Speculation on Basic Food Prices is Immoral and Has to be Regulated

Copyright (c) 2011 Alison Withers

It should not be surprising given the current uncertain state of global economic recovery following the crash of 2008 that there has already been a week of rioting over food prices and unemployment in Algeria and Tunisia at the start of the New Year (2011).

Although the US Congress did pass legislation last year, the Dodd-Frank financial reform law, it has not been implemented yet, so large investors are still able to speculate at will in commodity markets - even at the cost of their lives.

The U.N. Food and Agriculture Organization's index of world food prices rose 32% in the second half of 2010, well above the peak prices of June 2008 that sparked a wave of similar riots as the poorest found it harder than ever to feed their families. in his view including the development of genetic modification and introducing agricultural economies of scale.

The FAO is not seeing any respite and is forecasting that prices of most commodities will not abate and the international community must remain vigilant against further supply shocks in 2011.32%, the highest it has been for a year.

It would seem that, at last, ther might be some moves among the G20 as a whole to try to control the rampant price speculation. developers have been producing a range of low-chem agricultural solutions that could help raise productivity but allow farmers large and small to protect their land and farm sustainably with a new range of yield enhancers,.

Sarkozy is thought to want to use his time at the G20 helm to start reforms of the monetary system and to push for greater transparency in commodity market trading and pricing, and for tougher regulation of commodity derivatives trade. The European Union has plans to launch measures to regulate commodity exchanges and curb speculation and the US Commodity Futures Trading Commission is also expected to consider a plan to curb speculation at its meeting on January 13.

The French President, Nicholas Sarkozy, who has just taken over as the head of the G20, is expected to discuss the situation with the US President, Barack Obama at a meeting soon.

All this is all very well, if it does result in action that will protect food prices for some of the world's poorest but earlier in January Oxford University Professor of Economics Prof Paul Collier called the response to the food crisis "dysfunctional".

Although last year's extreme weather events were also partly to blame, the responses by governments, such as Russia, in banning wheat exports until after the 2011 harvest, and of others, like China, that are buying up large tracts of land in places like Africa, he describes as "blatant neo-colonialism" and "a recipe for political confrontation".

He argues that there is plenty of scope for increasing supply, particularly by raising productivity in Africa but to do that, he suggests, will need the acceleration of crop innovation - including in his view the development of genetic modification and introducing agricultural economies of scale.

However, there are other less extreme solutions that could be promoted alongside Prof Collier's suggestions.

For some years now, biopesticides developers have been working on a range of low-chem agricultural solutions that could help raise productivity but allow farmers large and small to protect their land and farm sustainably with a new range of yield enhancers, biopesticides and biofungicides.

There are few other ways for the world's most disadvantaged people to express their distress when food commodity price speculation continues on basics like wheat, sugar, rice and oil.

That alone will not be enough. Small developing world farmers will also need the financial support and training to be able to use these new products and the infrastructure to get the healthier food that will result to market without being bullied by global food corporations to sell them at prices so low that they can barely pay their production costs still less earn a liveable income.


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The UN says food prices at the end of 2010 had risen above the previous highs of 2008. Ali Withers argues that Governments across the world should act urgently to regulate commodity price speculation and work together to approve the new generation of low-chem agricultural products from the biopesticides developers.