Ploughing through the meanders in Food Speculation

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Written by Mónica Vargas (ODG) and Olivier Chantry (CADTM), edited by Gustavo Duch (Revista Soberanía Alimentaria)

The figures of the Food and Agriculture Organization of the U.N. (FAO) show that in 2010, the number of persons suffering from hunger in the world was 925 million, and that this number is likely to increase in the future. They also record an upward trend in the prices of staple foods. This spring’s disturbances in the Maghreb are not unconnected with this. We must not forget that the popular revolts currently spreading through the Arab countries are linked to escalating food prices. The application of the Green Revolution in this region and the overall package of Neo-liberal measures has made this region, formerly a major agricultural producer, highly vulnerable to the dancing international prices of staple grains. Egypt is an extreme case in point, being the planet’s principal importer of wheat. When explaining the rise in food prices, people usually mention factors of different kinds.In this report we refer specifically to the role of – perhaps the most important – of the elements which influence the prices of staple foodstuffs. This factor is financial speculation.

We are in a context where every movement in the Chicago, London or Hanover exchanges, where futures contracts for cereals and oilseed grains are negotiated, has repercussions on foodstuffs. We point out that the maturing of capital in the financial sphere has taken place in parallel with the liberalization of agriculture – which explains the unprecedented repercussion which speculation has had in recent years on food prices. We also bring up elements which make it possible to understand how financial capital has penetrated the food market through speculation. As we consider the big winners in the field of food speculation, we also observe the role of Agribusiness. It is well known that Agribusiness increasingly controls the production chain and that a handful of firms dominate international food markets. But in addition, the report refers how they act directly in the financial markets, taking advantage of the privileged role which they have in the sphere of production. Likewise, we briefly consider a few of the social repercussions of keeping this system going.

On the report:

Authors: Mónica Vargas (ODG), Olivier Chantry (CADTM)
Edited by: Gustavo Duch (Food Sovereignty, Biodiversity and Cultures Magazine)
July 2011
31 pages. (pdf)
With the support of Grain and Mundubat


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