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UN Warned of Major New Food Crisis at Emergency Meeting in Rome
Environmental disasters and speculative investors are to blame for volatile food commodities markets, says UN's special adviser
The UN's Food and Agriculture Organisation (FAO) meeting in Rome today was called last month after a heatwave and wildfires in Russia led to a draconian wheat export ban and food riots broke out in Mozambique, killing 13 people. But UN experts heard that pension and hedge funds, sovereign wealth funds and large banks who speculate on commodity markets may also be responsible for inflation in food prices being seen across all continents.
July's wildfires in Russia have led to a draconian wheat ban, pushing up prices. (Photograph: Maxim Shipenkov/EPA) In a new paper released this week, Olivier De Schutter, the UN's special rapporteur on food, says that the increases in price and the volatility of food commodities can only be explained by the emergence of a "speculative bubble" which he traces back to the early noughties.
"[Beginning in ]2001, food commodities derivatives markets, and commodities indexes began to see an influx of non-traditional investors," De Schutter writes. "The reason for this was because other markets dried up one by one: the dotcoms vanished at the end of 2001, the stock market soon after, and the US housing market in August 2007. As each bubble burst, these large institutional investors moved into other markets, each traditionally considered more stable than the last. Strong similarities can be seen between the price behaviour of food commodities and other refuge values, such as gold."
He continues: "A significant contributory cause of the price spike [has been] speculation by institutional investors who did not have any expertise or interest in agricultural commodities, and who invested in commodities index funds or in order to hedge speculative bets."
A near doubling of many staple food prices in 2007 and 2008 led to riots in more than 30 countries and an estimated 150 million extra people going hungry. While some commodity prices have since reduced, the majority are well over 50% higher than pre-2007 figures – and are now rising quickly upwards again.
"Once again we find ourselves in a situation where basic food commodities are undergoing supply shocks. World wheat futures and spot prices climbed steadily until the beginning of August 2010, when Russia – faced with massive wildfires that destroyed its wheat harvest – imposed an export ban on that commodity. In addition, other markets such as sugar and oilseeds are witnessing significant price increases," said De Schutter, who spoke today at The UK Food Group's conference in London.
Gregory Barrow of the UN World Food Program said: "What we have seen over the past few weeks is a period of volatility driven partly by the announcement from Russia of an export ban on grain food until next year, and this has driven prices up. They have fallen back again, but this has had an impact."
Sergei Sukhov, from Russia's agriculture ministry, told the Associated Press during a break in the meeting in Rome that the market for grains "should be stable and predictable for all participants." He said no efforts should be spared "to the effect that the production of food be sufficient."
"The emergency UN meeting in Rome is a clear warning sign that we could be on the brink of another food price crisis unless swift action is taken. Already, nearly a billion people go to bed hungry every night – another food crisis would be catastrophic for millions of poor people," said Alex Wijeratna, ActionAid's hunger campaigner.
An ActionAid report released last week revealed that hunger could be costing poor nations $450bn a year – more than 10 times the amount needed to halve hunger by 2015 and meet Millennium Development Goal One.
Food prices are rising around 15% a year in India and Nepal, and similarly in Latin America and China. US maize prices this week broke through the $5-a-bushel level for the first time since September 2008, fuelled by reports from US farmers of disappointing yields in the early stages of their harvests. The surge in the corn price also pushed up European wheat prices to a two-year high of €238 a tonne.
Elsewhere, the threat of civil unrest led Egypt this week to announce measures to increase food self-sufficiency to 70%. Partly as a result of food price rises, many middle eastern and other water-scarce countries have begun to invest heavily in farmland in Africa and elsewhere to guarantee supplies.
Although the FAO has rejected the notion of a food crisis on the scale of 2007-2008, it this week warned of greater volatility in food commodities markets in the years ahead.
At the meeting in London today, De Schutter said the only long term way to resolve the crisis would be to shift to "agro-ecological" ways of growing food. This farming, which does not depend on fossil fuels, pesticides or heavy machinery has been shown to protect soils and use less water.
"A growing number of experts are calling for a major shift in food security policies, and support the development of agroecology approaches, which have shown very promising results where implemented," he said.
