Is this why food prices have rocketed?

[Anna B]

I read this article - how bankers are making a fortune by forcing up the price of food and leaving millions to starve. Call me naive, I never put 2+2 together, but this sounds very possible to me. What do you think?

 

 

'....As it became clear there were problems in the US mortgage market, a select band of bankers decided to switch a large number of Goldman Sach's investments to other commodities - namely rice, wheat, corn, cattle, coffee and cocoa.

Such investments had been going on for some time but this marked a major shift towards them. Many other investment houses such as Merrill Lynch, Deutsche Bank and Lehman Brothers followed suit.'

 

The aticle goes on to explain how, as with the mortgage markets previously, the banks began lobbying for rules and safeguards to be relaxed until they were eventually abolished allowing for food price speculation, inflated trading and stockpiling to artificially inflate prices.

 

It continues

'At the end of 2006 food prices across the world started to rise sharply. Within a year the price of wheat had shot up by 80%, maize by 90%, rice by 320% The 2008 harvest of grain turned out to be the most bountiful the world had ever seen. Shockingly, people were starving not because there was not enough food but because the banks profiteering had made food unafordable.

 

Around the world, 200 million people - mostly children - who relied on cheaply imported foodstuffs sank into malnutrition or starvation. There were riots in more than 30 countries. The crisis continues today. This strategy has caused world food prices to soar leading to riots, famine and many deaths.'

 

'Jan Ziegler, former UN chief food advisor says this speculation has led to 'silent mass murder.'

 

 

Now this article was in the Daily Mail so may not be reliable, which is why I ask for comments from people who know about these things. All the facts and figures are in the article.

[Darth Vader]

Nothing surprises me about the banks. It's got beyond just greed, hasn't it? When it goes this far there must be another name for it?

[Cavegirl]

I remember on Sky News a few months ago that there was a report about millions of people being at risk from a shortage of animal feed reaching Mongolia from Russia. The nomadic people were losing their entire herds and were therefore unable to support themselves. The UN had called it a national disaster, but then the oil spill happened in the US and the whole thing seemed to be forgotten about or ignored.

 

From what I've read the cause of the food crisis is partly to do with speculators buying and selling food stocks as derivatives, but it's also to do with the recent spike in oil prices raising the costs of fertilizers and transportation- food importation companies in poorer countries just can't afford to absorb the extra costs the way that richer countries can.

 

I also saw something interesting on David Attenborough's documentary 'How Many People can the Earth Support' the other night. Apparently Britain, China and Saudi Arabia have been busy buying up huge parcels of land in third world countries upon which they can grow food to send back to their own people. He raised the point that huge amounts of crops are currently being grown in Ethiopia, but the people of Ethiopia are still starving because they don't have access to that food.

 

All I'm saying is that we can look closer to home and not just at Wall Street when criticizing these issues.

[Vague_Boy]

When it goes this far there must be another name for it?

 

Plutarchy.

 

Plutocracy is rule by the wealthy, or power provided by wealth.

 

An oligarchy is a form of power structure in which power effectively rests with a small segment of society distinguished by royalty, wealth, family ties, military control, or religious hegemony.

 

The combination of both plutocracy and oligarchy is called plutarchy.

[daftlad]

Nothing surprises me about the banks. It's got beyond just greed, hasn't it? When it goes this far there must be another name for it?

 

bankers are up there with m.ps and solicitors as regards to people i wouldnt wee on if they were on fire:hihi:

[Greybeard]

There's always room for speculation in any commodity, a British 'business-man' recently bought the entire European stock of cocoa beans.

 

It seems he did this once before in 2002 and made £40mllion out of the excersize !!

 

The big operators like Golgbum Sucks really don't care who gets hurt or even dies as a result of their speculations...it's really up to governments to regulate these greedy blood-sucker raping the planet, but the politicians in power are usually up to their eyes in debt to these people.

[lobster]

what is also making the problem worse particularily in the U.K is that 40% of our food is imported. given the pounds slide agaist the dollar & euro , together with ever increasing oil price things aint going to get better

[Rupert_Baehr]

I read this article - how bankers are making a fortune by forcing up the price of food and leaving millions to starve. Call me naive, I never put 2+2 together, but this sounds very possible to me. What do you think?

 

'....As it became clear there were problems in the US mortgage market, a select band of bankers decided to switch a large number of Goldman Sach's investments to other commodities - namely rice, wheat, corn, cattle, coffee and cocoa.

Such investments had been going on for some time but this marked a major shift towards them. Many other investment houses such as Merrill Lynch, Deutsche Bank and Lehman Brothers followed suit.'

 

The aticle goes on to explain how, as with the mortgage markets previously, the banks began lobbying for rules and safeguards to be relaxed until they were eventually abolished allowing for food price speculation, inflated trading and stockpiling to artificially inflate prices.

