Food and hunger

Barclays chief Antony Jenkins announced today that the bank would stop speculating on food, saying the practice is “not compatible with our purpose”. It is unclear whether the bank will continue to broker speculative deals for its clients. Campaigners have renewed calls for tough regulation to prevent speculation fuelling price spikes and contributing to the global hunger crisis.

Jenkins announced the move today as part of the bank’s strategic review. He said the end to the bank’s trading in agricultural commodities for speculative purposes was an example of Barclays “putting its words into action”. He told UK MPs last week that he would build a “socially useful” bank and “shred situations where we're short-termist, too aggressive and too self-centred.” But Jenkins made no commitment to change the bank’s speculation on other commodities, such as oil, which has a knock-on impact on food prices.

World Development Movement campaigners protesting outside Barclays' 2012 AGM

Until now, Barclays has been the leading UK bank involved in speculation on food including staples like wheat, maize and soy. The bank...

Goldman Sachs made up to an estimated £251 million (US$400 million) in 2012 from speculating on food including wheat, maize and soy, prompting campaigners to accuse the bank of contributing to a growing global food crisis.

Goldman Sachs is recognised as the leading global player in financial speculation on food and other commodities, and created the first commodity index funds which allow huge amounts of money to be gambled on prices.

Anti-poverty campaign group the World Development Movement released the estimate today following the publication of Goldman Sachs’ 2012 results. The group is calling for tough rules to curb financial speculation on food, to prevent banks and hedge funds driving up prices.

The US has passed legislation to limit speculation, but the controls have not been implemented due to a legal challenge from Wall Street spearheaded by the International Swaps and Derivatives Association, of which Goldman Sachs is a leading member. Similar legislation is on the table at the EU, but the UK government has so far opposed effective controls. Goldman Sachs has lobbied against controls in both the US and the EU.

Christine Haigh, campaigner at the World Development Movement, said today:...

If you overdid it a bit on sweet treats over the festive period, you might have decided to go easy on them for a while. But campaigners in Cambodia are calling for more decisive action as land grabbing for industrial sugarcane plantations has been robbing communities of their land, homes and livelihoods.

Two million hectares - 12 per cent of the country’s landmass – have now been granted to private companies for industrial agriculture, with sugarcane one of the leading crops. At least 75,000 hectares of land have granted to private companies for industrial sugarcane production, with over 12,000 people estimated to have been affected by human rights abuses and environmental damage caused by the companies involved.

When the companies involved have arrived, local people’s homes and harvests have been burned down. The majority of people affected have land-based livelihoods, so the loss of land has pushed families into poverty, leaving them unable to afford school costs or hospital births for their children. The land that has...

Yesterday, Rich Ricci, the appropriately-named chief executive of Barclays' corporate and investment arm, told the parliamentary commission on banking standards that the bank was thinking of pulling out of agricultural commodities trading.

With Barclays being the biggest UK player in food speculation, and among the top handful globally, we’ve certainly been making sure that that they feel the heat for their role in contributing to the food price spikes that spell hunger and poverty for the world’s poorest people.

In January, following our nomination, Barclays won the global Public Eye award for the world’s worst company as a result of their role on food speculation. In April, shareholders at their AGM were greeted by WDM campaigners dressed as eagles, and in September the bank hit the headlines when the Independent published figures based...

Global food prices are soaring, pushing many more of the world's poorest people into hunger.

Financial speculators are rushing to cash-in on rising prices. Experts predict that betting on the cost of food will push prices through the roof, as it did in 2008 and 2011.

On Friday I was privileged to join five well-informed WDM supporters from the Tunbridge Wells constituency for an important meeting. The group were going to see their MP, Greg Clark, who also happens to be financial secretary to the treasury - the minister with responsibility for regulating food speculation.

With just two weeks to go until finance ministers from the 27 EU member states discuss their position on new regulation to curb financial speculation on food and other commodities, they were intent on making sure he heard that the public is angry about the way banks are allowed to gamble on food prices, and want to see the UK back tough rules to limit their involvement in the markets.

The constituents were given a fair if short hearing, and had chance to hand over a copy of our photo petition, containing messages from hundreds of people who want to see the UK government support action on food speculation.

But we ended the meeting with work still to do. Not only did he leave us with...