Green MP Caroline Lucas called for tighter regulation of the food trade. "Food has become a commodity to be traded. The only thing that matters under the current system is profit. Trading in food must not be treated as simply another form of business as usual: for many people it is a matter of life and death. We must insist on the complete removal of agriculture from the remit of the World Trade Organisation," she said.
Comments
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36 Comments so far
Show AllIt's not a food production crisis, it's a food distribution crisis. It's the same old, same old. This generation of corporations and financiers are morally and creatively bankrupt. The only thing they can come up with to feed their own insatiable appetites is to threaten the subsitance of others.
So round up the speculators, their not invisable, and drag them up before the World Court to answer to Crimes against Humanity charges..
What the hell is the World Court for anyway? Every week it's some speculatior of some Dirivitive B/S from these traitors(not a misspelling!) in the news! Just round them up and deal with them!
>^^<
I can't do it all myself!
Too many people to feed. Too many stupid, uncaring, greedy people to enrich. All populations bloom and crash. That includes people.
Too many people to feed is correct!
When I was born there were only 2 billion people on the planet. Now that's more than tripled in only five/six decades! Human beings are the only species that breeds unchecked like yeast in a vat. And when conflicts between humans and other earthlings arise, it's the other earthlings who are "culled," not the species that's out of control! So maybe climate disasters and wars due to food shortages are the triggers that will "trim the herd" or "harvest" the surplus global human population. As environmentalists are always reminding us, human beings are not separate from Nature . . . .
C'mon read the article that's not the problem! It's these dammed commidities traiters! they've had a couple of months to lockup food after hearing about the fires in Russia and now their equeezing the poor dumb breeders for prices they can't pay!
>^^<
I wonder if Nuermburg is availible, and the gallows are they still up?
It' time for trials!
I can(as well as I'm sure the vast majority of CD readers and reasonable people with half a brain) appreciate your frustration with the continuing population bomb and its impact on our world. Perhaps at this stage some dismal Malthusian scenarios of "trimming the herd" are invitable. However, just to throw out there, back in the 90's I came across a book, "Reproductive Rights and Wrongs: The Global Politics of Population Control" by Betsy Hartmann, in which she lays out research to suggest, partly on the experience of Kerala, India for example, that the only effective strategies for bringing the birth rate down, a more desirable effect than "trimming the herd," was to empower women directly through access to health care, including birth control and limited access to abortion, and to education.
Ok Malthus! you want to start shooting every second one? or just sneak around at night poisoning wells?
>^^<
Back in the 50's the USDA did a hell of a job dealing with this issue. What happened?
The cold war ended, Like the MIC buildup and the Space Program the USDA food programs were just a compitition with the USSR as to who could feed their client states the best. Our competion is gone, unless the Chinese start feeding people. So theres no more reason for us to bother.
You see how well the free market handles it!
>^^<
the population more than doubled!
(still growing exponentially)
loss of arable land
(see the monsanto model)
industrial waste devasting drinkable water
animal (food source) extinction rate skyrocketing
collapsing bee hives (it's about a lot more than honey, honey)
untold damage to oceans, coral reefs (see bp)
unwavering belief in salvation through fiat dollars.
Corporate greed pure and simple combined with a bad case of humans. Also we do have a few folks around who "think' that inspection and regulation are bad for us.
Good enough sum-up.
>^^<
I had a dream the other night where legislators actually wrote the bills, instead of lobbyists, before being rubber-stamped into law.
I hope to continue that dream by taking a double-dose of happy pills, before I hit the old fart-sack tonight.
I’m hoping to channel my dream to the point where we, as a people, actually elect legislators who are capable of writing their own legislation. A bonus would be if all could actually read and understand the bills before them,
Then I woke up and broke into a sweaty, cold-turkey trance.
Greed.
Narcissism.
Voting Machines.
The Corporate Media.
Television.
Rich assholes.
Fundamentalism.
Rubber chickens.
Hate.
Sound bites.
Goddamn nightmares.
It's a good thing that they, also, are not real.
"It's the same old, same old." Very accurate and true words indeed. Surely by now an ever increasing number of people will see through this creatively designed imitation reality and rather than focusing on the unobtainable carrot dangling in front of us, simply turn around and focus on the who, why and how the hidden power entity sitting right behind us is pulling the strings. Please don't waste time blaming or fighting anything or anyone. Seek the truthfull knowledge of what "it" really is and pass "it" along. This is merely "food" for thought which may very well keep the rest of us from facing a similar destiny as our disadvantaged have since the beginning of our social origins. "It" still remains in hidden control, therefore "civilization" only exists within the true defined meaning of the word only.
