During the 1990s and early 2000s, aggressive lobbying by investment banks and hedge funds led to weaker regulations over food speculation. Banks like Barclays Capital created special investment products to help financial companies make money from food prices, just like they do from share prices. As a result, billions of pounds have been poured into food commodity markets, pushing up prices and resulting in increased hunger and poverty.
Combining risky financial gambling with a basic human need is a recipe for global hunger. Excessive speculation on food prices needs to be curbed and we need your help to convince the UK government to back European proposals for regulation.
Email the Treasury now asking for all futures contracts to be cleared through regulated exchanges and set strict limits on the amount that bankers can bet on food prices. Act now!
Dear Mark Hoban,
Excessive speculation on food by financial institutions has pushed up food prices and left millions across the world facing hunger and malnutrition.
In 2007 and 2008 the IMF food price index rose by over 80 percent, pushing the total number of people in hunger to over one billion and increasing the number living in poverty by over 100 million. The dangers of high food prices have not gone away - food prices have been rising steadily over the last year and remain higher than seen during the food crisis of 2008.
Commodity futures markets need better regulation to ensure stable and affordable food prices for the benefit of consumers, producers and businesses in the UK and globally. This is especially important for the world's poorest countries, where high food prices can lead to increased hunger, deeper poverty and social and political unrest. Calls for better regulation of commodity futures markets have been supported by a range of experts from the head of the UN Food and Agriculture Organisation and the UN special rapporteur on the right to food, to the CEO of Starbucks and the chief executive of Unilever.
I would like the Treasury to support European proposals that:
- Ensure transparency on commodity futures markets, by requiring all deals on food derivatives take place on regulated public exchanges
- Introduce position limits to restrict the number of food futures contracts that can be held by financial institutions at any given time, to prevent excessive speculation from distorting food prices.