A vote in the European parliament today failed to remove loopholes in new regulation to prevent banks driving up food prices through financial speculation.

MEPs voted in favour of limits to speculation, but allowed loopholes to remain which risk rendering the new rules ineffective.

Campaigners in the UK sent more than 14,000 messages to their MEPs this week, asking them to stop food speculation by banks and hedge funds pushing food prices beyond the reach of millions of the world’s poorest people.

World Development Movement campaigner Christine Haigh said:

Watertight regulation is essential if we are to stop excessive speculation fuelling devastating food price spikes. If it remains in its current form, the controls will be too weak to properly tackle speculation. Now it’s down to George Osborne and his fellow finance ministers to back strict rules.

George Osborne and other European finance ministers are due to vote on the proposed regulation on 13 November.

More detail

If the amendments to remove the loopholes had been passed, they would have:

• Ensured that the limits apply to all commodity contracts, for their full duration,...

This week, ahead of World Food Day, the International Food Policy Research Institute and Concern Worldwide launched the 2012 Global Hunger Index (GHI). The index is there to categorise countries in relation to the number of undernourished people that live within them in an attempt to make their governments more accountable, guide international agencies to the key areas of the world and to track the trends of world hunger over time.

The countries that trail at the bottom of this report are Burundi, Eritrea and Haiti, whilst another 45 have a situation which is either serious or alarming. The index highlights the scale of what is still to be done in terms of world hunger as well as underlining Concern’s key policy directions that the developing world need to consider to work towards what they call ‘sustainable food security’. The report largely blames the prevalence of severe and extreme hunger on a mixture of poor policies, food price volatility, energy and water availability, land grabbing, biofuel production, increased urbanisation and a changing climate. 

The...

Last week, the Guardian newspaper published a letter from the World Development Movement’s director Deborah Doane which raised concerns about the suitability of Sharon Bowles MEP, candidate for the new governor of the Bank of England, because of what we see as her support for ‘light touch’ regulation of the financial sector. 

Sharon Bowles replied via the Guardian noting that a member of her staff has met with a World Development Movement (WDM) staff member, and that she doesn’t have sufficient time in her diary to entertain all meetings that are requested of her. 

While she is correct that a member of her staff has met with a WDM staff member in Brussels, we would like to stress why we felt this was inadequate. First, we are a movement-based democratic organisation, with 16,000 members and supporters, alongside a network of over 50 local groups. Members of 11 of our local groups* in the south east of England, where Ms Bowles has her constituency, have contacted her a number of times in the past year about food speculation. This is an issue on which Ms Bowles...

A costumed Lady Luck and a croupier in black tie, with a roulette wheel and giant playing cards, protested in front of the Tory party conference in Birmingham this morning, calling on George Osborne to stop bankers driving up food prices through financial speculation.

Ahead of the Chancellor’s keynote speech, campaigners asked him to back European regulation to curb financial speculation in commodity markets. Speculation is fuelling price volatility and pushing food prices beyond the reach of millions of people in developing countries.

 
George Osborne is due to meet his European counterparts on Tuesday 13 November to agree on the new legislation. The UK government has attempted to block effective controls on speculation.
 
World Development Movement campaigner Christine Haigh said: “We brought Lady Luck to the Conservative party conference to highlight the fact that banks and hedge funds are essentially gambling on food prices. Steep price spikes fuelled by speculation make the weekly shop more expensive for families in the UK, and for the poorest people in developing countries...

Last night we projected images from our supporters onto the Tory party conference, calling for bankers to stop betting on food.

For the past month we've been collecting as many photos as possible from members of the UK public holding up messages to George Osborne to regulate food speculation. We've had a great response with hundreds of photos and last night we projected those messages onto the Tory party conference:

The Tory party conference starts today and so we know that George Osborne is in town. By projecting messages on the conference venue and on surrounding buildings we are hoping that he feels the mounting public pressure for him to support new EU proposals to clamp down on excessive speculation.

We started off at the NIA, opposite the Tory conference venue:

...

Campaigners from WDM were joined today by Friends of the Earth Europe, Campact and SOS Faim to spell out ‘Stop food speculation’ using hundreds of pots and pans in front of the European parliament building.

