MEP Markus Ferber’s much anticipated speech on the review of the Markets in Financial Instruments Directive expected tomorrow.
Since the 1990s, the deregulation of financial markets has increased together with the price volatility of foodstuffs.
Over the last few years, agricultural income has varied in some cases by as much as 30% (European Commission, 2010). The unpredictable fluctuation of food prices has led to food crises and revolts in several countries and has made farmers and consumers in these areas poorer and more vulnerable.
The rise of food prices, together with the mounting call for biofuels, have also dramatically increased the global phenomenon of land grabbing of farm land in developing countries, a process that sees fertile land as a new object of speculation.
A recent study by Friends of the Earth shows that hedge, pension and sovereign funds have fueled land grabbing through investments. Profit has been pursued with little or no regard for the rights of local populations, and in many cases, even without any knowledge on the part of the investors.
This kind of speculation has to be stopped, and new, much firmer rules need to be put in place. We wouldn’t need a new legislation if the finance sector was taking its responsibilities and set a limit to destructive speculation on foodstuff, argued Arlene McCarthy, vice president of the Economic and Monetary Affairs, adding that since this hasn’t happened yet, it’s up to the EU governments to support those who are demanding new rules on the subject.
There is currently much anticipation surrounding Member of the European Parliament Markus Ferber’s speech, due tomorrow. Ferber will present his report on Markets in Financial Instruments Directive (MiFID) to the Economic and Monetary Affairs Commission.
This directive provides a regulatory framework to financial markets and its review is an important opportunity to force a strict control and call for a halt on the worrying effects of speculation on foodstuff and farmland.
Together with around 20 organizations and NGOs, including Oxfam International and Friends of the Earth Europe, Slow Food has signed a joint statement from civil society on MiFID that calls for a greater control on dominant positions in financial markets, more effective monitoring of investments, more transparency in the sector, and better control of the high frequency trading that pollutes the market.
“By failing to regulate the financial industry in a way that stops excessive food speculation from contributing to higher and more volatile prices of basic foodstuffs.” Rachel Tansey, spokesperson for Friends of the Earth Europe said, “The EU would directly contravene its goal of eradicating extreme hunger and poverty, and instead, would exacerbate it”.
Download the joint statement here.
For more information:
Friends of the Earth Europe