Food Exec Angers Corn Group

Comments of Nestle president have NCGA pointing out where ethanol benefits society.

Published on: Mar 28, 2011

Last week, comments made by the chairman of Nestle about the use of corn for biofuels production were "not only wrong but dangerous," according to a statement released by the National Corn Growers Association.

Bart Schott, president, says: "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, ludricous 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."

Schott notes that this company's profits alone represent more than half the entire farm value of the 2010 U.S. corn crop.

Schott's reaction comes after comments made by Nestle Chairman Peter Brabeck-Letmathe during the March 22 meeting of the Council on Foreign Relations. The NCGA president challenged the Nestle chairman to check his facts noting that Southern Africa and India have surplus corn this year, and are exporting large quantities. "[Brabeck-Letmathe] 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 notes 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. The general consensus is that commodity market speculation, higher energy prices and other causes were more to blame. He pointed to some global examples:

  • 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 says.