Food campaign news
What is being done?
If we do nothing, we risk having food riots in the poorest countries and also an unfavourable impact on global growth. We want regulation of the financial markets for commodities.”
- Nicholas Sarkozy, French president
We are putting pressure on the UK government to back proposals to regulate betting on food prices in financial markets.
Since July 2010, we have campaigned to raise the issue and it is now firmly on the political agenda in Europe. Proposals for regulation are being drawn up in the EU, but the financial industry, with the help of George Osborne and the UK Treasury, is lobbying hard against them.
These coming months are going to be crucial. The proposals for regulation were published in October 2011 and we will have to keep up the pressure to ensure that they are not watered down by the banking lobby or by the UK government. You can help us now by writing to the Treasury.
Click on this timeline to have a look at what we have done so far.
What are we calling for?
Regulating food speculation is relatively straightfoward. WDM is calling for two key measures to be included in Europe’s proposals for financial reform:
- Transparency – all futures contracts to be cleared through regulated exchanges. Most contracts are currently done in private, which means it is impossible to know how much of what is being traded. Contracts need to be brought out into the open, in the same way that shares are traded on the stock exchange.
- Strict limits to be set on the amount that bankers can bet on food prices. Caps should be set on the amount of the market that can be held by the biggest players, and on the amount of the market that can be held by financial speculators as a whole.
If we get these two changes into place these markets will work better both for those who use them to insure against risk and for food consumers throughout the world.
What's happening in the United States?
Following work by the Stop gambling on hunger campaign in the US, regulation of food speculation was included in the Dodd-Frank Act in 2010 which was brought in following the financial crisis. This shows what a successful campaign can achieve.
However, Wall Street is now lobbying hard to hinder the implementation of the new regulations and the US campaign has another fight on its hands. Strong regulation in Europe would help our US allies overcome this final hurdle.