The threat of rising food prices

This is as much a part of what’s wrong with our financial sector as the Greek and Irish debt crises.

While inertia continues to define the coalition government's approach to banking regulation, the bankers are happily enjoying yet another free-for-all spending splurge – and fears are emerging of a new bubble. This time, it's a commodity bubble, similar to the one that led to food riots around the world in 2007 and 2008.

In case you hadn't noticed, food prices are at an all-time high: the latest figures show food price inflation at 5.5 per cent, outpacing the overall inflation figure of 3.3 per cent. You'll be paying as much as 25 per cent more for your regular cuppa as tea prices rise; and we already saw the cost of our Christmas turkey go up by more than £3 before Christmas, due to the doubling in feed costs in 2010.

The Food and Agriculture Organisation's Food Price Index, released last week, shows that a range of basic food prices are actually higher than they were when food riots broke out in places like Mozambique, Egypt and Haiti just two years ago. In the first week of December, the benchmarked US wheat price reached $327 per tonne, which is a staggering 70 per cent higher than that for July 2010, just six months earlier.

Some market analysts would have us believe that it's a simple case of time-honoured supply and demand. But aren't these the same analysts who also said that mortgage derivatives were a good bet for investors? Market fetishists often fail to ignore the evidence as it suits them.

Although the long-term trends do point to a gradual rise in prices, due to a range of reasons from climate change and biofuel production to increasing consumption, basic supply and demand alone doesn't account for the high price volatility and huge changes being seen in recent months.

Price spikes of upwards of 70 per cent are being led by hedge funds, investment bankers and pension funds that have poured over $200bn into food markets since the financial crisis, betting on prices going ever higher. With few options to place your bets these days, and especially with the ready-made cash available through quantitative easing, food isn't a bad place to start – for the bankers, anyway.

A few extra pence for a loaf of bread doesn't seem like a lot to most of us, but the story is rather different if you're in a developing country, relying on imported staple foods just to get by.

Meanwhile, the replay of food riots began last week, with three people killed and 300 injured in disturbances that broke out in Algeria. For some of the poorest people in the world, as prices rise, education falls by the wayside; basic assets such as farm animals get sold, and a short-term crisis can lead to long-term chronic malnourishment for a generation.

Food isn't an asset like any other – it's fundamental to human life. Commodity markets exist to enable people to buy and sell food, but are now the best place for speculators to make a quick buck through murky "over-the-counter" trades and a self-fulfilling prophecy of ever-rising prices.

The story of food prices is as much a part of the picture of what's wrong with our financial sector as the Greek and Irish debt crises, or the obscene level of bankers' bonuses. The reality is that the same speculators who caused the global economic meltdown through their illustrious trade in sub-prime mortgages are now betting on our food system, too.

The issue has prompted the French president, Nicolas Sarkozy, to plan to raise the matter with Barack Obama later this week in Washington, as part of France's duties as leader of the G20.

So when the coalition government decides to ignore the evidence and turn a blind eye to regulating the banking sector, the result is inflation and ongoing volatility in financial markets, failing people far beyond our borders.

These markets need to be brought back under control, limiting excessive speculation, ensuring that markets are fully transparent, and not holding the rest of us to ransom through unnecessary and unscrupulous price rises.

Deborah Doane is director of the World Development Movement.

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Jeremy Corbyn fans are getting extremely angry at the wrong Michael Foster

He didn't try to block the Labour leader off a ballot. He's just against hunting with dogs. 

Michael Foster was a Labour MP for Worcester from 1997 to 2010, where he was best known for trying to ban hunting with dogs. After losing his seat to Tory Robin Walker, he settled back into private life.

He quietly worked for a charity, and then a trade association. That is, until his doppelganger tried to get Jeremy Corbyn struck off the ballot paper. 

The Labour donor Michael Foster challenged Labour's National Executive Committee's decision to let Corbyn automatically run for leadership in court. He lost his bid, and Corbyn supporters celebrated.

And some of the most jubilant decided to tell Foster where to go. 

Foster told The Staggers he had received aggressive tweets: "I have had my photograph in the online edition of The Sun with the story. I had to ring them up and suggest they take it down. It is quite a common name."

Indeed, Michael Foster is such a common name that there were two Labour MPs with that name between 1997 and 2010. The other was Michael Jabez Foster, MP for Hastings and Rye. 

One senior Labour MP rang the Worcester Michael Foster up this week, believing he was the donor. 

Foster explained: "When I said I wasn't him, then he began to talk about the time he spent in Hastings with me which was the other Michael Foster."

Having two Michael Fosters in Parliament at the same time (the donor Michael Foster was never an MP) could sometimes prove useful. 

Foster said: "When I took the bill forward to ban hunting, he used to get quite a few of my death threats.

"Once I paid his pension - it came out of my salary."

Foster has never met the donor Michael Foster. An Owen Smith supporter, he admits "part of me" would have been pleased if he had managed to block Corbyn from the ballot paper, but believes it could have caused problems down the line.

He does however have a warning for Corbyn supporters: "If Jeremy wins, a place like Worcester will never have a Labour MP.

"I say that having years of working in the constituency. And Worcester has to be won by Labour as part of that tranche of seats to enable it to form a government."