Monday, July 28, 2008
According to the New York Times, Financial Times, and others, hedge funds and other investors are buying up farms, farmland, fertilizer, grain elevators, shipping equipment and other necessities for producing food.
Given the meltdown in the housing and financial sectors and the weakness in the U.S. economy, large investors figure that everyone has to eat, and so investing in food production is a sure thing.
That means that speculators will drive up food prices.
As Jim Hightower puts it:
"By 'owning structure,' they mean centralizing control of food in the hands of financial manipulators who have only one crop in mind: fat profits.
Price? Aha! That’s what consolidation of farms and storage facilities is all about. If you can lock down production and stockpile the supply – you can control price. If corn prices are lower than what investors want them to be, simply store the corn and force prices up. Or, if corn prices are down in the U.S., ship it to Japan or wherever else might be more profitable. And if these distortments cause a food crash? Hey, the speculators will already have sucked out billions in profits, and they will just move to the next hot investment.
Hedge funds bring nothing but greed and grief to the farm economy and our food supply, and they should be banned from 'owning structure.'"
Hightower may be right: we should demand that Congress prevent speculators from buying up one of the main necessities.Moreover, this just strengthens my conviction that we should guarantee our access to inexpensive and healthy food. See this and this.