The 925 pots and pans used represented the 925 million people facing hunger worldwide. The protest comes on the day of a key vote by MEPs on proposals to prevent banks and financial investors driving up food prices through financial speculation.

MEPs are voting today on a raft of proposed financial reforms known as MiFID (the Markets in Financial Instruments Directive). WDM is calling for strict rules to stop speculation driving food price increases and price volatility. 

Campaigners handed over a petition with over 100,000 signatures from across Europe on Wednesday to the lead MEP for the legislation, German Markus Ferber, and lead MEPs from the other main political groups.

The World Development Movement’s director Deborah Doane said: “We are experiencing the third food price spike in five years, and each one forces millions of people into poverty and hunger....

What do you want to see change to deliver a better food system? That’s what European citizens were asked recently – and the results have been impressive.

With the issues raised including fair prices for farmers, action to tackle food speculation and an end to food waste, and key decisions due to be taken by European decision-makers in the coming weeks, we wanted to make sure these demands didn’t go unheard.

We joined up with the organisers of the Good Food March, a pan-European initiative calling for a better European food system, to deliver some of the hundreds of images submitted by people across Europe onto the walls of the European parliament and the surrounding buildings. The results certainly turned a few heads in the city centre this evening, and will hopefully provide a talking point for those in the Brussels bubble as the...

With much of the UK captivated by the Olympics last week, the anniversary of the riots that rocked cities across England last summer received little attention. While it is to be welcomed that violence on such a scale has not been seen in the UK again since, in recent weeks various commentators have suggested that more disorder is likely, as young people report continued anger and disenfranchisement.

It’s perhaps unsurprising, given the social and economic conditions inner city communities across the country are facing. As the Joseph Rowntree Foundation recently showed, five years on from the financial crisis, which was caused by the reckless behaviour of some of the richest people on the planet, it is the poor who are paying the heaviest price through cuts to publis services and benefits, while bankers continue to reward themselves with bonuses bigger than many people will be paid for a lifetime of hard work.

Recent analysis of findings of...

The hunger summit that took place on Sunday was the UK government's attempt to address the issue of malnutrition among the world's poorest people. Its aim was to alleviate the suffering of the 'bottom billion' by securing commitments to reduce the rate of stunting among the world’s poorest children between now and the next Olympics in 2016.

With changes in production, consumption and the climate prompting greater concern for food security in the coming years for countries both impoverished and affluent, it is great news that the UK government is paying attention to this issue. However despite well evidenced and strong proposals for tackling hunger being put forward by the food sovereignty movement, for the most part the government's focus is on techno-fixes, such as scientific innovations in the food industry, and the role of the private sector.

But is this really the answer for the 'bottom billion', or is it instead an opportunity for large companies to develop hi-tech intensive farming techniques to tailor to foreign demand?

On Sunday, David Cameron will attempt to capitalise on the international presence in London for the Olympics to convene a ‘hunger summit’ – but campaigners have warned that the prime minister’s big business approach ‘risks entrenching the root causes of hunger’.

Political and business leaders and humanitarian groups at the summit are expected to announce a new target to reduce child malnutrition by the next Olympic Games in Rio in 2016. Former England football captain David Beckham has presented a letter to David Cameron urging him to tackle deprivation of essential nutrients early in a child’s life, which causes stunted growth.

The World Development Movement’s food campaigner Amy Horton said today:

“It’s great that David Cameron is using the Olympics to focus attention on the need to reverse the rising incidence of child malnutrition. But by promoting the role of big business in developing countries’ food markets, his approach risks entrenching the root causes of hunger.  

“Increasing the power of multinational companies over the world’s food is not going to improve child nutrition. Instead of corporate land grabs, we need local control over the resources on which food production depends. We need governments to be able to regulate international...

WDM food campaigner Amy Horton writes in the Guardian today that in the context of a major drought in the US, food speculators are driving up cereal prices, underlining the inherent vulnerability of a system in urgent need of reform. She notes that:

Biofuels – which last year swallowed almost 40% of the US maize harvest – have also been highlighted as part of the problem. In the US, pressure is growing to abandon targets for biofuels in car fuel. Livestock farmers are warning they won't be able to afford to feed their animals.

This is all well and good. But missing from the lineup have been financial speculators, who have piled back into the market. Want to know what a brewing food crisis looks like to them? Last week, US hedge fund manager Peter Sorrentino, commented: "It's like a big money tap has been turned on."

