UN Food and Agricultural Chief da Silva: Speculation Is an Important Cause of High Prices

Published on Spiegel Online International, Interview conducted by Susanne Amman and Michaela Schiessl, January 16, 2012.
In a SPIEGEL interview, José Graziano da Silva, 62, the new head of the United Nations aid organization FAO, discusses his plans to combat hunger as well as his efforts to limit speculation and the impact it has on dramatically fluctuating food prices … //    

… SPIEGEL: Why don’t you just call for a ban on speculation in food products?

  • Da Silva: We need stricter regulations, but not just in the area of food. New rules are not the only solution. There are other, important areas, such as the latest round of trade negotiations, the Doha Round among the members of the World Trade Organization. The industrialized countries should finally open their markets and get rid of their agricultural subsidies. It’s not that I’m overly optimistic in this respect, but it would be the right approach.

SPIEGEL: How does eliminating subsidies lead to less hunger?

  • Da Silva: For example, when the United States decided to end subsidies for corn-based ethanol last summer, the price of corn dropped immediately. It was felt in poor countries, like those in Central America, where corn is used for both food consumption and the feeding of livestock, and in Eastern Africa where corn is a key staple. The American decision had a direct and positive effect on the food situation.

SPIEGEL: Why are you reluctant to push back the financial industry?

  • Da Silva: I’m just saying that it’s not enough to restrict individual markets. But I’m also saying, just as clearly, that the deregulation of the financial markets contaminated the food market and made speculation possible in the first place. We have to regulate all markets where there is evidence of such excesses.

SPIEGEL: Then the people who are now hungry will have to be patient for a while.

  • Da Silva: I’m more optimistic than that. The euro crisis has shown that governments can agree to common goals very quickly. International regulations have been in place for a long time in other areas, such as in the financial sector. Now we also have to take this important step with food security, putting in place regulations also for the food sector and create a global governance system for food security. It isn’t the ultimate solution, but the beginning of a worldwide mobilization, which we need when it comes to this issue.

SPIEGEL: Where do you get your optimism?

  • Da Silva: One of the few good things about rising food prices is that they have created a global awareness of how fundamentally important it is to feed the world — the other is that higher prices give farmers incentives to produce. Put differently, hunger is finally being given top priority. We should and can take advantage of this, by coming up with a global strategy for food security.

SPIEGEL: Those are nice words …

  • Da Silva: … which can and will be followed by actions. The decisive factor is access to food, or to land, so that people can buy or produce food themselves. Globally, there is enough food for everybody, but for many people, especially the poor, it’s simply too expensive. They are going hungry, even with full shelves of food.

SPIEGEL: So the food crisis is really a financial problem?

  • Da Silva: Of course. And, in a first step, it can be solved with money. Using cash transfer programs, we have provided cash to the poorest families in Brazil, Mexico and Colombia since 2005, so that they can have a minimum income and feed themselves. The needs of about 120 million people were met in this way, and they survived the first food crisis, with its sharply rising prices, more successfully than in other countries. We should continue this sort of program — not to react to current crises, but to avoid future ones.

SPIEGEL: But that’s probably not enough:

… (full long interview text).

Links:

The Better World Movement;

Urban Evictions: Protection for the most Vulnerable, on poverty portal, Aug 22, 2011;

Russian Stocks Surge as Investor Risk Appetite Returns, on en.RIAN.ru, January 17, 2012.

Keep Space for Peace, on Yorkshire Campaign for Nuclear Disarmament /Campaigns.

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