Every day 25 thousand people die of hunger or from hunger-related causes; an extreme consequence of the daily struggle carried out by the 925 million people suffering from malnutrition.

The countries with “alarming” situations are to be found in Africa: Chad, Burundi, Democratic Republic of Congo and Eritrea. In these countries as well as in Haiti, 50% percent of the population is undernourished.

While this ongoing crisis repeats itself (see the food crisis affecting millions of people in the Horn of Africa) food prices across the world are subject to extreme variations. Between 2007 and 2008 the prices of cereals and other food products not only doubled but in some cases more than doubled, only to plummet just a few months later.

In actual fact the 2008 crisis was not triggered by the lack of food. World production had, in fact, increased that year. In Africa the harvests of many countries that normally import food were higher than average and had larger reserves. Why then do prices increase this much?

The increase and volatility of prices are caused by three main factors: the increased use of agricultural land to produce biofuels; extreme weather events and climate change; the increased trading of raw commodities with forward contracts, that is to say speculating with “futures”, financial instruments which decide today what the price of a given food product, such as rice or wheat, will be tomorrow.

According to the International Food Policy Research Institute (IFPRI), which measures the Global Hunger Index, volatile food prices must be prevented by re-addressing bio fuel policy, regulating financial activity in food markets, adapting to climate change and mitigating its effects. Furthermore it is vitally important that food reserves be built up and that information about food markets be shared and their transparency ensured.

The European Commissioner for Agriculture and Rural Development, Dacian Ciolos, is committed, through his proposed reform of the Common Agricultural Policy (CAP) presented in October 2011, to “make the derivatives market more transparent and safer for raw agricultural materials”.

Arlene McCarthy, Vice President of the European Parliament’s Economic and Monetary Affairs Committee, has proposed a resolution to the Parliament to ask to stop the financial speculation on agricultural products. Finally, on 15 September 2010, the European Commission approved a European Regulation on “over-the-counter (OTC) derivatives, central counterparties and trade repositories”.

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