The ‘bubble’ description of the price hikes is plausible because more and more aspects of capitalism in this neoliberal period are becoming ‘financialised’. Thus, in the major mercantile exchanges for grains, investment funds and hedge funds have joined agribusiness and food processing firms as the major buyers and sellers. They are involved in these markets not in order to make a profit out of selling the commodity or through using it to produce other commodities, but in selling the right to sell the commodity at some fixed price in the future. This motivation creates the conditions for a bubble to develop.
Market is big pie which consist of all kind of the product as we all know. When everything was financialised of course food market and agricultural business was not left out, after 3 decades of relative stability , food prices dramatically increased last 3 years. Between May 2007 and May 2008, corn prices increased by 46 percent, wheat by 80 percent, soybeans by 72 percent; rice by 75 percent. As of this prices increase 130 million people were add to people who are starving already. Shocking number is it ? And we are talking about basic need of the person. Shelter and food is what person needs to survive. Oil prices skywriting, which crated reason for the food prices to increase and it was predicted. Thru out the inflation we know things go up and not necessarily our salary goes up , and how can we offered just basic needs. Even thought prices for the food were going up, we still have quotas for the production of the food , the following paragraph shows shocking information , that I discovered about the food production.
In Europe as well, since the formation of the European Common Market, the possibility of food self-sufficiency was undermined, as the objective shaping agricultural production has been the maintenance of a profitable price structure, even though it is achieved through the destruction of much wealth. Building a highly profitable agricultural sector, in fact, has meant instituting quotas regulating what quantity of each product a member country is allowed to produce, and imposing stiff fines on those who exceed these measures. Depending on the country and the particular quotas assigned to it, dairy farmers have been paid to kill their ‘surplus’ cows, so their milk production would not exceed the limits prescribed, and have been fined when they did not comply, while other farmers have been forced to uproot fruit trees, destroy ‘surplus’ crops, and so forth….
And in some part of the world people are starving, and as we read in the above paragraph information about how surplus is destroyed is hard to bare, it is the truth that we need to face. We can take U.S as example too, in one part of the country it is all well, people earn good income and very little percentage of people are starving and food is easy accessed, which almost creates so much waste as an example we can take New York. And I am sure there are states where people who are in very bad situation who are starving and have no home and shelter and no even just basic bread to feed their kids or themselves. Who control all this, why this can’t be divided in to equal part, all that waste could go to charities and to people who starve with in their own country. Maybe if some charity contest were created, people would have done a lot better job by trying to win. This is the following paragraph I thought was very interesting from the article.
Perfect storm’, however, is not the only description that obscures the social agents responsible for the sudden food price increases. For the crisis is also often depicted as a price ‘bubble’ driven by the irrational speculative activity of short sighted investors who are bidding up wheat, corn and rice futures far beyond their ‘true value’ in a desperate desire to wring every last bit of profit before the bubble bursts and the price collapses. The implication being that these investors are as caught up in the process as the people who do not have the money to pay for the corn flour to make their daily tortillas! So, according to this logic, if a market bubble is responsible for the death by hunger and malnutrition of millions, then nobody is to blame
Well investor can not keep themselves from any part of the market, so they had to create the bubble in food industry as well , and this is the paragraph that talks about some sad points , which created food prices to go up. Maybe I am very cynical about the whole situation and from the business point of the view maybe this is right way to do business. However “FOOD MARKET” was not left out from the bubble.
