Briefing

WDM is campaigning to curb speculation on food. But we are also supporting a positive vision of a just food system, grounded in existing knowledge and practices. This briefing explores the idea of food sovereignty, how it's different from food security, and ways to make it a reality.

Update 5 October 2011: We have corrected the aid figures and their size relative to banks’ profits from food speculation; they now reflect the latest information.

Economists Jayati Ghosh, Robert Pollin and James Heintz review the links between futures markets and food prices.

The paper explores whether greater liquidity contributes to more stable prices, and whether futures markets can affect food prices.

It finds that the recent increase in liquidity, particularly marked since 2007, is correlated with higher and more volatile prices.

The authors also argue that futures markets affect food prices by influencing expectations of price movements, in turn encouraging producers to withhold supply and buyers to purchase as soon as possible in order to avoid future price rises.

They further argue that trading and prices are not based simply on supply and demand. They are also strongly influenced by factors such as investor psychology, herding behaviour, unequal access to market information, and the acitivities of large-scale traders.

The researchers find that:

• There is no evidence that the recent increase in liquidity has stabilised commodity prices
• Increased liquidity is in fact associated with price inflation and greater volatility
• The arguments and evidence reviewed do not support the claim that spot prices are set independently of futures prices

They argue for the...

Over 100 European and international organisations are calling for financial speculation on food prices by hedge funds and investment banks to be reined in.

This briefing was submitted as written evidence to the Environmental Audit Committee inquiry into a Green Investment Bank in October 2010.  It represents a summary of the report called 'A Bank for the Future - maximising public investment in a low-carbon economy', available here.

WDM iscalling for the policies and investments of RBS and the other recapitalised banks to be aligned with those of a green investment bank, to ramp up the levels of investment needed to reach climate change targets and transform the UK to a low-carbon economy.

In a joint effort by WDM and Jubilee Debt Campaign, this briefing outlines how in the run up to Cancun, the government has given over one hundred million dollars in loans to low income countries to ‘help’ them deal with the impact of climate change.

It outlines how the government is backtracking on their pre-election promises relating to climate finance and how these loans will lock countries further into poverty.

Baffled by 'derivatives'? Do you know your 'over the counter' from your 'hedge'? Food speculation is an issue that can get quite technical but here's our jargon busting glossary which will help steer you around the murky waters of financial markets.

Clearing exchange

A clearing exchange acts as the intermediary between the buyer and seller of a derivatives contract. So instead of the buyer and seller interacting directly, the clearning exchange becomes the buyer to each seller, and the seller to each buyer, of a contract. The clearing entity makes the payments to each side of the deal,
covering the buyer and seller from the risk of the other side defaulting. This in turn provides financial stability by insuring both parties against default.

In contrast, derivative contracts which are sold directly between two parties (see over-thecounter derivatives below) can be defaulted on as either side may not deliver either the goods or the money. It was non-payment of derivatives
contracts (not traded through clearing exchanges) which contributed to the 2007/08 financial crisis.

In return for being protected from default, buyers and sellers pay a fee to clearing
exchanges. This protects traders from default by the other party and creates a...

The World Development Movement general election toolkit will provide you with ideas and resources to help you engage with your parliamentary candidates from writing letters to planning a hustings event.

The template letters and press releases contained in the toolkit are also downloadable for you to customise.

Europe's proposed trade deals are based on the same liberalisation mantra that drove the deregulation of financial markets and eventually led to the current global economic crisis. The World Development Movement believes that there needs to be a fundamental review of the European Commission's pursuit of more free trade deals. This briefing is intended for MEPs to highlight key lessons from the global crisis and demonstrate why a new approach to trade is needed.

Millions of people working in agriculture, manufacturing and services
are not reached by Fairtrade. We need to change the unfair trade
rules that keep them in poverty. The European Union (EU) is now
pushing for unfair trade deals with over 100 countries. These deals
will put European companies first, not the 1.5 billion people in these
countries living on less than US$2 a day. This briefing explores the potential of Fairtrade.

This letter acts as a summary of the World Development Movement's views on the financial crisis, with detailed suggestions on how policy can be reshaped to build a fair global economy, one all people can benefit from.

The climate bill has now gone through parliament. This briefing takes a look at the state of play in the climate bill as of August, 2008, examining the various targets and pledges and outlining their likely consequences.

The European Union’s Global Europe trade strategy has been driven by the demands of corporate lobbyists in Brussels and is aimed at securing a number of regional trade deals designed to ratchet open markets in the developing world. The World Development Movement (WDM) believes that these agreements will legally ‘lock in’ a series of policies that will undermine the ability of these countries to provide basic needs, reduce poverty and develop. In this briefing WDM analyses how Europe’s trade deals could impact on the poor.
 

Trade has the potential to lift millions out of poverty. But the current rules of trade are biased in favour of multinational companies and often hurt the poor. This briefing summarises the World Development Movement’s trade campaign as of May 2008.

Trade has the potential to lift millions out of poverty. But the current rules of trade are biased in favour of big business at the expense of the world’s poor. Trade takes place on a number of levels – whether it is goods you buy, services you use or the direct exchange of money. In 2006, European officials and big European companies targeted developing countries for new trade deals. But history shows that these kinds deals make companies richer without benefiting the poor.

Significant changes are needed across the whole of our society and economy to really tackle climate change. While changes in our own lives to reduce our carbon emissions are important, we need the UK government to take substantial action if we are to achieve climate justice. This briefing shows some examples of what the government could do if there were the political will.

This briefing asks and answers a number of 'tricky questions' about the relationship between aviation and climate change. In doing so this briefing is a useful reference and summary of the issues surrounding aviation with respect to climate change.