Speculation in food prices: a hunger casino

20 August 2010

Speculation in food prices: a hunger casino

Ewout Irrgangby Ewout Irrgang • A recent World Bank report reveals that speculation was a major cause of the huge increase in food prices during 2007 and 2008. While banks such as Goldman Sachs and the Deutsche Bank raked in huge profits, hundreds of millions of people in developing countries, and most of all children, suffered hunger as a result of rising prices.

Now there is evidence that speculators are once again playing a role in sharply increasing prices for agricultural products, as in the case of cocoa and of grain. Have we then really not learned anything? How long will we continue to tolerate a situation in which a full wallet for a few means an empty belly for millions?

Jean Ziegler, special rapporteur for food rights for the UN, called the food crisis at the time 'silent mass murder', saying that it was entirely attributable to human activity. Human activity could also put an end to the hunger casino. Re-regulation of agriculture is therefore vital.

Speculators must be banished from the food market. This could be achieved, for example, by a ban on speculative financial instruments in food commodities where there is no over-riding interest, or through limits on the amounts that speculators can gamble on food prices. Also worthy of consideration are the introduction of a tax to put a brake on speculative financial operations, and the regulation of the futures market.

The Dutch government must put this subject on the international agenda, beginning at the autumn meeting of the IMF and the World Bank. And in our own country they must meet with banks, pension funds and other major investors and call their behaviour to account.

A version of this article was first published in Dutch in the daily agricultural newspaper Agrarisch Dagblad

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