Agriculture Reference
In-Depth Information
flows to the US with rising interest rates, in order to overcome the relative decline in its in-
dustrial productive capacity (Arrighi, 2007, p145). Suh conditions encouraged a preference for
holding capital in liquid form, and was accomplished by instituting rules promoting liberal
capital markets and deregulating banking.
4
Parallel deregulation in the financial services industry thus enabled cross-over investments by
banks, in addition to a process of concentration and centralization, suh that between 1980 and
1998 some 8,000 bank mergers occurred, accounting for assets of over $2.4 trillion (Shattuk,
2008).
5
As of July 2008, the Standard & Poor's-Goldman Sahs Commodity Index accounted for about 63
per cent of the index fund market share, and a 32 per cent share was held by the Dow Jones-
AIG index - with agricultural commodities accounting for about 30 per cent of these indices,
with the rest in energy, base metals and precious metals (IATP 2008).
6
Financial speculation compounded food price inflation spiked in 2008: rice prices surging by 31
per cent on Marh 27, 2008, and wheat prices by 29 per cent on February 25, 2008.
The New
York Times
(April 22, 2008) wrote: 'his price boom has atracted a torrent of new investment
from Wall Street, estimated to be as muh as $130 billion'; with the Commodity Futures Trad-
ing Commission noting that 'Wall Street funds control a fifth to a half of the futures contracts
for commodities like corn, wheat and live catle on Chicago, Kansas City and New York ex-
hanges. On the Chicago exhanges … the funds make up 47 percent of long-term contracts for
live hog futures, 40 percent in wheat, 36 percent in live catle and 21 percent in corn' (quoted
in Berthelot 2008).
7
Weis notes: 'Just under half of the world's total grain production (48 percent) is directly consumed
by humans, while 35 percent is fed to livestok and 17 percent to biofuel production. he surge
in the later two comes at a time when the yield gains associated with the Green Revolution
have effectively maxed out, and the volume of per capita grain production on a global scale
has been level since peaking in 1986' (2010, p327).
8
hus a GRAIN researher notes: 'Rih countries are eyeing Africa not just for a healthy return on
capital, but also as an insurance policy. Food shortages and riots in 28 countries, declining wa-
ter supplies, climate hange and huge population growth have together made land atractive'
(Vidal, 2010).
9
Weis notes that for agro-industrial producers and grain-oilseed traders 'the surging demand for
fuel and feed is a strong counter-force to rising production costs, and both pressures point to-
wards higher prices for basic foods' (2010, p328).
10
For details see ETC (2007), GRAIN (2007), and McMihael (2009b).
11
For example, in Colombia between 2001—2005, 263,000 peasant families were expropriated
from 2.6 million hectares by agribusiness and/or paramilitaries interested primarily in oil
palm development (Houtart, 2010, p107). Houtart claims that 60 million people risk expulsion
by biofuels (Houtart, 2010, p119).