 

It continues

'At the end of 2006 food prices across the world started to rise sharply. Within a year the price of wheat had shot up by 80%, maize by 90%, rice by 320% The 2008 harvest of grain turned out to be the most bountiful the world had ever seen. Shockingly, people were starving not because there was not enough food but because the banks profiteering had made food unafordable.

 

Around the world, 200 million people - mostly children - who relied on cheaply imported foodstuffs sank into malnutrition or starvation. There were riots in more than 30 countries. The crisis continues today. This strategy has caused world food prices to soar leading to riots, famine and many deaths.'

 

'Jan Ziegler, former UN chief food advisor says this speculation has led to 'silent mass murder.'

 

If you have a completely uncontrolled food market, who will grow how much of what crops?

 

Futures trading in foods can (and indeed does) make some people very wealthy - they wouldn't bother doing it if there was no money to be made - but it also sets and maintains the market. Commodity trading - if done properly - smooths out market price fluctuations.

 

It's easy to say that demand will set supply, but it's not always that easy in the real world. If there is a glut and farmers can't sell their crops, where will they get the money from to grow crops next year? What happens if half of them have to give up farming? - You can have whatever demand you like next year; if the farmers are doing something else they wont be growing food.

 

The EU has the CAP - which is supposed to protect farmers from wild price swings, but instead has put up the prices of many foodstuffs. I don't know whether there are still milk and wine lakes, butter and beef mountains etc, but when those surpluses did exist, the consumer was often paying 2 or 3 times the fair price for foodstuffs just so that the surpluses could be stored.

 

If there is no CAP or other government intervention (and there is little evidence to suggest that governments are particularly efficient at controlling prices and supply levels) then it will have to be done privately (commodities trading) or - if you really want to - you could accept a 'free for all'. In such a situation, supply is likely to lag behind demand (because once a farmer stops growing food you lose the food he would have produced and it takes time to grow crops.)

 

The article said: "...'At the end of 2006 food prices across the world started to rise sharply. Within a year the price of wheat had shot up by 80%, maize by 90%, rice by 320% The 2008 harvest of grain turned out to be the most bountiful the world had ever seen Shockingly, people were starving not because there was not enough food but because the banks profiteering had made food unafordable...."

 

What the article omitted to say, however, is that 2007 saw dramatic rises in the price of oil. Those price rises had a very severe effect on pump prices in the US (where the tax on fuel represents a far smaller proportion of the price paid by the consumer) and many farmers grew crops for fuel, rather than feed purposes.

 

If you were a farmer and you could get far more money for your crops as biofuel than you would get as food crops, what would you do? - The article seems to have ignored the pressure on farmers to grow fuel crops. Had there been less pressure from 'green' organisations to shift towards 'new' carbon emissions (as opposed to ancient carbon from fossil fuels) then there would have been less incentive for farmers to grow fuel crops.

 

Why is there so much oilseed rape grown in the UK? Why does the CAP favour the growth of a Biodiesel crop in the UK?

 

Had OPEC kept the mineral oil prices down then there would have been little incentive for farmers to grow fuel crops.

 

Who put the oil prices up? Who (effectively) encouraged farmers to grow biofuel crops? If you're using 80% of your land and 80% of your effort to grow biofuel crops will that have any effect on the amount of land being used to grow feed crops?

 

The article goes on to say: "...Around the world, 200 million people - mostly children - who relied on cheaply imported foodstuffs sank into malnutrition or starvation..."

 

Why were they relying on cheaply imported foodstuffs? Were the parents too busy to grow food? (Busy doing things like beating the crap out of the parents in the next village/next region/next country.)

 

There are probably more AK47s than mattocks in Africa.

 

Why do the parents in those countries breed more children than they can feed? Everybody has the right to have children ... but that right comes with a responsibility attached. - The responsibility to feed your children.

 

World Population Growth was supposed to be on the agenda at the Copenhagen conference, but (surprise, surprise ) nobody got around to talking about it. - They were too busy arguing about how much money could be made in 'carbon trading' or how much money the developed world should pay to small Island communities who had mined their tiny Islands to obtain materials to build roads and buildings and then found that the holes they dug (a few yards from the shoreline and many feet below sea level) filled up with seawater.

 

Zimbabwe (when it was called 'Rhodesia') - was 'The Breadbasket of Africa.' Mugabe kicked out all those nasty greedy competent White farmers and turned Zimbabwe into the Basket Case of Africa.

 

The soil is still there; the soil is still fertile (Mugabe has rented out vast tracts to the Chinese so they can grow crops to feed their population.) Why don't the Zimbabweans revert to being the Breadbasket of Africa?

[chem1st]

Wrt Zimbabwe, trade embargos have led to the country's decline. I could buy food from their for profit and tobacco for something daft like 1/2000th of the price charged over here. If it was not illegal to do so because of the trade embargo's.

 

The life expectancy of Zimbabwe and surrounding country's continues to decline, nearly becoming less than that of Afghanistan.