Give a man a hedge fund
and you teach him to gamble.
Teach a man to gamble,
and the WHOLE world starves!
The 21st century version of " Give a man a fish.."
CORRECT!!! and for todays prize we have a years worth of CYMBALTA!! (It'll still bother you but just not as much!)
>^^<
I think the correct term is "Jesus WEPT"
When will we establish some form of institution with some form of control protecting the world's neediest from the duplicity, greed and short-sightedness of hedge fund managers, corporate czars? This isn't "communism - faux FOX News, Glenn Beck, etc... Rather it's prudential oversight.
It's not our Country.. I thought we were tring to get out of the Business of being the worlds police force!
Although I'm sure most if not all the key speculators have offices on Wall. St We could just hand them over to the UN to press charges.
>^^<
The food crisis is a silent tsunami which probably can only be understood by watching it fall apart; as in the US financial system, although that is momentarily holding together. The rest of the doomsday scenarios have also proved false, so far. But the 2010 food crisis seems different because of climate change. Abnormal weather is ruining crops across the planet which could bring down the global financial system.
The only thing holding the US Financial System togther is Our Tax money, and a lot of ignorance!
>^^<
The entire world is in crises. Period. Thanks mostly to corporatism and capitalism and the never ending mantra of growth.
Food prices should not be allowed to increase through speculation.
Caroline Lucas and the British Greens are right about this as is the UN official investigating this. Food shouldn't in the least be so absolutely and completely subject to the kind of speculation by speculators which wreaked so much havoc on so many doing so much to make maximum profit at the expense of all others. This needs to cease. That's the reason that we can now say those who voted Green in the last British general election voted just as they should and didn't fall for that hot air about not letting the "Tories" in. Hell the new Tories, fake Labor was already in. What the hell is the difference? Just as in the USA what's the difference between the Republicans and the new Republicans, the fake Democrats? Here the mantra is keep the GOP out. Please! What's the big damn difference with some noteworthy exceptions on both sides of the Atlantic. Yes, some Labor backbenchers in the British House of Commons and some local council counterparts are worth saving, but that is the exception and not the rule. Oh, and the new party leader for Labor looks as though he won't be worth a damn either. Damn Labor sure knows how to throw away its opportunities, so much like Democrats on this side of the Atlantic.
AD
As big AG forces people world wide off the land and into squatter camps the skills necessary to produce local food crops disappear, as do the languages and cultural traditions that grew alongside them.
Zero Population Growth - - please.
Trylon
Lock up the POPE! and his gang of no Birth Control Pediphiles!
>^^<
Sell off the stuff in the Vatican to pay for food.
Now this is a good thought.
But the invisible hand of the market is the most efficient mechanism for the distribution of goods and services.
If folks can't afford to buy food, they are either stupid, lazy or both.
Now, pass the Soylent Green please - mmm mmm good.
SOYLENT GOOD THE PLANET and ok for you. Don't forget Wednesday is Soylent Green Day!
>^^<
A lot of you make the wrong conclusions from this article, but first, one thing the article did not address. Without spikes in food prices, there is little incentive for farmers the world over to increase production and if production is not increased and supplies worldwide fall to dangerously low levels, then watch the pandemonium invoked when food prices spike 10 fold or more. If the time comes when everyone is hoarding food for themselves and farmers are eating their seed for next year's planting, then we could see a situation not unlike the devastation of a nuclear war. In agriculture, the "invisible hand" is a highly useful tool. Changes to commodity futures legislation has enabled vast sums of money to move these markets very quickly. It is also true that there are times when the money moves the other way, and people have an opportunity to lock in food prices at a very attractive level. A few decades ago, America had a different type of agricultural policy. Back then we had a farmer-owned grain reserve where the government paid the farmer to store some extra grain. If prices went up, the government stopped paying the farmer to store and grain would naturally find its way into the market. This program had some benefits with its reserve capacity. One aspect was rather bad, however. We used to ship some of this grain to starving nations. Unfortunately this was the wrong thing to do. When this free grain arrived in what was often a drought-ravaged country, local farmers who had severely reduced yields, suddenly had their meager harvests reduced from high value to low value. These devastated farmers then had no money to put in a crop the next year. We now know that supplying money to buy food locally is the best first step.
