Financial Speculators Behind Food Crisis
Article published: Monday, May 19th 2008
Rising food prices are causing misery around the world. According to the world bank the blame lies at the feet of speculators.
The unstoppable rise in food prices has provoked riots, demonstrations and conferences all over the world. Food reserves are at their lowest in the last quarter century and prices are rocketing. Rice has gone up 30 per cent in Bangladesh, Afghanis are paying 60 per cent more for wheat compared to last year while tortillas are up by 60 per cent in Mexico.
The crisis in food staples of rice, wheat, maize and soya is affecting 850 million people, according to the UN Food and Agriculture Organisation. The gravity of the unforeseen and unprecedented rise in prices in the world food supply has caused demonstrations in Senegal, Morocco, Yemen, Haiti, Egypt, the former Soviet Union and even Italy. Burkina Faso called a general strike. In the US and UK, supermarkets have started to ration rice. But the problem is not a lack of food. In fact global food production is up 2.6 per cent.
As Jean Ziegler, UN Special Rapporteur on the Right to Food, said, world agriculture could feed the population twice over, at its current levels of productivity. This crisis is man-made. It is in fact financial market speculators who are causing the crisis, combined with biofuels, droughts and increased demand, according to World Bank president Robert Zoellick. There is a lot of money at stake.
Economist Luis de Sebastian believes multinationals such as Cargill and Dreyfuss, with a huge capacity for storage and transport, are key to the speculation fueling the massive hike in basic food stuff prices. As if this werent enough, the same grains used for food can now be processed for fuel. A new law went into effect in Britain this month, which requires 2.5 per cent of all petrol and diesel to come from biofuels. The use of maize for ethanol production has increased by 100 per cent in the EU and is predicted to go up 500 per cent in the next 15 years.
The UN warned a year ago that the rush to switch from oil to biofuels could lead to serious food shortages. Now the World Bank president Robert Zoellick has confi rmed it: demand for ethanol and other biofuels is a signifi cant contributor to soaring food prices around the world, he said in Washington on 10 April, brandishing a loaf of bread.
With the EU considering a 10 per cent biofuel minimum in all fossil fuels by 2010, the problem looks set to worsen. Europe tinkers with fuel targets and market traders scoop record prices while British people grumble at the price of bread. But food makes up 60 per cent of the world poors weekly budget, compared to 10 per cent in Europe. A Yemeni demonstrator had a direct question for the Western media : We cant afford to eat, he said. What do you expect us to do?
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