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Speculators and Traders Gambling on Food

June 2008

There’s a scary betting game going on. Here’s how it goes: Speculators bet that food prices go up (and drive them up in the process). If they’re right, they reap a profit. If they’re right, the price of food for families skyrockets.

Part of the “perfect storm” contributing to the current global food crisis – the one which I find most egregious and has been least mentioned in mainstream U.S. media is – the effect of speculation in the commodities market on the price of food. Speculative investors, reeling from the credit crisis and declining stock market, have jumped on the sharp rise in food and energy prices to recover losses by betting on future price increases. A recent report published by our colleagues at GRAIN, “Making a Killing From Hunger” provides detailed information on how speculative finance capital and agribusinesses manipulate food prices and rake in huge profits while the needy go hungry.

In response to this repugnant speculation, a recent hearing of the Senate Homeland Security and Governmental Affairs Committee was held. Its chairman, Senator Joe Lieberman, said; “this unbridled growth raises justifiable concerns that speculative demand – divorced from market realities – is driving up food and energy price inflation and causing a lot of human suffering.”. Lieberman said that he would put his staff to work to draft legislation to close a loophole allowing large investors to evade commodity position limits in the commodity futures markets.

The Via Campesina along with other social movements has asked for public support for just this type of national legislative effort to defend the human right to food and curtail the immoral, if not criminal, actions of finance capital and agribusiness corporations. Tomorrow, the UN’s Food and Agriculture Organization (the FAO) meets to create a plan to stem the global food crisis. Please stay tuned for more opportunities to learn about policy changes in the U.S. and around the world so essential stop the cartels, speculators and monopolies that control our agriculture and food industry.

An important action you can take right now is to sign this petition entitled No More Fake Solutions to the Food Crisis. Thank you.

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