>A lot of you make the wrong conclusions from this article, but first, one thing the article did not address. Without spikes in food prices, there is little incentive for farmers the world over to increase production <
WRONG! lose 50 points your livestock is stolen by indians.
Farmers never see a dime of these increases! it's allready tied up by spaculators during the summer, when we all heard about the Russian fires and possible shortages!
>^^<
Food production in our world of ever increasing population is a disaster waiting to happen. The current plan we have is as good as it gets if one is focused on avoiding mass starvation in the NEAR future. Most of your thoughts are completely unhelpful. Instead work toward world birth control and family planning. As a farmer, I can now sell corn for nearly $5/ bushel, compared to less than $3 earlier this summer. The incentive is there to grow more. Fertilizer prices are also rising. That's their incentive to produce more fertilizer. This system works beautifully (for now anyway) to feed the vast majority of an overpopulated world.
I got my seeds, including 100lbs of organic wheat berries, 50 lbs of barley, and 50 lbs. of rice, all ready to go. Let the show begin!
In the 1970s and 1980s, farmers were paid to grow surpluses.
This surplus food was stored in salt caves, molded into ugly orange cheese squares (fed to kids and seniors) and sent to developing countries under PL 480 (Food for Peace).
In the beginning, food aid was provided to MCH clinics and to school kids - much like WIC and school lunch programs.
Over time, food aid became monetized; first as food for work and later as food that could be sold in local markets as long as proceeds were used for "development"
Most development occurred in high official offices where proceed from monetization bought mercedes (the wa benzi)and weapons to keep the people from demanding their share.
Government officials sold tons of free and subsidized food
In many developing countries the local farmer cannot sell their produce in any markets. "Food aid" is cheaper.
Farmers have no choice but to sell their farms to Chinese entrepreneurs and western multinationals (esp Monsanto). 90% in many countries are now unemployed.
The Wabenzi develop a taste for western foods. Coca Cola replaces local drinks. Heinekin replaces local beer.
It is now impossible to purchase good food, since farmers have fled their farms. Western foods lead to obesity, heart disease and diabetes. The underdeveloped medical system can not provide adequate coverage - except to the Wabenzi.
Rather than measles vacinations for the kids, we now have angioplasty for the wabenzi.
The local economy is now owned by the Chinese and in some cases by Europeans and Amerikans.
The local entrepreneur has no title to land, cannot monetize their land to get credit to compete, and even if they could get credit, bribery and corruption would render them less competetive.
Haiti is a good example of the shit hitting the fan. When disaster struck, 65% of Hatians were small farmers. Since it was the end of the "hungry" season, little food remained in the market. Disaster struck and there were no reserves.
The call went out from city relatives to country relatives
Seed corn was sent to feed starving relatives in the city - who in good times sent money out from the city to the farms.
Haiti was left with no seed just before planting season. The geniuses in Washington, Geneva and Paris flooded Haiti with food aid. Little to no thought was given to providing seed to keep 65% of the country working - working to feed the other 35% who were in dire straits.
A large part of the urban population "sells" farm produce and operates local restaurants (food stalls). They cannot compete with food aid and go out of business -
Other sectors, used clothing and local clothing merchants cannot compete with free clothing from the donor world.
This all could have been prevented - or was it political?
..........
All the pie in the sky green ideas are conceptually great.
Unfortunately the world system is beyond the control of progressive ideas. As with global warming, little will be done until too late.
With a shift of climate bands, we will see hundreds of millions die in China, Northern India, Pakistan, Central America and even around the Mediteranean. Even more will perish in Africa.
Talk is great - excellent ideas - it is too late.
With a minimum of effort and a bit of planning it is easy for anyone with access to a small plot of earth and water to grow plenty of food for a family. However, laziness and lack of foresight should take care of the population bomb
How about UG98. a wheat rust originatin in Uganda in 1998 which destroys wheat crops and is spreading.
Nematodes are the most destructive agricultural soil pest and is spreading because there is no defense other that fallowing the land.
All species except humans are strengthened by the law of natural selection. Modern medicine insures than even those with flawed genes live to propagate thus weakening the human gene pool and eventually leading to the extinction of man.