G20 finance ministers urged to tackle financial speculation on food

Date: 18 February 2011

Over 100 European and international organisations are calling on the G20 Finance Ministers, who are meeting this weekend, to rein in speculation on food prices by banks, hedge funds and pension funds.

The Finance Ministers will be discussing responses to the record food prices which are at ‘dangerous’ levels according to the World Bank with 44 million more people pushed into poverty since last June. French President Nicolas Sarkozy, currently the head of the G20, is pushing for tighter regulation of commodity markets in order to reduce food price spikes and volatility.

But there are concerns that some governments, including the UK, could try to block reforms in the EU and G20 due to fierce opposition from the banking industry. Strong statements have been made by key EU decision makers, including Commissioner Michel Barnier and the French Government, on curbing speculation, but it remains to be seen whether European financial reforms will deliver.

In a statement signed by the Fairtrade Foundation, Friends of the Earth Europe, New Economics Foundation, Corporate Europe Observatory and over a hundred more groups from around the world, political leaders are warned that immediate action is needed to tackle excessive speculation in food commodity markets: “This is an urgent matter… prices in agricultural and food markets are becoming more volatile with each passing month. Unless steps are taken to stop excessive speculation, it is only a matter of time until a disastrous new chapter in the global food crisis begins.”

Julian Oram, from the World Development Movement, which is leading the UK’s campaign to regulate food speculation said:

“Rampant speculation by a few super-rich financial traders is driving food prices to record highs and causing untold suffering around the world. By taking action now to curb excessive speculation on food, G20 leaders could save lives, reduce chronic hunger and prevent civil and political unrest.”