By June, markets in food derivatives were awash with $89bn in speculative cash. That figure is courtesy of Barclays, the UK's top food speculator, which earlier this year highlighted speculation as a "key driver" of rising prices.

Read the full article on...

Today 2,500 dairy farmers descended on Westminster to express their outrage at cuts in milk prices paid by the processing companies. Six companies control 93 per cent of UK dairy processing, giving them huge power. Farms are crashing out of business in a “market place that does not work and is not fair,” said the NFU’s deputy president. “I have never seen such frustration… Enough is enough.” 

The mood could not have been more different from another gathering of food producers that took place this week – the first for the UK food sovereignty movement. “I am so incredibly fired up! It really was the best activist gathering I've ever been involved in, with some concrete results, lots of like minded thinking, and loads of energy,” said one farmer from a Dorset co-op.

I joined over 100 growers, co-operative workers, researchers, campaigners and activists to help build the food sovereignty movement here in the UK. (Click here to see a word cloud showing some of the...

Download the annual review

Last week we launched our exposé of the Financial Services Authority (FSA) – UK's supposedly 'independent' regulator of the financial services sector. We revealed how the FSA – funded by the banks and staffed by ex-bankers – acts as a lobby arm for the banks. It’s a classic case of 'regulatory capture' where an industry watchdog, created to act in the public interest, instead promotes the interests of the businesses it's supposed to regulate.

Its mis-directed influence undermines the public interest especially in the area of winning new rules to tackle food speculation. The FSA's influence has pervaded into every level of EU decision making on financial reform through staff secondment and the lobbying of MEPs. The City of London want to continue betting on food without any restrictions and FSA has been working behind the scenes to forward this agenda.

We wanted to expose the FSA but also hold it to account. So alongside our report we launched an online action to get people to email Adair Turner, chair of the FSA, and then to follow up with a phone call. The FSA is not widely known by the public and so is not used to direct public...

European proposals for the regulation of the commodity markets are inadequate to prevent excessive speculation from contributing to food price spikes, according to a new report released today.

Proposals discussed yesterday by the European parliament’s Economic and Monetary Affairs (ECON) committee rely on a system of ‘position management’ or ‘position checks’ to prevent market manipulation and excessive speculation from distorting commodity prices. But the report, from the World Development Movement, argues that the proposals are doomed to failure and that a system of position limits is essential.

Financial speculation on the commodity markets is fuelling price volatility and contributing to price spikes, increasing food bills for consumers and driving up hunger and poverty.

The report, ‘Back to fundamentals’, shows that:

• Position limits are the international norm for regulating the commodity markets.

• Position limits have a track record of success - US markets functioned effectively for...

Participants arrive at the camp built specially for the Food Sovereignty Forum in 2007, in Selingue, Mali (Photo: Donkeycart)

Food sovereignty is about the right of peoples to define their own food systems. 

Advocates of food sovereignty puts the people who produce, distribute and consume food at the centre of decisions on food systems and policies, rather than the demands of markets and corporations that they believe have come to dominate the global food system. This movement is advocated by a number of farmers, peasants, pastoralists, fisherfolk, indigenous peoples, women, rural youth and environmental organizations.

The 6 pillars of food sovereignty:

1. Focuses on food for people: The right to food which is healthy and culturally appropriate is the basic legal demand underpinning food sovereignty. Guaranteeing it requires policies which support diversified food production in each region and country. Food is not simply another commodity to be traded or speculated on for profit.
2. Values food providers: Many smallholder farmers suffer violence, marginalisation and...

Ahead of the Rio+20 summit, Asian social movements have put together this statement on the fake Green Economy being pushed at the talks. It also outlines what they will be calling for at the summit.

Fight for Our Future! No Price on Nature!
 
We are movements and organizations from Asia, waging struggles on various fronts and arenas to defend our rights, resist policies and projects that cause harm and destruction, and to fight for immediate priorities and demands, as well as profound transformation of our societies.
 
