US: Global governments to blame for food crisis - Nestle

Global governments' biofuels policies have triggered the current food crisis and water shortage concerns, Nestle chairman Peter Brabeck-Letmathe has claimed.

Speaking at the annual meeting of the International Monetary Fund at the World Bank and at Georgetown University, Brabeck-Letmathe said governments endorsing biofuels production results in "massive withdrawals of freshwater".

"Efforts for sustainability and efforts against unsustainable trends and imbalances are the responsibility of everybody, and thus, as chairman of Nestle, I start by taking responsibility for myself and my company," said Brabeck-Letmathe.

"The argument for biofuels mainly started as one for using wood and plant leftovers, whilst the reality is that it is mainly food, like corn, that is used. [There is] a need for new approaches, often changes in paradigm and an urgent need, in particular to change public policy and improve transparency."

Brabeck-Letmathe added that the water crisis, predicted to take place in 2025, could occur much earlier because of the biofuels efforts that require heavy subsidies and other support measures in the US, Europe, China, India, South Africa and Colombia.

He also said that high prices increase the pressure to improve efficiency. "But when you start only after prices have gone up, you are too late. Improving efficiency and lowering the cost of goods sold is a constant effort."

In the last few years, Nestle achieved a reduction of overall freshwater withdrawals for factories and other activities from 4.5 to around 1.8 litres per US$ of sales.