The Financialization of Food: An Inquiry into the 2008-2011 Food Price Spikes

This dissertation investigates the question: has financial speculation contributed to global food price volatility since the mid 2000s? I problematize the mainstream academic literature on the 2008-2011 food price spikes as being dominated by neoclassical economic perspectives and offer new conceptual and empirical insights into the relationship between financial speculation and food. Presented in three journal style manuscripts, manuscript one uses circuits of capital to conceptualize the link between financial speculators in the global north and populations in the global south. Manuscript two argues that what makes commodity index speculation (aka ‘index funds’ or index swaps) novel is that it provides institutional investors with what Clapp (2014) calls “financial distance” from the biopolitical implications of food speculation. Finally, manuscript three combines Gramsci’s concepts of hegemony and ‘the intellectual’ with the concept of performativity to investigate the ideological role that public intellectuals and the rhetorical actor the market play in the proliferation and governance of commodity index speculation. The first two manuscripts take an empirically mixed method approach by combining regression analysis with discourse analysis, while the third relies on interview data and discourse analysis. The findings show that financial speculation by index swap dealers and hedge funds did indeed significantly contribute to the price volatility of food commodities between June 2006 and December 2014. The results from the interview data affirm these findings. The discourse analysis of the interview data shows that public intellectuals and rhetorical characters such as ‘the market’ play powerful roles in shaping how food speculation is promoted, regulated and normalized. The significance of the findings is three-fold. First, the empirical findings show that a link does exist between financial speculation and food price volatility. Second, the findings indicate that the post-2008 CFTC and the Dodd-Frank reforms are unlikely to reduce financial speculation or the price volatility that it causes. Third, the findings suggest that institutional investors (such as pension funds) should think critically about how they use commodity index speculation as a way of generating financial earnings.

The Financialization of Food: An Inquiry into the 2008-2011 Food Price Spikes

This dissertation investigates the question: has financial speculation contributed to global food price volatility since the mid 2000s? I problematize the mainstream academic literature on the 2008-2011 food price spikes as being dominated by neoclassical economic perspectives and offer new conceptual and empirical insights into the relationship between financial speculation and food. Presented in three journal style manuscripts, manuscript one uses circuits of capital to conceptualize the link between financial speculators in the global north and populations in the global south. Manuscript two argues that what makes commodity index speculation (aka ‘index funds’ or index swaps) novel is that it provides institutional investors with what Clapp (2014) calls “financial distance” from the biopolitical implications of food speculation. Finally, manuscript three combines Gramsci’s concepts of hegemony and ‘the intellectual’ with the concept of performativity to investigate the ideological role that public intellectuals and the rhetorical actor the market play in the proliferation and governance of commodity index speculation. The first two manuscripts take an empirically mixed method approach by combining regression analysis with discourse analysis, while the third relies on interview data and discourse analysis. The findings show that financial speculation by index swap dealers and hedge funds did indeed significantly contribute to the price volatility of food commodities between June 2006 and December 2014. The results from the interview data affirm these findings. The discourse analysis of the interview data shows that public intellectuals and rhetorical characters such as ‘the market’ play powerful roles in shaping how food speculation is promoted, regulated and normalized. The significance of the findings is three-fold. First, the empirical findings show that a link does exist between financial speculation and food price volatility. Second, the findings indicate that the post-2008 CFTC and the Dodd-Frank reforms are unlikely to reduce financial speculation or the price volatility that it causes. Third, the findings suggest that institutional investors (such as pension funds) should think critically about how they use commodity index speculation as a way of generating financial earnings.

Food price volatility and hunger alleviation-can Cannes work

Recent years have seen global food prices rise and become more volatile. Price surges in 2008 and 2011 held devastating consequences for hundreds of millions of people and negatively impacted many more. Today one billion people are hungry. The issue is a high priority for many international agencies and national governments. At the Cannes Summit in November 2011, the G20 leaders agreed to implement five objectives aiming to mitigate food price volatility and protect vulnerable persons. To succeed, the global community must now translate these high level policy objectives into practical actions. In this paper, we describe challenges and unresolved dilemmas before the global community in implementing these five objectives. The paper describes recent food price volatility trends and an evaluation of possible causes. Special attention is given to climate change and water scarcity, which have the potential to impact food prices to a much greater extent in coming decades. We conclude the world needs an improved knowledge base and new analytical capabilities, developed in parallel with the implementation of practical policy actions, to manage food price volatility and reduce hunger and malnutrition. This requires major innovations and paradigm shifts by the global community.

