contribution by Stuart Rodger
On the 13th of November, George Osborne will make a decision which could, quite literally, determine whether millions of people around the world starve to death, or not.
On that date, EU Finance Ministers will meet to discuss the proposed regulation of the food commodities markets, or so-called ‘food speculation’.
So far, the European Parliament have watered down the proposals put forward by the European Commission, with the World Development Movement and Oxfam complaining that traders will still be able to ‘corner’ the market in food commodities, meaning prices will still rise, and people will still go hungry.
There used to be strict regulation on the food commodities markets, but after the de-regulation mania of the 90s and early 00s, traders could buy and sell as many contracts as they liked. Upon the collapse of the property-bubble, investors rushed to invest in agricultural commodities. As demand increased, the price rose, and the incentive to invest rose – thereby creating a vicious cycle.
We feel the effects here in the UK, but the effects are felt far more severely by people in the developing world – who spend between 50 and 90% of their income on food. The results were food riots across the world, and the number of chronically malnourished people rising by 75 million in 2007, and 40 million in 2008.
Even by the banks’ own admission, food speculation has driven up prices. A Goldman Sachs research paper of 2008 stated that ‘without question increased fund flow into commodities has boosted prices’. The pressure for profit-making is so great that only strict government regulation will rein in this practice: banks cannot be left to regulate themselves.
British banks are some of the worst offenders. Barclays alone have made over £500 million from food commodity trading.
The World Development have been leading an excellent campaign on this issue and teamed up with the stars of BBC 3’s The Revolution Will Be Televised for this spoof video:
Given that Osborne is the leading architect of British government’s attempt to punish the massed ranks of ordinary British people for an economic crisis caused by the recklessness of Big Finance, and persistently resists calls to implement a Robin Hood Tax, I wouldn’t bet on it.
So for the sake of the global hungry, we must force him to make the right decision. Signing, sending, and sharing the World Development Movement’s template email is the very least we can do. You can find it here.