Moral Outrage
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World Dying of Hunger While Banks Make a Killing on Food

People in the village of Gumbi in western Malawi went unexpectedly hungry, that deep, gnawing hunger that prevents sleep and dulls the senses when there has been no food for weeks. Oddly, there had been no drought, the usual cause of malnutrition and hunger in southern Africa, and there was plenty of food in the markets. For no obvious reason the price of staple foods such as maize and rice nearly doubled in a few months.

It was the same story in 100 other developing countries. The explanation offered by the UN and food experts was that a “perfect storm” of natural and human factors had combined to hyper-inflate prices. US farmers, UN agencies said, had taken millions of acres of land out of production to grow biofuels for vehicles, oil and fertilizer prices had risen steeply, the Chinese were shifting to meat-eating from a vegetarian diet, and climate-change linked droughts were affecting major crop-growing areas.

But a new theory is emerging among traders and economists. The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are thought to be causing food prices to yo-yo and inflate. The charge against them is that by taking advantage of the deregulation of global commodity markets they are making billions from speculating on food and causing misery around the world.

“People die from hunger while the banks make a killing from betting on food,” says Deborah Doane, director of the World Development Movement in London.

What is more, says the UN, prices can be expected to rise at least 40% in the next decade.

[The Guardian]

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