2012

One cause for the 2008 and 2010/11 food crises is the huge growth in financial speculation. It led to prices no longer being solely driven by supply and demand, but increasingly by the actions of financial speculators and the performance of their investments.

Read Farming Money here

Companies, investment funds and sovereign wealth funds are increasingly investing in land to hedge their price risks, driving land grabs. 

In January 2012, FoEE published the study “Farming Money”. It shows that a broad list of EU-based private financial institutions – banks, pension funds and insurance companies – are involved in trading or marketing investment products based on agricultural commodity futures or other agricultural commodity derivatives and complex instruments. Some of those which seem most involved are Deutsche Bank, Barclays, the Dutch pension fund ABP, the German financial services group Allianz and French banking group BNP Paribas. 

A significant number of financial institutions across Europe appear to also be involved in financing land grabs directly or indirectly. Allianz has a fund that invests in Bulgarian agricultural land, Deutsche Bank has a fund that invests in Brazilian farm land, and a subsidiary of the Italian insurance group Generali has purchased land in Romania. Other financial institutions have financed agribusinesses with explicit links to land grabs and human rights abuses, notably ABP in Mozambique, AXA in India and HSBC in Uganda. 

The study recommends a set of key measures to regulate EU financial markets and tighten corporate policies on financial services and investments in food commodity derivatives and land deals. In order to avoid excessive speculation influencing food prices, the de-regulation that has taken place over the last 20 years must be reversed. 

Caps on the size of the bets speculators can make, so called ‘hard position limits’, are essential to tackle excessive speculation. The EU proposals must be strengthened and improved supervisory capacities must be introduced.

Private financial institutions, including banks, pension funds and investors, should liquidate their open positions in food commodity derivatives and related funds and refrain from further activities that are not directly linked to hedging for farmers, food processing companies and related commercial traders. Fund managers and financial service providers should apply strict codes of conduct on the use and sale of food commodity products and agricultural land investment, as well as respective financial services.

Read Farming Money here

The jury prize was awarded to the British banking corporation Barclays, for its food speculation at the expense of the world’s poorest people. The People’s Award went to Vale. 88,766 people cast their votes online.

The organisers recognized two corporations that are exemplary cases of those WEF members and corporations whose social and ecological offenses reveal the downside of pure profitoriented globalization.

For its food speculation practices, the expert panel conferred the Public Eye Global Award on British banking giant Barclays. As the fastest-growing food speculator in the world, Barclays drives up food prices at the expense of the poorest. In just the second half of 2010, 44 million people worldwide were driven into extreme

poverty due to rising food prices.

“We hope this award will encourage European lawmakers to introduce tough regulations to curb food speculation and stop banks gambling with food prices while nearly a billion people go hungry. Women, children and elderly people in the Global South are often the hardest hit by food speculation,” said Amy Horton of World Development Movement, the NGO that nominated Barclays for the award.

A new record of people voted via the web for the Public Eye People’s Award. The most votes (25,041) went to Vale, followed closely by Tepco (24,245) and Samsung (19,014).

Vale is Brazil’s second-largest corporation, the world’s second-largest mining firm, and the largest global producer of iron ore. The corporation has a 60-year history tarnished by repeated human rights abuses, inhumane working conditions and the ruthless exploitation of nature. Vale is currently taking part in the construction of the Belo Monte Dam in the Amazon. The dam is likely to result in the forced relocation of 40,000 people, who have neither a voice in the matter nor will they likely receive compensation. 

further reading

• Read our case study on Vale
• Read Friends of the Earth Europe's report on food speculation

Vale, the Brazilian mining company present in 38 countries and the largest iron-ore mining corporation in the world is one of six finalists for the Public Eye Award, which annually elects the worst company in the world by popular vote and announces the winner during the World Economic Forum in Davos, Switzerland.

The company's entry in mid-2010 in the Northern Consortium Energia SA, responsible for building the  Belo Monte Dam on the Xingu River in Para, was considered by the organizers of the award the determining factor for their inclusion in the list of six finalists in the Public Eye this year.

Vale owns 9% stake in the consortium, which will be responsible for the forced displacement of about 40,000 people, directly and indirectly reaching 14 indigenous communities of the Middle Xingu, flooding and drying 668 square kilometers, and drying out 100 kilometers of the Big Bend River of the Xingu.

Cast your vote now!