On Wednesday I introduced Oxfam’s new campaign, GROW, which aims to fix the global food system in the face of a new food crisis. Today I point my finger towards one area of the food crisis that’s been under heavy fire over the last few months: betting on food prices.
Sometimes in life, things happen that we deem to be unfair, but we get on with it anyway. Sometimes, however, things transpire that are too unjust to accept. It is unlikely that any of you are part of a poor household in a developing country, where 50-90 per cent of income is spent on food. The point at which this becomes an injustice is when the cost of food is pushed up to an unaffordable level by the outrageously immoral hunger casino.
The hunger casino describes the profiting of banks from starvation, who bet on food prices in the unchecked and unbalanced system. The instability that this betting creates not only pushes up global food prices (wheat prices jumped up 70% from June to December last year despite stable wheat stocks) but also causes major price swings in staple foods like wheat, maize and soy. Because of this, the world’s poor go hungry as food is simply unaffordable; there is increased malnutrition as less dairy, meat and vegetables are consumed in order to afford the staple foods; there is an increased burden on women to earn more money through risky employment; less people are able to afford healthcare and education; and millions are forced deeper into poverty.
The United Nations has recognised this injustice and has just called for the regulation of financial speculation on food prices in a new report published at the end of last week. The new report by the UN’s Conference on Trade and Development says that due to this financial speculation, prices are no longer driven by supply and demand, and it aims to prevent the ‘price bubbles’ that are created from betting within the system.
It is not only the poorest people who are negatively affected by these high food prices. Contrary to what would be assumed, farmers in developing countries are also negatively affected. This is because the farmers have been forced to grow export crops such as coffee since the 1980s as a condition for receiving loans from the IMF. As a result of their land being used for export crops, developing countries are no longer able to be self-sufficient and are required to import staple foods like wheat, rice and maize.
What the markets lack is transparency. As Deborah Doane, director of the World Development Movement (WDM) said, ‘The lack of transparency in these markets bears worrying resemblance to the behaviour that led to the 2008 financial crash. Like any irrational asset bubble, the investors pile their money in for short-term profits, in spite of the consequences.’ The UN reports supports this call for transparency, which the WDM have been pushing in their food speculation campaign since April. The focus has been on Barclays Capital as the UK’s banking sector’s market leader and the UK’s biggest player in food commodity trading.
Despite campaigns and a UN report pressing for regulation, there is still more to be done. We need our government to support regulation before European legislation is implemented in Autumn. You can take action to stop this gambling on hunger by sending a message to the Treasury here and asking it to support the basic but strong and effective regulation to stop food speculation.