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Food lobby pressures New Jersey governor to request ethanol mandate waiver

June 27, 2008

The Food Before Food coalition called on Governor Jon Corzine to request a waiver from the ethanol mandate and the Renewable Fuel Standard.

Meanwhile, CNN.com reported on studies sponsored by Kraft Foods and a related coalition of food producers, Balanced Food and Fuel. Both studies projected that a 50 percent reduction in the Renewable Fuel Standard would drop corn prices by $2 per bushel. However a chart on the balancedfoodandfuel.org website projects the corn price at only $3.40 per bushel in 2010, dropping to $3.15 per bushel in 2016.

Meanwile, USDA under secretary Thomas Dorr pledged at the Corn Utilization and Technology Conference to give farmers more support in the food vs fuel debate. Dorr said the Department would highlight that ethanol has caused only 0.25% of the 4.5% increase in food prices and was holding down gas prices.

The EPA comments period in the Renewable Fuel Standard waiver consideration process ended this week. Just before the end of the comments period, the Balanced Food and Fuel coalition (American Meat Institute, National Chicken Council, National Cattlemen’s Beef Association, National Meat Association, National Milk Producers Federation, National Pork Producers Council, National Turkey Federation and United Egg Producers) submitted a paper commissioned from FarmEcon, and Kraft Foods submitted a paper it commissioned from Keith Collins (former chief economist of the USDA), supporting the call for the waiver by highlighting a high impact on corn prices and negligible impact on fuel prices from corn ethanol. The foodbeforefuel.org website funded by the Grocery Manufacturers Association has a link to both studies and is promoting them via press releases.

Groups supporting the campaign
American Bakers Association, American Beverage Association, American Conservative Union, American Frozen Food Institute, American Meat Institute, Competitive Enterprise Institute, Earth Policy Institute, Environmental Working Group, Food For All, Grocery Manufacturers Association, International Dairy Foods Association, International Foodservice Distributors Association, MANA (A National Latina Organization), National Cattlemen’s Beef Association, National Chicken Council, National Council of Chain Restaurants, National Restaurant Association, National Retail Federation, National Turkey Federation, Pilgrim’s Pride Corporation, Popeye’s Chicken & Biscuits, Snack Food Association, The Hispanic Institute, Tortilla Industry Association, and Women Impacting Public Policy.

“This campaign is nothing more than a ‘red herring’, distracting the American public away from the true cause of food price increases,” said Brooke Coleman of the New Fuels Alliance. “It’s unfortunate that the Grocery Manufacturers Association and others have decided to perpetuate the myth that ethanol is to blame for higher food prices, while many of their members spike their retail food prices to profit from the crisis.”

“While biofuels do play a small role in rising food costs – about 3% according to USDA – the biggest contributors to escalating food prices are growing fuel costs, weather events like droughts, rampant speculation in the commodities market and increased demand for food products from developing nations like China and India. Even though the development of biofuels is in its infancy, we’re already seeing major benefits in our pocketbooks – biofuels are keeping gasoline prices down by 15-25%, according to Merrill Lynch – and our environment, and any effort to overturn the Renewable Fuel Standard will only make us more dependent on other countries for our energy.”

“In an ironic twist, a well-respected agricultural economist at Purdue University recently concluded that ethanol is not even the central driver for corn price increases,” added Coleman, pointing to a study showing that of the $4 per bushel increase in the price of corn, ethanol accounted for 25% of the increase while oil prices caused 75% of the increase. “GMA and its supporters are clearly not interested in having an honest debate about food prices.”

GMA Campaign background

Sen. Chuck Grassley (R-IA) posted documents from the Grocery Manufacturers Association anti-ethanol story on his website. The documents are the original request for proposal from the lobbying group, and the response by Glover Park. The Grocers hired Glover and Dutko Worldwide for $300,000 to create a public perception of a link between biofuels and rising food prices.

Documents obtained by and published in Roll Call identify that the Grocery Manufacturers Association has launched a massive, global PR campaign, pledging to assemble a “global center-left coalition” including hiring “trusted third-party experts” to link ethanol mandates to global hunger, food industry job losses and inflation.

“GMA has concluded that rising food prices … create a window to change perceptions about the benefits of bio-fuels and the mandate,” said the organization’s Request for Proposals sent to PR firms.

The firm eventually hired by the GMA, Glover Park, said that it would employ an “urgent and remedy-based messaging strategy” to convince lawmakers that food prices is a “Now” issue that is fast reaching crisis proportions for American consumers,” and said it would produce an “online, viral campaign” to link ethanol and food prices.

The GMA issued the RFP in March to, quoting from the RFP, “build a groundswell in support of freezing or reversing some provisions of the 2007 Energy Bill and for the elimination/reform of ethanol subsidies and import restrictions.” Subsequently the Governors of two states and 24 Republican Senators, including presumptive Republican presidential nominee Sen. John McCain, called for a freeze. The GMA is a backer of McCain’s campaign, and the two Senators who received the most financial support from the GMA’s political action committee in this election cycle are among the 24 who signed the call for a biofuels review.

The GMA hired Andy Wright, former chief of staff to Rep. Brad Sherman (D-Calif.), to oversee a grassroots program to discredit biofuels.

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    Written by Jim Lane · Filed Under Policy, Producer News 

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