Obama and G20 prepare Capitulation on Food Speculation
June 7, 2011 • 10:17AM

Exactly contrary to LaRouche’s call to impose price regulation on key food commodities to avert a new worldwide food crisis, the G20 is preparing for even more capitulation and famine.

End January this year, French President Nicolas Sarkozy, currently presiding over both the G8 and the G20 had decided to take up “the problem of excessive volatility of food commodities” as one of the subjects of the final G20 summit to be held early November in Cannes, southern France. When a journalist asked him what he thought about a report claiming financial speculation had no influence on the explosion of prices of agricultural commodities, the French president advised to “publish the study on April 1, fool’s day.”

But today the music has changed. While French farm unions are promoting a full return to regulation and the creation of public stockpiles —either by country or by geographical zones and notably in northern Africa— capable to resist both physical shortages, food riots and speculative attacks, the very idea of such measures is abandoned, in particular under pressure from the banking sector and their puppet, Barack Obama.

At the opposite side of the farm unions, Pierre Jacquet, the chief economist of the French Development Agency (AFD), presented a new study on the issue at the French Embassy in London. According to La Tribune, for Jacquet, speculation has to be considered an unavoidable evil: “speculation offers two services: one positive, by giving liquidity; one negative, by exacerbating price tendencies. The problem comes from the fact that it is very difficult to separate both effects. One cannot stop one without blocking the other.” From that Aristotelian “logic”, the solution is not to regulate but to ameliorate risk management via more and better “hedging.”

Already in February, a report of the EU Commission claimed speculation played no role in the rise of food commodities. Even the FAO the Commodity Futures Trading Commission (CFTC) said the same. Also the British NGO Oxfam, which advises Europeans to include insects in their food diet to fight climate change, said that “the link between price volatility and speculation is probably a minor one.”

Last week, French farm minister Bruno Le Maire travelled to the US to convince his American counterpart Tom Vilsack to assist at the “G20 of agriculture” organized in Paris on June 22-23 with all the G20 farm ministers to prepare a common policy.

According to La Tribune, Obama refuses to take up the issue since for the US, the debate on speculation is the domain of the finance ministers, not farm ministers. What will be pushed is the idea of a global “observatory on food reserves,” not in a productive and responsible dialogue among sovereign nation states but as a weapon pointed against Russia, China and others countries that might decide to limit their agro-exports in case of domestic food emergencies. China of course opposes such a scheme.

Also, says La Tribune, “The United States [Obama] protests against any idea of physical stockpiles in the least developed countries, considered a violation of the law of the market.”