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.
Food prices are a matter of life and death to many in the developing world. Financial markets that should be helping food growers and processors to manage their risk and set prices have become a potential threat to global food security. Deregulated and secretive agricultural commodity derivatives markets have attracted huge sums of speculative money, and there is growing evidence that they deliver distorted and unpredictable food prices.
Financial speculation can play an important role to help food producers and end users manage risks, but in light of the harm that excessive speculation may cause to millions, action is required now to address the problem. This briefing explains what has gone wrong with financial markets and what could be done to fix them.
The US, EU and G20 must make agricultural derivatives markets work effectively for their most important stakeholders: food producers and consumers. To restore the useful functions of these markets and to prevent excessive speculation from fuelling food price volatility, Oxfam calls on the US, the EU and the G20 to put in place:
- New rules to increase transparency: real-time reporting of transactions; deals to be done on transparent platforms; appropriate disclosure requirements for different market participants;
- Adequate regulation: limits on how much prices can move up and down within a day; closing loopholes; limiting the use of passive speculation.