Donations to crisis appeals buy half as much food as in 2001

The World Development Movement has called for urgent measures to regulate financial speculation on food prices in the wake of the Horn of Africa famine, revealing that the price of food aid has doubled since 2001.

The World Food Programme paid $390 per tonne of food last year, compared with $200 in 2001. On Monday the organisation said it needed an extra $360 million in order to tackle the crisis now affecting more than 12 million people.

Speculation on food prices by investment banks like Goldman Sachs and Barclays Capital has dramatically risen in the last decade, pushing prices to record levels. Around $100 billion has poured into agricultural markets over the past ten years as financial players have looked for new areas to place their money, without a penny of this going to actual improvements in agriculture.

The US has already passed legislation aimed at preventing excessive speculation on food, and similar measures are being debated in the EU. But the UK government is set to block the European proposals. 

Deborah Doane, director of the anti-poverty campaign group the World Development Movement, said today: 

Donating to crisis appeals like the Horn of Africa appeal is extremely important and saves lives. But as food prices continue to rise, people’s donations have less and less impact. Not only have high food prices contributed to this horrific famine, but they are also making it harder to feed those affected.

Financial speculation is a major driver of high prices, and effective limits on speculative activity would make a real difference to the lives of millions of people. The current crisis should serve as a wake-up call to the UK government, which should do all it can to ensure that financial gambling no longer puts lives at risk.”

For more information, call Miriam Ross on (+44) (0)20 7820 4913, (+44) (0)7711 875 345 or email miriam.ross@wdm.org.uk