We envision a social and economic system:

• that is aimed at providing for the needs of people and aspirations for a humane, empowering and liberating life in a manner that respects the earth’s capacity to regenerate, and to sustain life based on the integrity of natural systems;

• that is based on and promotes equity, parity, solidarity and mutual respect among people and nations regardless of gender, race, ethnicity, culture, capabilities and class;

• that promotes sharing of land, water, forests, atmosphere, eco-systems and territories  based on the principles of stewardship and not private ownership, and the rights of all people to equitable and responsible...

11 October 2011

Dear G20 Finance Ministers,

We write to you ahead of the October meeting of the G20 Finance Ministers to urge you to commit with your counterparts to take effective action to curb excessive speculation on food commodities. Excessive financial speculation is contributing to increasing volatility and record high food prices, exacerbating global hunger and poverty.

While there are many pressures on food prices, fundamental changes in supply and demand cannot fully account for the dramatic price fluctuations that have occurred in recent years.

In June, a report for the G20 by international organisations including the IMF and the OECD noted that “too much speculation can cause frequent and erratic price changes” in futures markets. Evidence suggests that financial speculators are less likely to make trading decisions based on information regarding supply and demand and are more prone to herding behaviours than commercial traders. Excessive speculation undermines the price discovery function of futures markets, driving real prices away from levels determined by supply and demand.

The High Level Panel of Experts on food security for the Committee on World Food ...

Shareholders attending the Barclays AGM in London on Friday were greeted by the World Development Movement’s two ‘evil eagle’ bankers on Barclays bikes as they entered the meeting, and our chants of ‘one two three four, Bank on hunger no more!’, and ‘speculation means starvation, what we need is regulation!’. Catchy, huh?

Our Barclays eagles were popular with the crowd of press photographers, and their pictures appeared in London’s Evening Standard that afternoon and most of the national papers the next day. As the AGM began, our policy officer Christine spoke live on the BBC News Channel about how speculation by banks like Barclays contributes to food price spikes.

Inside the meeting, Barclays’ CEO Bob Diamond was at pains to emphasise his call for banks to be ‘better citizens’. But two of our campaigners were there to challenge him, asking how Barclays could be a good citizen when its involvement in food speculation is fuelling hunger and poverty...

Campaigners from the World Development Movement will protest at Barclays’ AGM tomorrow, exposing Barclays’ role in fuelling global hunger by betting on food prices.

Where: Entrance to the Barclays AGM, Royal Festival Hall, South Bank, London SE1 8XX

When: 10.30-11.30am, Friday 27 April

Two suited, blue masked Barclays ‘eagles’ on Barclays bikes will join protestors holding placards reading, ‘Barclays banks on hunger’.

The campaigners also staged an award ceremony outside Barclays HQ in Canary Wharf today to hand over a ‘shame award’, which the bank won for speculating on food prices.

The World Development Movement estimates that Barclays made up to £189 million from speculating on food in 2011. The bank is the biggest UK player in commodity markets, and claims to be in the global top three. Massive influxes of speculative money in food markets have been driving sharp price spikes, sending the cost of food soaring beyond the reach of the world’s poorest people.

Barclays CEO Bob Diamond, currently in the spotlight over his £17.7 million pay package, responded to the Occupy movement by telling the BBC in November that banks must be “better citizens”. Diamond...

Last week was a big week for our campaign to regulate food speculation, with developments on the relevant legislation in both the European parliament and Council of Ministers. 

In order to remove the harmful effects of food speculation we need caps known as ‘position limits’ on the amount of contracts speculators can hold in these markets. We’ve been concerned that the European commission’s proposals contain a major loophole which would allow countries to avoid using position limits by instead using 'alternative arrangements such as position management'. 'Position management' is a weak system which is already used in the UK, and has effectively resulted in deregulation. Under this system, hedge fund Armajaro was able to buy up virtually the entire European cocoa supply in July 2010, pushing prices to a 33-year high.

Council of Ministers

Last week, expert civil servants from each of the EU member states met to discuss proposals, including position limits, to regulate speculation on food and other commodities. 

Because these meetings are conducted in relative secrecy, we’ve had difficulty finding out exactly what went on at last week’s meeting. But what we do know is that two of the...

UK consumers are paying 3.7 per cent more for food than they did a year ago, leading to calls for the Chancellor George Osborne to tackle financial speculation on food prices. The rise has added more than £100 to the average household’s annual grocery bill.

