Food & Water Watch Joins 200 Groups to Urge an End to Speculation that Drove Global Food Crisis

Food & Water Watch Joins 200 Groups to Urge an End to Speculation that Drove Global Food Crisis

WASHINGTON, D.C. – Food & Water Watch, along with a coalition of faith, farm, food, hunger and international development groups, today sent a letter to President Barack Obama and congressional leaders demanding decisive action to prevent speculation in the commodity markets from threatening the food security of hundreds of millions of people.   According to the coalition’s letter, “A significant part of last year’s food price fluctuations were the result of excessive speculation in the commodities markets by the very hedge funds and investment banks that helped create the current economic meltdown.” 

“Congress and the White House must wring excess speculation out of the commodities markets to tamp down on the tremendous food price volatility that is harming consumers and farmers worldwide,” said Food & Water Watch Executive Director Wenonah Hauter.

The letter was signed by 183 social justice and civil society groups, including 76 U.S.-based organizations and 107 international groups from 29 countries.  The United Nations Food and Agriculture Organization estimated that 200 million additional people in the developing world faced malnutrition because of surging food prices in 2008. The letter urges the president and Congress to pass legislation to re-regulate the commodity markets to prevent speculation from continuing to contribute to global hunger.

The letter states that the 2008 food price volatility “could have been stopped with sensible rules that, if enforced, would have staved off the malnutrition and starvation that was caused by excessive gambling of food prices.  Important reforms are needed now to prevent mega-investors from viewing the futures market like a casino where they can gamble on hunger.”

There are several proposals in Congress that aim to reform the commodities markets.  House Agriculture Committee Chairman Collin Peterson passed legislation out of his committee (H.R. 977, the Derivatives Markets Transparency and Accountability Act of 2009) that takes important first steps to prevent excess speculation from inflating food prices, but this legislation needs to be strengthened.  Senators Tom Harkin, Chairman of the Senate Agriculture Committee, and Senator Carl Levin have also introduced measures. 

“Congress is assembling important legislative building blocks that could prevent speculative agricultural price bubbles from increasing global hunger,” said Hauter.  “Strong commodities speculation reform measures must ensure that all commodity futures marketplaces are adequately regulated and that giant investment funds do not exert undo speculative pressures on food prices.”

To view the coalition letter, please click here.

Food & Water Watch, a nonprofit consumer organization based in Washington, D.C., works to ensure clean water and safe food in the United States and around the world.  We challenge the corporate control and abuse of our food and water resources by empowering people to take action and transforming the public consciousness about what we eat and drink.  For more information, visit www.foodandwaterwatch.org.