From 2005 to 2008, the price of food rose 80 percent and in 2008, the ranks of the hungry increased by 250 million in a single year. What caused this? In 2003, there were about $13 billion in global commodities index holdings. By 2008, more than $300 billion had poured into commodities index holdings – significantly upsetting a market as relatively small and sensitive as the wheat market. This week on Sea Change Radio, host Alex Wise speaks with Frederick Kaufman, author and a Contributing Editor at Harper’s Magazine who will explain how these very complex financial instruments called commodities index funds helped to create an inordinate amount of human suffering while upturning traditional ideas and concepts of supply and demand.
Here’s Kaufman’s article, The Food Bubble: How Wall Street Starved Millions and Got Away With It (PDF), from the July 2010 issue of Harper’s Magazine. And the story continues to grow – here’a a recent piece on rising corn prices in the NY Times, Rising Corn Prices Bring Fears of an Upswing in Food Costs.