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:: Report "The Hunger-Makers"

+ 26.12.2011 + The Hunger-Makers: How Deutsche Bank, Goldman Sachs and Other Financial Institutions Are speculating With Food at the Expense of the Poorest.

About one billion people around the world today are going hungry and suffering from malnutrition, with permanent damage to their health and little perspective for their lives. In 2010 alone, food prices rose by one-third, causing an additional 40 million people to plunge into absolute poverty. There was another record high: by the end of March 2011, capital investors like insurance companies and pension funds had invested 600 billion dollars in bets on commodities, including corn and wheat, in the form of securities launched by investment banks and hedge funds. Is there a demonstrable relationship? Does a financial industry that has gone out of hand harm the life and health of the poorest by driving up food prices?

 

foodwatch wanted to know the extent to which these allegations are substantiated and to clarify the debate by documenting the situation and the arguments used in detail. We therefore commissioned Harald Schumann, journalist and recognized expert on the world of finance, to review the most important analyses, speak with actors involved, interview researchers, and summarize the current state of the debate. foodwatch is now calling for specific political action to be taken based on the information Mr. Schumann gathered.

 

The foodwatch report, The Hunger-Makers: How Deutsche Bank, Goldman Sachs and Other Financial Institutions Are Speculating With Food at the Expense of the Poorest, provides overwhelming evidence that speculation with foodstuffs on commodity exchanges drives up prices and causes hunger and starvation to spread. This proof is enough to justify taking immediate political action. First and foremost, the European Union must stringently regulate trading on commodity exchanges so that trading no longer has negative impact on the price of food. Regulation of this kind is an important element in the long overdue regulation of the entire financial sector.

 

The German government must clearly commit itself to regulation. So far it has avoided taking this step, bowing to the dictates of the financial industry and the interests of farmers and agricultural exporters who benefit from high production prices. The government and lobby groups argue that there is no hard evidence for a connection between speculation and the adverse increase in food prices, whereby they ignore a multitude of documentation and are unable to prove that speculation is harmless. This attitude is not only morally reprehensible, especially when it comes to the life and limb of people. It also violates the precautionary principle enshrined in the constitution of the European Union, which calls for preventive action even if complete scientific evidence is still lacking.

 

foodwatch wants to use this report to help ensure that the European Commission and the governments of Germany and other EU states finally take action and assert themselves against the financial and agricultural industries. We want to provide supportive arguments to the European Parliament, a majority of whose members are calling for the stringent regulation of speculation on food. We also want this report to make a complex issue, dominated by the specialist language of experts, more accessible to the public. It is only when more people understand what is happening on commodity exchanges that the public will exert more pressure of the kind needed for policy-makers to buck the interests of powerful lobbies.

 

The funding for this report would have gone beyond foodwatch’s means. The generous support of Alexander Szlovak in Hamburg made this foodwatch investigation possible. We are extremely grateful for Mr. Szlovak’s commitment and wish to thank him here.

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