Remarks made this week by the chairman of Nestle about the use of corn for biofuels production were not only wrong but dangerous, the president of the National Corn Growers Association said. At a time of economic struggle for millions of Americans, any proposal that will kill jobs, damage the environment and raise energy prices needs to be opposed vehemently.
“It is scandalous, ludicrous and highly irresponsible for the chairman of a global conglomerate that tripled its profits last year to talk about higher corn prices forcing millions into starvation,” said NCGA President Bart Schott. “Perhaps if Nestle is so concerned about food prices, its board will consider putting more of their $35.7 billion in 2010 profits back into poor communities. Just their profits alone represent more than half the entire farm value of the 2010 U.S. corn crop.”
Schott was reacting to comments by Nestle Chairman Peter Brabeck-Letmathe at a March 22 meeting of the Council on Foreign Relations.
Schott also challenged Brabeck-Letmathe to take the time to study facts and figures before making ridiculous comments about an industry that he clearly knows little about, nor bothered to study up on. “Mr. Brabeck-Letmathe took a swipe at the comments of the U.S. Secretary of Agriculture, Tom Vilsack, when it is Mr. Brabeck-Letmathe’s numbers that are erroneous. The facts support the messages of Mr. Vilsack with respect to biofuels,” said Schott. “Brabeck-Letmathe grossly distorted the amount of water used for biofuels production, and seems unaware that Southern Africa and India are surplus corn this year and exporting large quantities. He also took a cheap shot at ethanol being the cause of unrest in the Middle East, which completely belittles the root causes of that unrest – a thirst for freedom, a desire for economic reform and years of political and economic tyranny.”
Schott further questioned Brabeck-Letmathe’s comments about the pace of agricultural production. “In the United States we are seeing a much higher corn yield than elsewhere, a higher yield that efficiently uses each acre of land in a very sustainable way, because of advances in technology from the seed itself to the GPS that helps steer our combines,” Schott said. “Many of these technologies are not allowed in other parts of the world, despite their safety and economic or environmental efficiency. This needs to stop. Farmers around the globe should have access to the same technology that has made our cornfields the best in the world.”
Using corn for ethanol production has helped keep fuel prices from getting even higher, while supporting tens of thousands of jobs and decreasing greenhouse gas emissions, Schott noted. And when it comes to food prices, numerous reports since the 2008 price spike have shown that ethanol demand was not a major factor. The general consensus is that commodity market speculation, higher energy prices and other causes were more to blame.
A few examples from around the world:
- The United Kingdom’s Department for Environment, Food and Rural Affairs issued a report in March 2010 that discounted biofuels impact, stating “Available evidence suggests that biofuels had a relatively small contribution to the 2008 spike in agricultural commodity prices. Studies which have found a large biofuel impact across agricultural commodities have often considered too few variables, relied on statistical associations or made unrealistic or inconsistent assumptions.”
- In a July 2010 report, the World Bank stated that “the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors may have been partly responsible for the 2007-08 spike.”
“It’s time for the food processing industry, which has been using higher grain prices to justify its price increases, to explain to hungry families why they have to eat less so those who can afford company stock can make more money,” Schott said. “Profiteering off world hunger needs to end, and that is what is truly immoral. If there is a ‘food versus fuel’ crisis it exists because families are being forced to decide which of the two they can afford – gasoline from Big Oil or food from companies like these. That’s something I challenge Nestle to step forward and help alleviate. They certainly can afford it.”