Investing In Starvation

[Hootad Binky]

Investment newsletters are now featuring headlines like "How You Can Profit from the Global Food Crisis." The recommended investments include agribusiness stocks and exchange-traded funds (ETFs) that speculate in agricultural commodities. These investments will no doubt do very well in the global food crisis; but before you put your money down, you may want to explore whether you will be helping to alleviate the problem or actually contributing to it.

Do you really want to "invest" in starvation? In an April 23 article in the German news source Spiegel Online called "Deadly Greed: The Role of Speculators in the Global Food Crisis," Balzli and Horning note, "Many investors . . . are simply oblivious to the fact that by investing in the global casino, they could be gambling away the daily food supply of the world's poorest people."

Jean Ziegler, UN Special Rapporteur on the Right to Food, has called the exploding food crisis "a silent mass murder." In an interview in the French daily Liberation on April 14, he said, "We are heading for a very long period of rioting, conflicts [and] waves of uncontrollable regional instability marked by the despair of the most vulnerable populations." He blamed globalization and multinationals for "monopolizing the riches of the earth," and said that a mass uprising of starving people against their persecutors is "just as possible as the French Revolution was."

Speculating in Hunger: Are Investors Contributing to the Global Food Crisis?

These are just average investors whose mutual funds have been pulled out of the crumbling real estate market and aren't interested in ever-lower-interest government bonds.

(Why can't I change this font!) Fact is, there are sufficient grains for everyone on earth. Consumption of wheat is only up 1% over last year, and here was a record grain harvest last year.

There was a record global grain harvest last year. At 2.1 billion tons, it was up by 5 per cent on the previous year. The problem is that a diminishing proportion of it is being turned into food. This year less than half the total grown – 1.01 billion tons – will find its way on to people's plates, according to the United Nations Food and Agriculture Organisation.

http://www.mauritiustimes.com/020508gopee.htm

[buriramboy]

If the average American could just eat a normal sized plate of food, i'm sure the global food crisis could be averted.

[Texpat]

^They eat it all because American grandmothers and mothers for generations have reminded American kids of the starving, poor, homeless, cow-piss drinking, African kids who would someday take over their suburban pool-laden, community hall, happy, content lifestyles if they didn't eat their broccoli.

Seems it's worked.

[Hootad Binky]

There's no shortage of food, but there are "World Food Futures," with large blocks of money controlling and artificially increasing current and future food prices; situation expected to get much worse even though speculation has now been identified as the primary cause.

New rules preventing the "commodification" food and (temporary) debt-forgiveness would give developing nations breathing room and thus end this crisis. Instead agribusiness is insisting on GMO crops that require large amounts of fertilizer to increase yield (which isn't the problem), and of course no changes to financial regulations that might affect the pocketbooks of super-rich fund managers.

As the food crisis was unfolding, seed, chemical and grain companies such as ADM, Cargill and Monsanto were posting record profits of 60% to 80% while in many developing countries, the poor were spending up to 75% of their income on food.

...structural adjustment policies (SAPs), are economic policies that countries must agree to follow to qualify for new World Bank and IMF loans and to help them make repayments on older debts. SAPs encourage countries to focus on the production and export of primary commodities to earn foreign exchange.

Lifting import restrictions has resulted in the dumping of subsidised grain from the US and Europe, and farmers in poor countries have steadily been driven out of business. There are 52 million undernourished people in Latin America, which represents 10% of the region's population. Yet, paradoxically, the region is the biggest exporter of food on the planet.

...Commodity futures trading had been banned for much of the post-Independence period. The process of liberalisation accelerated in 1998 with the adoption of a major reform package spurred by a World Bank-funded grant. The reform included the introduction of futures trading in edible oils, oilseeds and their cakes. These initiatives have paved the way for the speculative price increases that have forced the government to import as much as 3.9 million tonnes of wheat and ease imports of other commodities. Chandrasekhar called for a ban on forward trading in essential commodities.

This problem of speculation is not confined to India. According to Citigroup analysts, an extra $US70 billion ($A74.6 billion) has been invested in commodities through index funds, hedge funds and directly from the financial sector so far this year.

The FAO report said speculation on world food markets is reducing the effectiveness of increased food production.

...In 2006, companies such as Cargill India, Adani Exports and ITC and AWB together bought up to 30 million tonnes of Indian wheat. While some of this was for conversion into processed goods, a significant part was for resale at a profit. This indicates large trading companies are stockpiling supplies to ensure higher prices.

Food for thought as liberalisation increases hunger | theage.com.au

[Jet Gorgon]

^ Oh my god, it wasn't the US ripping people off? Impossible.

[Hootad Binky]

Why would it be? Who said it was? Thanks for the astute financial analysis.

[kingwilly]

shouldnt this be moved into issues so that those that desire can salivate and argue for pages to come while the rest of us dont have to be bothered.

[Rattanaburi]

^Beer prices in restaurants in Thailand were much lower before the farangs came. The rich foreigners are driving prices up hurting the poor people! Hookers used ot be a lot cheaper too. Darn foreigners!