Speculators starve the poor

Submitted by Matthew on 23 September, 2010 - 3:57

Corn prices have gone up since 40% since July. The European wheat price has doubled since April, and the United Nations says that “global meat prices are already at the highest in 20 years”.

The UN's overall food price index is up 15% over the last year, and the odds must be that further price rises will work their way through from the rise in price of animal feed.

In Britain, these trends will squeeze living standards of the low-paid, and people losing their jobs. In large parts of the world, they mean desperate hunger, malnutrition, or even starvation, as happened during the previous world food price spike in 2007-8.

In Mozambique, a 30 per cent rise in bread prices has already triggered riots in which seven people had been killed and 288 wounded.

According to experts, very little of the price rises is due to sheer shortage of supply, or even to the diversion of cropland to biofuels. The biggest driving force is speculation.

Economist Joachim von Braun writes: “[In 2007-8] the setting of [food] prices at the main international commodity exchanges was significantly influenced by speculation that boosted prices...

“Food and financial markets have become intertwined — in short, the ‘financialisation’ of food trade. There are increasing indications that some financial capital is shifting from speculation on housing and complex derivatives to commodities, including food...”

To stop hungry people becoming the victims of rich speculators, we should fight for workers’ governments which will bring high finance under public ownership and democratic control, and regulate food distribution on the principle of social provision rather than profit.

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