prices have become much more expensive; for the risk that farmers are taking are huge. As those risks go up, that farmers and ranchers take to produce our food, they are hedging out there their future sales of products. A lot of that speculative money is going in to finance the hedging portion of this issue, which gives a safety net and a comfort for our farmers and ranchers to make the risk of their investment.

But certainly there is speculation. That speculation is one of the issues, and it's being investigated in several different fronts. I have no comment beyond that.

Thank you, all. We appreciate - thank you.

MODERATOR: Thank you ladies and gentlemen. The panel will be available during the course of the conference should you require additional information. Thank you.