In The Great Hunger Lottery, we have compiled extensive evidence establishing the role of food commodity derivatives in destabilising and driving up food prices around the world. This in turn, has led to food prices becoming unaffordable for low-income families around the world, particularly in developing countries highly reliant on food imports.
Nowhere was this more clearly seen than during the astonishing surge in staple food prices over the course of 2007-2008, when millions went hungry and food riots swept major cities around the world. The Great Hunger Lottery shows how this alarming episode was fueled by the behaviour of financial speculators, and describes the terrible immediate impacts on vulnerable families around the world, as well as the long term damage to the fight against global poverty.
In the report we describe how the current situation came to pass, the risks of another speculation induced food crisis, and what specifically can be done by policymakers here in the UK as well as in the US and EU to tackle the problem.
In this week’s Mail on Sunday it was revealed that a hedge fund bought over 250,000 tonnes of cocoa beans, a move designed to make millions for the hedge fund but losses for people in the UK who are partial to a Twix or farmers in developing countries who are finding it impossible to plan what to grow when the prices are rising and falling like a yo-yo.
Banks and hedge funds ‘buy’ cocoa and other food all the time but they don’t normally request delivery and stash them in warehouses in Liverpool and London. Usually, they buy and sell without ever seeing a single bean or grain, they only see money. Prices rise and fall as a mirror image of speculative hot money flooding in and hot footing it out.
Food speculation is one of the ways bankers’ greed harms the poor and puts us all at risk, and the huge investment bank Goldman Sachs is one of the biggest culprits. Our financial regulator, the Financial Services Authority or FSA, is charged with keeping the financial system stable and safe. We should look to them to rein in the irresponsible food gambling of Goldman Sachs and banks like them.
We want the government to give the regulator the powers it needs to stop this. For one week, starting Monday 19 July, we need the phones ringing off the hook at the FSA, demanding action against Goldman Sachs.
Printer friendly page
Email this page to a friend
