Hungry for Profit: The Ethics of Speculating on Food Prices

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Hungry for Profit: The Ethics of Speculating on Food Prices

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Food commodities have become big business. But should society be playing with its #food for financial gain? http://bit.ly/SuVjqM @justmeans
Wednesday, September 19, 2012 - 9:05am

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From wheat to cattle, sugar to hogs, food commodities have become big business. But should society be playing with its food for financial gain?

Investing in the stock market has been likened to gambling. Of course, they are fundamentally different. Gambling is a zero-sum game; no actual value is created, the loser's money is simply given to the winner. Buying stock, on the other hand, creates value. The purchaser becomes an owner of a share of the company, adding value to a corporation and, by extension, adding wealth to the economy at large. The share price changes along with the company's value, according to fluctuating business conditions, such as supply and demand.

But what about food commodities trading? Does that create value like trading stock? A growing chorus of voices is saying no—and much more: It's making people hungry. The primary problem with speculating on food prices, its critics argue, is (surprise)...its effect on food prices.

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If you're an average American, you spend about 13 percent of your disposable income on food. But if you are one of the world's poor, you must spend upwards of 70 percent of what you earn.[1] Still, even average Americans feel the pinch when food commodities like corn or soybean go through price spikes—volatility caused in part by speculation on the food commodities market.

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Reynard is a Justmeans staff writer for Sustainable Finance and Corporate Social Responsibility. A former media executive with 15 years experience in the private and non-profit sectors, Reynard is the co-founder of MomenTech, a New York-based experimental production studio that explores transnational progressivism, neo-nomadism, post-humanism and futurism. He is also author of the blog 13.7 Billion Years, covering cosmology, biodiversity, animal welfare, conservation and ethical consumption. He is currently developing the Underground Desert Living Unit (UDLU), a sustainable single-family dwelling envisioned as a potential adaptation response to the future loss of human habitat due to the effects of anthropogenic climate change. Reynard is also a contributing author of "Biomes and Ecosystems," a comprehensive reference encyclopedia of the Earth's key biological and geographic classifications, to be published by Salem Press in 2013.

Keywords: Responsible Production & Consumption | Chicago Mercantile Exchange | Commodity Futures Trading Commission | Commodity Speculation | Commodity Trading | Dodd-Frank | Food And Agriculture Organization | Food Commodities | Hunger | Sustainable Finance | Sustainable Finance & Socially Responsible Investment

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