Inflation figures released today reveal that food prices rose by 1.2 per cent from January to February this year, contributing to the 3.7 per cent annual rise, which is well above the government’s 2 per cent target for overall inflation. [1]

Ahead of tomorrow’s budget, the World Development Movement is calling on George Osborne to back European measures to stop financial speculation by banks and hedge funds driving up food prices. Real incomes in the UK are shrinking and almost a billion people face hunger worldwide, but curbing speculation would help prevent price spikes and would cost the Treasury virtually nothing, says the anti-poverty group.

High prices are also harming British businesses. Premier Foods, owner of Hovis, yesterday announced a £259.1 million pre-tax loss for 2011, partially due to rising wheat prices. The global price of cereals rose by 35 per cent from 2010 to 2011. [2]

Deborah Doane, director of the World Development Movement...

James Angel, campaigns and policy intern

We might have hoped that the 2008 financial crash would have presented us with an opportunity to rethink the power and influence that the financial sector has amassed since its deregulation in the 1970s. But, far from this, since the crash we’ve seen ever-increasing financialisation, meaning that financial markets, motives and institutions have taken on even more of a role in our economy, in our political systems and within society at large.

In a desperate attempt to kick-start growth we have seen new avenues for financial speculation and investment explored. WDM has exposed the human cost of this in highlighting the role played by financial speculation on food commodities markets in causing spiralling food prices that have sent millions into poverty. But the scope of financialisation and the social and environmental havoc that it promises does not end there.

Rio+20: what’s on the table?

Next on the agenda for profit-hungry financial institutions like banks and hedge...

555 million women go hungry worldwide, according to estimates released today by the World Development Movement to mark International Women’s Day.

The anti-poverty campaign group is calling for action to tackle spiralling food prices, which disproportionately affect women. The EU will vote later this year on measures to prevent excessive financial speculation in food markets from driving up prices.

An estimated 60 per cent of the world’s 925 million hungry people are women, and 315,000 women die annually in childbirth due to lack of iron. Food prices in 2011 were 24 per cent higher than in 2010, driving more people into hunger, malnutrition and poverty.  

Indian government food advisor Biraj Patnaik told the World Development Movement:

Among the complaints of starvation deaths that we receive in my office to investigate, a large number are from single women who are bringing up children … Women often, given the gender inequity in our society, ration their own food so they can feed the children and feed parents."

Judith Atieno Odhiambo from Kenya told the World Development Movement how a sudden price hike affected her:

The prices shot up and later...

WDM was founded in 1970, by bringing together a number of groups which had been campaigning against world poverty during the late 1960s. We broke new ground by focusing on the causes of poverty and demanding policy changes rather than charitable giving. Since then, WDM has evolved into a democratic, politically independent organisation, with 15,000 supporters and a network of 60 local groups across the UK. Read more about our campaigning successes below.

• 2012 Following a prolonged campaign by a coalition of Scottish NGOs and local pressure groups including WDM Scotland, plans for a new coal-fired power station in Hunterston, North Ayrshire were shelved.
• 2011 After concerted lobbying by WDM supporters, French oil company Total postponed plans to mine tar sands deposits in one of the poorest regions of Madagascar. 
• 2010 After campaigning by WDM, RBS commits to developing external environmental, social and ethical risk statements and internally implementing similar policies for oil and gas, mining and metals and forestry and defence...

Barclays’ £1.5 billion investment banking bonus pool could pay for school meals for two years for the 23 million primary age children who attend school hungry across Africa, according to figures from the World Development Movement.  

The anti-poverty group has slammed the bank for its involvement in speculation on food prices which is fuelling global price spikes, incentivised by bonuses which it claims reward risky and socially damaging behaviour. 

The total bonus pool for the bank’s investment arm could pay for 9.6 billion meals, the campaign group said today.  

Barclays has been estimated to make up to £340 million a year from speculating on food, while almost a billion people go hungry worldwide. The World Development Movement is calling for tough regulation to curb speculation on food. The group has claimed today that big banks’ ‘bonus culture’ fuels gambling behaviour that risks people’s lives. 

Christine Haigh, campaigner at the World Development Movement, said today:

Big bonuses encourage bankers to take big risks, not only with financial stability through their debt-based investment, but also with people’s lives. The kind of ‘success’ Barclays has...

Guest post by Innocent Sithole, used to be Web intern