Heidi Chow tackles food speculation

Four years I ago I joined the World Development Movement (WDM)’s campaign to stop banks betting on hunger. The campaign was launched in response to the global food crisis of 2007-8, in which huge spikes in the prices of staple foods left millions hungry and food riots swept through major cities around the world.

One of the key drivers behind the surge in food prices was speculation on prices in the financial markets by investment banks and hedge funds. As millions were going hungry, banks were raking in the profits – a contemporary example of the social injustice and oppression that God calls on us to challenge.

To start with, we identified an EU legislative process through which we could fight for regulation of this dangerous activity and campaigned hard to ensure the inclusion of effective clauses in the legislative proposals. The biggest opponent to regulating food speculation was the UK government. The government’s close relationship to the City of London meant that its priorities lay with defending the profits of the financial sector, rather than standing on the side of the poorest people in the world and their need to access affordable food. We mobilised the public and managed to get over 25,000 emails and letters sent to the treasury – the government department responsible for financial regulation. We also protested outside the Conservative party conference.

We exposed the scandalous partnership between the government and the financial sector as they colluded to whip up opposition to regulation. Treasury ministers encouraged the City to coordinate lobbying efforts with the government and travelled to European capitals to persuade other governments to oppose tighter regulation. A Foreign and Commonwealth Office (FCO) minister even offered the FCO’s services to support the financial industry in opposing strong regulation.

Along the way we also shined a spotlight on some of the biggest financial players profiting from food speculation. We revealed that Goldman Sachs made £500 million in two years from speculating on food. We also made sure the public knew about the complicity of British bank Barclays, which was the UK’s top food speculator and, until last year, ranked in the top five global players. We made a spoof video with the makers of the BAFTA-award-winning TV series, The Revolution will be Televised. The video was shocking and funny at the same time, as it spoofed what would happen if Barclays was totally candid about how it made money. WDM’s local groups turned up to protest outside local Barclays branches around the country (pictured). We also protested outside the bank’s AGM in London three years in a row, as well as going inside the AGM to directly question the board about profiting from hunger.

Fearing the reputational damage we were inflicting on its brand, Barclays announced last year that it would withdraw from speculating on food.

This was great news. But behavioural change by banks is not enough, as Barclays could at any time start speculating on food again. So we kept pushing for regulatory change. We took the fight to Brussels, to influence the EU negotiations. We submitted consultation responses, protested outside the European parliament, got 450 economists to sign an open letter and lobbied MEPs. Working with our European allies, we handed a petition to the European parliament with 100,000 signatures.

Following several years of relentless public campaigning across Europe, in January the EU finally reached an agreement to regulate food speculation. Although the final agreement is far from perfect, it is a historic step forward and includes measures we had feared would be deleted due to financial sector lobbying. Campaigners turned food speculation into an issue that decision makers could not ignore, and, without continued public pressure the legislation would have been weak and ineffective.

This piece of legislation on its own is not going to solve global hunger. That will take a wider and bigger movement to address the system, the politics and power dynamics that perpetuate hunger.

WDM’s next campaign, launching in April, will challenge the corporate takeover of African food in a 21st Century “scramble for Africa”. For now, the new controls on food speculation will at least prevent banks from fuelling massive price instability and high food prices. Winning new regulation has been a collective effort and a feat of campaigning – mobilising the public to stand in solidarity with those who are poor and oppressed. Just like Jesus did.

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This article was published in the April 2014 edition of  Reform.

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