by Marion Nestle
Jun 25 2010

FAO: Let’s start regulating food commodity futures. Yes!

The Food and Agriculture Organization (FAO), says FoodNavigator.com, is proposing “limited” regulation of food futures.

“Limited” doesn’t go nearly far enough.  Food futures need regulation, big time.

In a policy brief, FAO attributes the recent crisis over food prices to speculation on food futures.  Futures trading drove up the prices of food staples—corn, rice, and wheat—to record levels.

Commodity futures speculation is a form of betting that prices will go up or down. In the United States, commodity speculation is regulated, but apparently not nearly enough.

If, like me, you find this kind of trading incomprehensible, help is at hand.

Read Fred Kaufman’s extraordinary piece in the July 2010 Harper’s Magazine: “The food bubble: How Wall Street starved millions and got away with it.”

And applaud FAO for at least taking a tiny first step to getting speculation in food under control.

Comments

  • Bobby
  • June 25, 2010
  • 4:46 pm

Isn’t the original purpose of food futures to let argibusiness buyers and sellers lock in a transaction price so they can better plan aspects of their economic activity? OK, until wall street wizards (I support a special wizard tax), and the corn biofuel crowd got in the game. Fuel from food is the bigger crime, we need to get that subsidy-crazed nonsense out of the picture and things might get better.

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The price of food is going to continue to rise. It seems like healthy foods are starting to cost more and more. This may partially explain why the obesity rate continues to climb. It’s cheaper to eat fast food.

The US Congress at the moment is discussing whether and how to regulate food and other commodity markets more. Meanwhile, the European Commission has said it wants to take action. However, they have not published any proposals yet, and corporate lobbying by banks will certainly be trying to change their mind. The UK government as usual is on the banks side rather than normal people. You can take action to tell the UK to regulate speculation in food at http://www.wdm.org.uk/food-speculation

  • Cathy Richards
  • June 28, 2010
  • 6:38 pm

We spend a smaller percentage of our income on food than we ever have.

Of the dollars that we do spend on food, less and less is going to the farmer, more and more is going to distributors and processors.

I get very frustrated when people complain about the cost of food. We place a higher priority on monstor houses, monster cars, monster tvs, computers, cell phones, etc etc.

We get what we pay for. Yes governments and speculators and food processors need to take responsibility. As do we. We can vote with our wallets.

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