More than 450 economists from 40 countries have urged G20 finance ministers to prevent financial speculation in commodity markets from driving up food prices and fuelling hunger.
By Angela Monaghan
6:50PM BST 11 Oct 2011
Economists from universities including Cambridge, Oxford, Berkeley, Cornell and the London School of Economics signed a letter ahead of the meeting of G20 finance ministers in Paris later this week.
“Excessive financial speculation is contributing to increasing volatility and record food prices, exacerbating global hunger and poverty,” the economists wrote.
“With around 1bn people enduring chronic hunger worldwide, action is urgently needed to curb excessive speculation and its effects on global food prices.”
The economists said that proposals to increase market transparency were vital, but would not go far enough to tackle excessive financial speculation.
Instead, they urged finance ministers to support a move to cap the proportion of agricultural commodity derivatives markets that can be held by traders.
“Clear limits would provide regulatory certainty, promoting stable and sustainable derivatives markets to the benefit of food producers, consumers and broader economic stability,” the economists wrote.
Deborah Doane, director of the World Development Movement, said that “excessive” lobbying from the finance sector seemed to be delaying political action, both in the UK and elsewhere.
“This is despite the obvious suffering caused by speculation on this most basic human need, and despite the growing number of voices calling for action,” she said.
“Instead of propping up cynical financial gambling by speculators, the G20 finance ministers must act to ensure that strict rules are put in place to limit the hold of bankers over the world’s food markets.”
The World Development Movement said the United Nations Food and Agriculture Organisation and the Pope were among those who had already spoken out against speculation.