Wednesday, June 22, 2011

More than Speculation on Speculation

Sent to the Minister of Finance:

Dear Mr. Flaherty,

I was absolutely appalled to read your comments to Reuters Insider TV on Wednesday June 15 in regards to France's proposal to tighten controls on commodity speculation. You are quoted as saying, "We try not to interfere in markets, including the food market...Markets will find their price levels. We know that's sometimes difficult in the oil situation and so on ... it's discomforting, but in the long run it's the best policy and we maintain our belief in open markets."

In essence, you are saying that the hunger and starvation caused by food shortages and high prices as markets "find their price levels" - in turn influenced by speculation - is "discomforting"! This apparent lack of sympathy with hungry people in Canada and abroad is both arrogant and cruel. If, indeed, you did not mean to say this, I urge you to clarify your remarks.

As for the speculation, which Agriculture Minister Ritz believes does not effect prices, you may wish to educate yourself on the effect that it does, indeed have. I recommend the following:

FAO (2010) ‘Final Report of the Committee on Commodity Problems: Extraordinary Joint Intersessional Meeting of the Intergovernmental Group (IGG) on Grains and the Intergovernmental Group on Rice’

O. de Schutter (UN Special Rapporteur on the Right to Food) (2010) ‘Food Commodities Speculation and Food Price Crises: Regulation to Reduce the Risks of Financial Volatility

C. Gilbert (2010) ‘How to Understand High Food Prices’, Journal of Agricultural Economics

World Bank (2010) ‘Placing the 2006/2008 Commodity Price Boom into Perspective’.

*I know there are people out there who disagree with my opinion. Please educate me in the comments!

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