The long, hard fight against food speculation
23 February 2017
It has been almost a decade since the global financial crisis where financial traders and banks played fast and hard with excessive risk and burnt the global economy. The global price of food was not off-limits and food prices rocketed with excessive levels of speculation on the commodities markets, leaving worsening global hunger in its wake.
Last week, a seven year process to introduce regulation in the EU to tackle food speculation was delivered a hard blow. In 2014, after fighting a four-year campaign, the EU introduced into law ‘position limits’ – this limits the amount of the food derivatives market that banks and traders can hold. This was a historic win for campaigners as these had never been introduced in Europe before.
The commission was tasked with implementing this law and in particular, to work out where the limits should be. After three years, the commission’s proposal allows the limits to be set high, in other words they would allow traders and bankers to continue to speculate on food prices excessively. Think of these like speed limits, they are only truly effective if they are set low.
The only way to defeat this proposal was to get an absolute majority of MEPs in the European parliament to vote to reject this proposal. However last week, 339 MEPs voted to reject, which although is a good number is short of the 376 votes needed for an absolute majority. In short, the weak rules are going ahead. It's like we got speed limits introduced in towns for the first time but they can now be set up to 100mph.
This is massively disappointing and dangerous for communities across the world, especially those in the global south as high food prices hit the poorest the hardest - people on low incomes spend a greater proportion of their income on food.
Each EU member will use the commission’s guidelines to set national limits, so attention will now turn on national authorities to set them responsibly.
The campaign to tackle food speculation has been long and hard and at every step, there has been resistance from the financial lobby and corporations. But our campaign has kept regulation of food speculation on the political agenda since 2010 and going forward, we will not wane in our efforts to continue to tackle corporate power whether in the food system or elsewhere.