A desperate and largely unknown humanitarian crisis is deteriorating in the Lake Chad Basin region of West Africa, forcing millions of people to flee their homes and leaving millions more in need of humanitarian assistance. Oxfam is providing life-saving support but help is urgently needed to prevent the crisis turning into a catastrophe.
Banks in France, Germany, Austria and the United Kingdom have pulled back from speculative trading in agricultural commodities, a controversial practice that Oxfam opposes because it is associated with food price volatility.
In response to a campaign by Oxfam France, “Banks: Profiting from Hunger”, on Feb 14, BNP Paribas suspended a $214 million agricultural fund and closed another fund that was partially-indexed to agricultural commodities. Crédit Agricole meanwhile closed three funds that allowed clients to speculate on agricultural commodities. Oxfam France welcomes the moves by BNP Paribas and Crédit Agricole.
In the UK, Barclays Bank announced on Feb 12 that it will stop speculating on food commodities. Oxfam welcomes this shift of policy, although it remains to be seen whether Barclays will stop selling speculative investment products to other investors as well as making its own bets.
Rising food prices
Following a similar campaign by Oxfam Germany last year, Deka-Bank, Landesbank Berlin, Landesbank Baden Württemberg, Commerzbank and Austria’s Österreichische Volksbanken AG all reduced their involvement with agricultural commodity funds. The two largest German commodity traders, Allianz and Deutsche Bank, have refused to change their policy on commodity speculation because they deny it has an impact on real food prices even though it is now widely accepted by a growing number of traders and researchers.
Oxfam-in-Belgium is also participating in a national campaign demanding Belgian banks to stop selling speculative investment products. In May, the campaign will publish new figures on these products.
Oxfam and other campaigning organizations, together with many economists and development experts, are concerned that financial speculation on agricultural commodities can make food prices more volatile, which can ultimately hurt poor consumers and farmers. Investments in often excessive and secretive financial products jumped globally from $10 billion in 2004 to $90 billion in 2011.
Stronger regulation and greater transparency
The lead of French, German, Austrian and UK banks in turning away from speculation on food prices should add weight to calls for stronger regulation and greater transparency of financial instruments that deal in commodities. Oxfam has been lobbying for this at the European Union, as well as the US and G20. The European Parliament has already voted in favor of introducing mandatory limits on speculation on commodity derivatives and Oxfam is calling on the European Council to follow suit.
Oxfam Novib in the Netherlands is also part of the ‘Fair Bank Guide’ coalition which each year reviews the social and sustainability policies of Dutch banks, another Oxfam effort aimed at increasing banking transparency.
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Have one minute? Watch 'Food Speculation: a matter of life and death'
Have seven minutes? 'Food speculation' This short film describes how food speculation works, what the dangers are, and what needs to be done.
Notes to editors
For more information or interviews about these campaigns the analysis behind them, please contact:
Pierre Motin, email@example.com, +33(0)177357610
Clara Jamart, firstname.lastname@example.org
Adreana Peitsch, email@example.com, +49(0)3045306935
David Hachfeld, firstname.lastname@example.org, +49(0)17624112361
Jules van Os, jules.van.Os@oxfamnovib.nl, +31(0)651573683
Peter Ras, peter.Ras@oxfamnovib.nl, +31(0)623300110
Wouter Fransen, email@example.com, +32(2)25016768
Thierry Kesteloot, firstname.lastname@example.org