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Financialization, Food Pricing, and Speculation – A presentation by Steve Suppan, Thursday, November 17, 2011

This talk is a great chance to learn more about crucially important aspects of the political economy of the food system such as factors in commodity price volatility, the deregulation of derivatives markets, and the battle by the Commodity Futures Trading Commission to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act opposed by a $330 million Wall Street lobbying campaign and Wall Street’s congressional allies.

This talk is also available as an audio download (.mp3 – 86.0 MB) or as a video podcast (.m4v – 314.9 MB).

Steve Suppan outlines some of the U.S. and Group of 20 regulatory initiatives to prevent price distortion and market disruptions caused by excessive speculation. He discusses commodity index funds, which bundle agricultural and non-agricultural commodity contracts into an inveestment instrument whose unregulated “weight of money” has driven agricultural prices, since agricultural contracts are the often smallest component of the funds. Dark market trading of index funds, accelerated by High Frequency Trading strategies, has made prices more volatile and price risk management tools less effective, particularly for developing country importers. The global food price crisis of 2008 resulted in food and energy riots in at least 30 developing countries. This price crisis has continued, with food and energy prices being triggers of the revolts comprising the Arab Spring.

Steve Suppan has been a policy analyst at the Institute for Agriculture and Trade Policy since 1994. Much of Dr. Suppan’s work is to explain U.S. agriculture, trade and food safety policy to foreign governments and nongovernmental organizations, especially farmer organizations. This work has taken him to about 35 countries, most recently Costa Rica, South Africa and Mexico. Dr. Suppan has also represented IATP at meetings of the Codex Alimentarius Commission, the United Nations Commission on Sustainable Development, and the UN Food and Agriculture Organization. He was the NGO liaison to the U.S. government for the World Food Summit +5 in 2002. He was a lead author in the global report of the International Assessment of Agricultural Science and Technology for Development, a multi-stakeholder project whose executive summary was approved by 58 governments on April 12, 2008 in Johannesburg, South Africa. He has a Ph.D. in comparative literature and taught in the Department of Romance Languages at the University of Missouri-Columbia. He also studied philosophy at the University of Vienna.

 

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