Food price and affordability update

This presentation outlines recent achievements in development of tools, protocols and methods to monitoring and benchmark food prices and affordability globally under International Network for Food and Obesity/non-communicable diseases Research, Monitoring and Action Support(INFORMAS)

Domestic policy responses to the food price crisis: The case of Bolivia

In face of the global food crisis of 2007-2008, severe concerns arose about how developing countries would be affected by the extreme short-term fluctuations in international commodity prices. We examine the effects of the crisis on Bolivia, one of the poorest countries of the Americas. We focus on the effectiveness of the domestic policy interventions in preventing spillovers of the development of international food prices to domestic markets. Using a cointegration model, we study price interdependencies of wheat flour, sunflower oil and poultry. The analysis suggests that the policy measures taken had little effect on food security during the food crisis. Throughout the entire period, perfect price transmission between the Bolivian poultry and sunflower oil markets and the respective international reference markets existed. Bolivian prices were determined by international prices and the policy interventions in the markets of these two commodities were not found to have had an effect. The government's large-scale wheat flour imports did not shield Bolivian consumers from the shocks of international prices.

Impact on Policy Responses to Food Price Crisis and Rural Food Security in Sri Lanka

In Sri Lanka policy responses have direct impacts on rural dwellers. Over 80% of Sri Lanka’s population live in rural areas and 90% of them represent low income dwellers. Their production system may be hampered by fragmented landholding, poor economics of scale, low investment levels resulting from poor financial services as well as inappropriate or limited technology. They are vulnerable to price hikes of basic foods and food security issues due to fragmented landholding and poor financial services. Policy measures to reduce the transmission of higher international prices in domestic markets exist to protect the food security of the vulnerable population. This paper will discuss the food policy and strategies implemented by the government and outside to the above facts this paper also describes the effectiveness of the policies forwarded by the government. The objective of this study is to analyse the impact of policy responses to the food price crisis and rural food security in Sri Lanka. Outside of the above facts this study also treats the impact of policies and decisions on the nutritional condition of rural dwellers. Furthermore this study is to analyse the fluctuation of buying power with the price hikes and the relation of above facts with issues like malnutrition. This paper discusses why policy makers should pay greater attention to rural dwellers and describes the multiple pathways through which food price increases have on rural people. It also provides evidence of the impact of this crisis in particular, through hidden hunger, and discusses how current policy responses should adjust and improve to protect the rural dwellers in the short and long term.

Can nutrition be promoted through agriculture-led food price policies? A systematic review

Abstract Objective: To systematically review the available evidence on whether national or international agricultural policies that directly affect the price of food influence the prevalence rates of undernutrition or nutrition-related chronic disease in children and adults. Design: Systematic review. Setting: Global. Search strategy: We systematically searched five databases for published literature (MEDLINE, EconLit, Agricola, AgEcon Search, Scopus) and systematically browsed other databases and relevant organisational websites for unpublished literature. Reference lists of included publications were hand-searched for additional relevant studies. We included studies that evaluated or simulated the effects of national or international food-price-related agricultural policies on nutrition outcomes reporting data collected after 1990 and published in English. Primary and secondary outcomes: Prevalence rates of undernutrition (measured with anthropometry or clinical deficiencies) and overnutrition (obesity and nutrition-related chronic diseases including cancer, heart disease and diabetes). Results: We identified a total of four relevant reports; two ex post evaluations and two ex ante simulations. A study from India reported on the undernutrition rates in children, and the other three studies from Egypt, the Netherlands and the USA reported on the nutrition related chronic disease outcomes in adults. Two of the studies assessed the impact of policies that subsidised the price of agricultural outputs and two focused on public food distribution policies. The limited evidence base provided some support for the notion that agricultural policies that change the prices of foods at a national level can have an effect on population-level nutrition and health outcomes. Conclusions: A systematic review of the available literature suggests that there is a paucity of robust direct evidence on the impact of agricultural price policies on nutrition and health.

