In the latest episode of EU Watchdog Radio, Hans van Scharen talks to United Nations special rapporteur on the right to food Michael Fakhri and political scientist Yiorgos Vassalos. They discuss rising food prices and hunger, the link with financial markets and the lack of political will to curb the influence of financial speculation on food commodities, which exacerbates global hunger by driving up food costs.
This podcast is a follow-up to episode 43 in which Fakhri explained how hunger is not an issue of sufficient production but of bad policies and political failure. An example of this is food speculation, which could be curbed by policy measures - but is not.
Fakhri explains the role of international markets, where opaque trading in financial products is linked to energy and food commodities and price hikes. These financial products often have nothing to do with the real world of food, but have a deep impact on the lives of real people regardless.
Fakhri points out that huge food price increases after the invasion of Ukraine, and subsequent calls by right wing politicians and agribusinesses to stop the European Green Deal, have nothing to do with shortage of grain. Ukraine produces one percent of global production. Yet after the war started, global prices rose 70 per cent. For many countries and societies, such huge price hikes automatically mean hunger.
The United Nations also just published an alarming report revealing catastrophic hunger across the world in 2022. The report showed that 735 million people face chronic undernourishment, one third of humanity lives in moderate or severe food insecurity, a healthy diet is now unaffordable for almost half the world’s population and 122 million more people are hungry now than before Covid.
The existing European legislation called ‘Markets in Financial Instruments Directive’ (MiFiD) could have tamed ‘casino capitalism’ and curbed food speculation, but the reforms delivered very little.
Political scientist Yiorgos Vasalos has ample experience researching the power of the financial sector. He has shown how the political will (which existed 15 years ago) for reforming EU regulation to tame wild financial markets has slowly but surely evaporated during the past decade - even though these markets sent the global financial system into meltdown in 2008.
Just a few weeks ago, there was an EU agreement on the latest reform of MiFiD. Yet after months of intense negotiations between EU institutions, this reform again will deliver nothing to stop food speculation.
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