Peru Fights High Prices With Local Crop

[Judi Lynn]

Peru Fights High Prices With Local Crop
Tuesday March 18, 9:18 am ET
By Leslie Josephs, Associated Press Writer
Peruvians Adopt Potato Bread Amid Rising Cost of Wheat Flour


LIMA, Peru (AP) -- Peru's military has begun eating bread made from potatoes, a native crop, to combat a rise in food prices partly fueled by the cost of loaves made from imported wheat, Defense Minister Antero Flores-Araoz said.

Wheat isn't produced here, it's imported, and every day it costs more," Flores-Araoz told reporters at Lima army base, surrounded by potato baguettes, braided potato loaves and mini-potato croissants.

Wheat prices have risen 35 percent in the last year to US$1.27 (euro0.81) per kilogram (US$0.58; euro0.37 a pound), fueling a 40 percent increase in bread prices, according to the National Statistics Institute.

Those gains play a small role in driving the nation's 4.8 percent annual inflation, but Peru has seized on the rising price of wheat bread to promote potatoes, creating jobs in the impoverished highlands where the tubers are grown.

A government-run food company now produces about 12,000 loaves a day made from one-third boiled and mashed potatoes and two-thirds wheat flour. Peru's prisons and many public schools have also served potato bread since January.

More:
http://biz.yahoo.com/ap/080318/peru_combatting_inflation.html?.v=1