Interestingly, the head of Nestlé lashed out at U.S. ethanol policy yesterday at the Council on Foreign Relations as reported in The Independent:
Today, 35 per cent of US corn goes into biofuel,” the Nestlé chairman told an audience at the Council on Foreign Relations (CFR) in New York yesterday. “From an environmental point of view this is a nonsense, but more so when we are running out of food in the rest of the world.
“It is absolutely immoral to push hundreds of millions of people into hunger and into extreme poverty because of such a policy, so I think – I insist – no food for fuel.”
Corn prices almost doubled in the year to February, though they have fallen from their peak in the past few weeks. Anger at rising food prices contributed to protests across the Middle East, and rising commodities costs were among the factors pushing UK inflation to 4.4 per cent in February, according to figures out yesterday.
US exports account for about 60 per cent of the world’s corn supply. Demand has surged as more people join the middle classes in emerging economies such as China and India, not just because these new consumers demand more food made from corn, but also because demand for meat has increased and livestock farmers need to buy more feed.
Nestlé, the company behind Shredded Wheat, Nescafé and Aero chocolate bars, has been lobbying European regulators and governments around the world against setting high targets for biofuel use, even though many countries see the production of ethanol as a means of meeting obligations to cut carbon fuel emissions.
The lobbying has fallen on deaf ears in the US, however. Ethanol production from corn is heavily subsidised, with output running at more than 13.5 billion gallons annually. Policies to promote its production are “absurd”, Mr Brabeck-Letmathe claimed yesterday, and meeting a mooted global target of having 20 per cent of fuel demand with biofuels would involve increasing production by one third.
“What is the result? Prices are going up. It’s not very complicated,” he said. “This question is now the number one priority for the G20 meeting in Nice, and the main thing we are going to do is fight against speculation. We are concentrating on the irrelevant.”
Speaking to farmers earlier this month, the Obama administration’s agriculture secretary said he found arguments from the like of Nestlé “irritating”. Mr Vilsack said: “The folks advancing this argument either do not understand or do not accept the notion that our farmers are as productive and smart and innovative and creative enough to meet the needs of food and fuel and feed and export.” . . . .
There are a number of recent biofuel projects at various stages in Kenya. Obviously this is controversial, but without the subsidies so far as I know these projects involve non-food crops, UPDATE: Here is a story this week in AFP about opposition to plans to grow jatropha on 50,000 hectares near Malindi on the Kenyan coast for the European ethanol market.