RD: Is food speculation the 21st century colonialism?

Collins English Dictionary defines colonialism as ” the policy and practice of a power in extending control over weaker peoples or areas”. Colonialism has been a recurring stage all along the time; from Egyptians, Greeks, Portuguese and Spanish and so on. However, these colonialisms have changed towards a neocolonialism where large companies and entities are controlling politically, economically and socially some countries based on privatization, expropriation, land buying and land renting, marketing and speculation in commodities such as food.

2007 and 2008 were very hard years because of the economic recession and the drastic increase of food prices causing a dramatically increasing the number of hungry people globally (FAO, 2012). This situation has caused different problems in the poorest communities.  Not only because of the security of food supply by itself but also because the families have less money to spend in education or health. Although the main causes of this crisis appeared to be the rising in demand (China and India), low food stock due to bad harvests, restrictions on exports, production of biofuels, high prices of fertilizer and oil, as well as climatic factors, there is another factor more important: market speculation.

Figure1.  Index numbers of world trade price

Source: Jayati (2009)

The capitalist system has achieved the well-being in a large number of countries (India, China, Indonesia and so on). However, it also has allowed the creation of tools and mechanisms that are increasing the gap between richest and poorests. While the number of people living in extreme poverty has declined in percentage terms, in absolute terms, these has risen (UN, 2012). The treatment of food (commodities) as financial instruments is squandering most of the possibilities of the poorest to reduce this gap. In fact, every day more speculators are investing in food markets, controling the food prices, while millions of people are dying each day by their inability to purchase food. For instance, according to (Lines, 2010), the number of outstanding contracts in maize futures increased from 500,000 in 2003 to almost 2.5 million in 2008.

In order to avoid this food chaos, the starting point must be to improve the transactions between companies (including international organization such as World Bank and the International Monetary Found, World Trade Organization) and countries. This improvement must lie in the control of the relationships between the companies and the governments without bargaining power; and the reduction of the subsidies to developed countries products in order to allow producers from developing countries to compete with developed countries products.

On the other hand, reinvestment and equity distribution has to be one the main economic policies to boost the development. Once the country has achieved the wealth from transactions, the international agencies should help them to redistribute it fairly between the population. It is important also, that inside the governments, the regulatory agencies, the politics and public agencies are able to understand and face the problems arose from the market speculation. It is necessary to acquire expertise in commodity markets, instead of regulating commodity derivatives and financial derivatives. Thus, agencies and governments and investors must distinguish between financial derivatives and commodity derivatives (Oliver, 2010); it is not the same to “play” with basic need than with secondary and tertiary sector activities. Another solution could be, according with (Munang, 2011), to promote more investment in locally-led, small-scale farming. It would help ensure longer-term food security for  the world’s most vulnerable under a changing climate and bring environmental benefits.

Moreover, not only the markets have to be revised but consumers should be the drivers of this change. Consumers have to limit the consumption of meat with a much higher ecological footprints (Oxfam, 2011) and to consume products with eco-labels such as Fair Trade (2012). It promotes the development of more sustainable products considering not only economical criteria but also political, social and ecological ones (including the rights of the producers).

In conclusion, although I think that currently we are facing to a new stage of colonialism due to big companies speculation, I really hope the future will be much greener, equitable and less selfish. Capitalism yes, but with socialism. How much we have to wait to get a total Decolonialism?

References:

Javiti (2010) Jav¡ti Ghosh, The unnatural coupling: Food and Global Finance. (2010). Data retrieved 29/03/2009 from: http://faostat.fao.org/.

FAO (2012). Retrieved 29/01/2012 from: http://www.fao.org/news/story/0/item/20568/icode/en

FairTrade (2012). Retrieved 29/01/2012 from:  http://www.sellocomerciojusto.org/es/

Lines (2010). Lines, T. 2010. Speculation in food commodity market. World Development Movement

Munang (2011). Munang, R. and Nkem, J.N. (2011) Using Small-Scale Adaptation Actions to Address the Food Crisis in the Horn of Africa: Going beyond Food Aid and Cash Transfers. Sustainability. 3: 1510-1516. www.mdpi.com/2071-1050/3/9/1510/

Oliver (2010). Oliver de Schutter. Briefing note 02- september 2010. United Nations Special Rapporteur on the right to food

Oxfam (2011). Growing a Better Future, 2011. Retrieved 29/01/2012 from: http://www.oxfam.org/sites/www.oxfam.org/files/growing-a-better-future-010611-en.pdf

UN (2012). Retrieved 29/01/2012 from: http://www.un.org/millenniumgoals/

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