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May 23, 2008
â€˜Two Americasâ€™ Deal with High Prices By Lynne Finnerty
Whether you followed the first half of the presidential nomination contest or not, you probably couldn't help hearing former Democratic candidate John Edwards talk about there being "two Americas." One America is struggling to get by, he said, while the other America can afford to buy whatever it wants.
It's true. There always have been haves and have-nots. Edwards and his politician pals are in the first category, while 12 percent of people in the United States live in poverty, according to Census data. Most of us fall somewhere in the middle.
There are people who still drive around unnecessarily, despite $4 a gallon gas. And then there are people who must choose which errands can be consolidated or even eliminated in order to cut their fuel costs.
The well-to-do may grumble about $4 lattes, but they still buy them. Because the U.S. dollar doesn't go as far as it used to, they have to pay more for Italian prosciutto and French brie. But most aren't making any big sacrifices.
On the other hand, those for whom just a few dollars make the difference in the color of their budget—red or black—are stretching food supplies or perhaps even visiting local food banks for the first time. Food banks around the country report that about 20 percent more people are visiting soup kitchens and food pantries for help this year compared to last.
Food costs are up 4.5 percent and energy costs are up a whopping 17 percent compared to a year ago. The American Farm Bureau Federation says those high energy costs are the biggest single factor contributing to the rising cost of food, because it takes energy to process, package and transport everything we eat.
You don't hear much about it, but other costs of living are up, too. Costs for housing and medical care are up 3 percent and 4.6 percent, respectively, compared to a year ago. Costs also have gone up for airfares, telephone service, school tuition and even tickets to sporting events.
Congress can't fix all these problems, but it can do something to help struggling Americans deal with higher food and fuel costs.
America's Second Harvest, the nation's largest network of food banks, is calling for Congress to pass the farm bill without further delay, to provide funding for federal nutrition programs that feed low-income Americans.
To help moderate gas prices, Congress can maintain the Renewable Fuel Standard that requires 9 billion gallons of the fuel supply to come from renewable fuels like ethanol. Despite what you might read in the newspapers, ethanol isn't a major factor driving the cost of food, but it is saving 50 cents off the cost of a gallon of gas.
Farmers "want to ensure that food is available and affordable to all global citizens," says AFBF President Bob Stallman. He says farmers follow the markets, and as prices go up they will produce more food.
Meanwhile, energy cost increases will continue to play a large role in the cost of nearly everything else we buy.
Lynne Finnerty is editor of FBNews, a publication of the American Farm Bureau Federation.