Financialisation and world food prices: What’s CARICOM doing?

An article I recently received from Patricia Khan (How global investors make money out of hunger, by Horand Knaup, Michaela Schiessl and Anne Seith, published by Speigel Online) is an excellent treatment of the effects of financialisation of world food commodity markets on driving up food prices. It marshals evidence from several authoritative sources to show that the recent spikes in food prices have little to do with the reasons one often sees in the media, like population growth, demand from China and India, biofuels, climate change, etc, but rather with the entry of the banks and other financial entities to the futures markets following deregulation in 1999 and relaxation of banks’ equity requirements in 2004.

I was particularly struck by the statistic from FAO that 98 per cent of futures contracts do not lead to actual deliveries; that the bulk of the contracts are sold by the banks, etc, prior to maturation, and by the United Nations Conference on Trade and Development (UNCTAD) finding that futures prices are driving up present prices, rather than vice versa as it ought to be. I am also struck by the emergence of ‘land grabbing’ in resource-rich African countries by investors exporting food to the rich countries, and by the way in which commercial industrial agriculture has several deleterious effects, and that the technical consensus is that food security for the world’s hungry should be based on sustainable agricultural practices carried out by small farmers – an issue which has been addressed by several writers.

While this is probably familiar to many readers, I am concerned about whether it has percolated into the thinking of our key decision-makers and the general regional public. Earlier this year we were informed that a Caribbean Community (CARICOM) common agricultural policy has been adopted, but there are several questions that arise:

1. What is the status of the CARICOM common agricultural policy? Is it receiving the urgency it deserves from decision-makers? Are stakeholders satisfied that the implementation arrangements and mechanisms will result in its timely and effective implementation?
2. How has the recent (2011) spike in global food commodity prices impacted the cost and availability of food in CARICOM countries? How many people in CARICOM have been pushed below the poverty line, or the hunger line (if there is such a concept) by the rise in food prices since the beginning of 2011?
3. What steps have CARICOM governments taken to support internationally the calls for, (a) regulation of global commodity markets and, (b) a transactions tax, to curb speculation?
4. What steps have CARICOM governments taken, or are taking, or should be taking, to prevent ‘land-grabbing’ in countries like Guyana and Belize, to ensure that the food needs of the people of the region are the first call on the land resources of the region?
5. What steps have CARICOM governments taken, or are taking, or should be taking, to provide land, credit, research and development and other incentives to small farmers to carry out sustainable agricultural practices for domestic food production in the region?
6. And finally, who is championing these issues in the Caribbean media? Is it getting the attention it deserves and is the regional public sufficiently seized of its importance? And if the answer is no, what can be done to remedy this situation?
More at http://www.spiegel.de/international/world/0,1518,783654,00.html

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* Norman Girvan is a professorial research fellow at the Graduate Institute of International Relations at the University of the West Indies in St. Augustine, Trinidad and Tobago.
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