World food price increases and Brazil: an opportunity for everyone?

Includes bibliography.

Mexico: food price increases and growth constraints

Includes bibliography

Food price tables for use in determining food costs,

Mode of access: Internet.

The food marketing cost index : a new measure for analyzing food price changes /

Issued Aug. 1980.

The rise and fall in the price of food, fuel and manufactured goods : interdependency between prices and technology determining comparative advantages and development paths

Green innovation, which enables us to extract energy from food crops, caused a food shortage in 2008. Countries suffering severe damage started to reconsider their agricultural policy with the aim of becoming more autonomous. The food price hike of the time looks like a reversal of the celebrated Singer-Prebisch thesis proposed in the 1950s. This paper examines the consequences of this trend on the comparative advantages and development strategies of developing countries. For that purpose, first, trends and short-run fluctuations in the prices of fuel and bio-energy crops are investigated. It is shown that the price series of fuels and the crops are synchronized only after the fuel extracting technology came into effect. Second, the reversal of the Singer-Prebisch thesis is underpinned by the generic form of an endogenous growth model developed by Rebelo (1991). It is shown that as an economy grows, appreciation of the non-reproducible, such as mineral resources and raw labor, over the reproducible, such as capital goods, is the norm rather than an anomaly. Third, the consequences of the food price hike and underlying capital accumulation on the development strategies of labor-abundant and low-income countries are explored. It is concluded that the impact of the food price hikes on the alteration of a development strategy is only incremental, without reinforcement from raw-labor-saving innovation. A case study of inventions by JUKI Corporation, a world-leader in the sewing machine market exemplifies the fact that, of all the major inventions the company have made, raw-labor-saving inventions have not dominated, although JUKI's machines are sold to one of the most raw-labor-intensive industries.

Monitoring the price and affordability of foods and diets globally

Food prices and food affordability are important determinants of food choices, obesity and non-communicable diseases. As governments around the world consider policies to promote the consumption of healthier foods, data on the relative price and affordability of foods, with a particular focus on the difference between ‘less healthy’ and ‘healthy’ foods and diets, are urgently needed. This paper briefly reviews past and current approaches to monitoring food prices, and identifies key issues affecting the development of practical tools and methods for food price data collection, analysis and reporting. A step-wise monitoring framework, including measurement indicators, is proposed. ‘Minimal’ data collection will assess the differential price of ‘healthy’ and ‘less healthy’ foods; ‘expanded’ monitoring will assess the differential price of ‘healthy’ and ‘less healthy’ diets; and the ‘optimal’ approach will also monitor food affordability, by taking into account household income. The monitoring of the price and affordability of ‘healthy’ and ‘less healthy’ foods and diets globally will provide robust data and benchmarks to inform economic and fiscal policy responses. Given the range of methodological, cultural and logistical challenges in this area, it is imperative that all aspects of the proposed monitoring framework are tested rigorously before implementation.

The increasing cost of healthy food

OBJECTIVE: To assess changes in the cost and availability of a standard basket of healthy food items (the Healthy Food Access Basket [HFAB]) in Queensland. METHODS: Analysis of five cross-sectional surveys (1998, 2000, 2001, 2004 and 2006) describes changes over time. Eighty-nine stores in five remoteness categories were surveyed during May 2006. For the first time a sampling framework based on randomisation of towns throughout the state was applied and the survey was conducted by Queensland Treasury. RESULTS: Compared with the costs in major cities, in 2006 the mean cost of the HFAB was $107.81 (24.2%) higher in very remote stores in Queensland, but $145.57 (32.6%) higher in stores more than 2,000 kilometres from Brisbane. Over six years the cost of the HFAB has increased by around 50% ($148.87) across Queensland and, where data was available, by more than the cost of less healthy alternatives. The Consumer Price Index for food in Brisbane increased by 32.5% over the same period. CONCLUSIONS AND IMPLICATIONS: Australians, no matter where they live, need access to affordable, healthy food. Issues of food security in the face of rising food costs are of concern particularly in the current global economic downturn. There is an urgent need to nationally monitor, but also sustainably address the factors affecting the price of healthy foods, particularly for vulnerable groups who suffer a disproportionate burden of poor health.