Finance commissioner Jonathan Hill urged to propose tighter rules on food speculation
A coalition of NGOs are today delivering an open letter to Lord Jonathan Hill, the EU commissioner responsible for financial services, urging him to tighten up rules proposed rules for addressing excessive price speculation on food and other commodities in financial markets. The letter, signed by groups including Global Justice Now, Oxfam International, Action Aid International and over 5,000 individual signatories, warns that:
"High and volatile food prices have had a devastating impact in poor and food dependent countries, causing increased hunger, poverty and instability. They also affect agricultural producers as well as consumers in the EU and around the world. Strict limits need to be set consistently throughout the EU on the amount that companies and persons can bet on commodity prices in order to curb harmful speculation."
In January 2014 the EU agreed to introduce position limits in the commodity derivatives markets through the 'Markets in Financial Instruments Directive II (MiFID II)' legislation. Position limits restricts the amount that companies can bet on commodity prices and was a key policy ask of the four year campaign involving hundreds of thousands of people across Europe.
- Since January 2014, the European commission has been tasked with implementing the legislation
- In the autumn of 2015, Europe's financial regulator (ESMA – European Securities and Markets Authority) published their proposals for where position limits would be set and how they would be calculated. Civil society groups say that the proposals are extremely weak and would render position limits ineffective – allowing excessive speculation on commodities
- The European Commission could adopt ESMA's weak proposals without amending them and according to sources within the commission Hill will be making a final decision on them imminently.
Heidi Chow, the food sovereignty campaigner at Global Justice Now said:
"The details of this legislation are incredibly technical and impenetrable to ordinary people, but the impacts of it are terrifyingly simple. Unless the Commission is willing to back stricter rules on food speculation, we risk unleashing a series of price spikes of staple foods, causing hunger and widespread food insecurity for millions of people around the world. Food is one of the most basic needs of humanity and food prices should not be treated like a gambling game for corporations to make huge profits from."
Lord Jonathan Hill, who is the commissioner for financial services, was appointed by David Cameron to the post in 2014 and has a previous career in PR and lobbying. The UK has fought within the EU to protect the banking and financial sector against the regulatory crackdown that followed the banking crisis.