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Food Futures

One of the funniest articles I’ve read recently was Robert Webb’s account of his experience writing a weekly column for the Daily Telegraph. He describes – for gleeful readers of the New Statesman – his battles with the commentators on the newspaper’s online edition. The internet’s equivalent to the ‘green Biro brigade’ of usually right-wing newspaper letter-writers, these ‘Ghouls’ as, Webb calls them, used the Telegraph’s comment function to heap scorn and ridicule on Webb.

These guys love Britain so much that they all seem to live in Gibraltar. Their ‘comments’ were characterised by a suspicion of nuance, a tin ear for irony, a conviction that political correctness and Stalinism were the same thing, and a graceless irascibility of the kind we are now expected to find endearing in Prince Philip. There was also an assumption of intellectual superiority, rather cruelly undermined by a vulnerability to cliché and an inability to spell.

The problem was not that they disagreed with Webb, but that their comments were aimed solely at reminding him what a ‘worthless bastard’ he was.

I hadn’t realised that these internet trolls had moved beyond the places I’d usually expect to find them – news sites, mainly – and on to food sites as well. In a post which seems to have gone viral this week, Shauna James Ahern of Gluten Free Girl explains the extent to which she’s been subjected to internet bullying:

Every day, there is some nasty, vituperative comment on a post, something I skim quickly then delete. It could be comments about my husband (‘He’s obviously retarded. Look in his eyes. There’s something wrong.’) about our life on Vashon (‘Oh that’s right, everything is perfect on  your fucking ISLAND.’), about our food (‘That looks like dog vomit. Why does anyone pay you to do this?’), and mostly about me (my weight? my writing? my hair? my mere presence in the world? take your pick).

I want to make this clear: criticism and debate are absolutely vital – even on food blogs. I have no truck with writers who believe that any form of critical thinking is ‘mean’ or ‘negative’. But I have no time whatsoever for bullies. I had a small brush with one (or two?) this week after publishing a post critical of the Toffie Food Festival’s Menu magazine. A few commentators using dodgy Hotmail accounts and a suspiciously identical IP address sent comments which were fairly personal and meant only to tell me and the world that my ideas are stupid.

But a decade in academia has helped me to grow rhino hide for skin and it takes more than a few bullies to stop me. So troll who lives at IP, you know who you are. As do I.

Troll at IP did, though, ask a good question, and one which is worth answering. He (or indeed she) responded to my point that the authors of Menu have a profoundly problematic conception of food as a consumer product – like jewellery or clothing – which can be used and thrown away at whim, by asking: ‘where do you live where you don’t have to buy food’?

Yes, dear troll at IP, you’re quite right: food is a product or commodity which has to be bought (unless, of course, you grow or rear it yourself). But there’s an important difference between food and bed linen, perfume, cutlery, or clothes, for example. Only one of those products is absolutely essential to human life – only one has a significant impact on people’s incomes and the ways in which they live. Only one can cause ordinary people to protest when prices become too high.

Food is, then, is bought by consumers and treated as a consumer product even though it’s significantly different from other products. Our understanding of food as a consumer product is a relatively recent phenomenon: it’s only a century or two old, and linked strongly to the industrial revolution and mass production, as well as the development of a very powerful advertising industry.

Why should we care about this? Given that the mass production of food allowed greater numbers of people to eat better and more cheaply than ever before, surely these processes could only be considered a Good Thing. There is nothing inherently wrong with the industrialisation of food production as long as it is environmentally sustainable, humane to animals, respects workers’ rights, and produces safe and uncontaminated food – which, as the industry functions at the moment, is not always the case.

Moreover, as I wrote last week, this conception of food as a consumer product means that we understand food differently. Food moves from being something we associate primarily with nourishment to being a commodity which has the same meaning for consumers as other, less essential goods. This means, for example, that they are more willing to throw away large quantities of food. As the United Nations’ Food and Agriculture Organisation reported a few months ago, the average consumer in the West wastes 95 to 115kg of food every year – and wealthy countries are responsible for half of the total amount of food wasted every year.

There are many other implications for seeing food as a consumer product – not least the foodie worship of food since the early eighties – and I’ll consider these more carefully in the next few weeks. For the moment, I’d like to take a quick look at food speculation.

Of the many causes of the current global food crisis, food speculation is the most contested and seems to be the most complicated to understand. As the UN’s Special Rapporteur on the Right to Food Olivier de Schutter as well as Oxfam and other organisations have argued recently, the deregulation of commodities markets in the West during the mid-nineties have had catastrophic implications for food prices.

Let me explain: farmers have long traded in food futures to secure their incomes. Farmers protect themselves against bad harvests by selling their produce in advance to traders. They use the profits they make in bad years – when they have less to sell – to protect themselves against future losses. This works well for traders, who do particularly nicely in good years. Writing about the United States, Frederick Kaufman explains how well this tightly regulated system worked:

The result: Over the course of the 20th century, the real price of wheat decreased (despite a hiccup or two, particularly during the 1970s inflationary spiral), spurring the development of American agribusiness. After World War II, the United States was routinely producing a grain surplus, which became an essential element of its Cold War political, economic, and humanitarian strategies – not to mention the fact that American grain fed millions of hungry people across the world.

But things changed at the end of the twentieth century. Partly because of intensive lobbying from hedge funds and banks, like Barclays, governments in the West deregulated commodity derivatives markets. Banks and investors became interested in trading on the commodities market – once the preserve of specialists like Glencore – when bankers at Goldman Sachs (yes, they really do their best to be the embodiment of venality) devised new investment products which included speculation in food futures. Investors which hadn’t before been involved in the commodities markets, like pension funds, were, then, willing to play the futures markets.

As a result of this, food – grain, cocoa, fruit, rice, and meat – can be traded in exactly the same way as other commodities, like gold, timber, and coal. Brett Scott writes:

The controversy can be broken down into two separate issues. Firstly, are financial players in commodity derivatives markets causing derivatives prices to disassociate from what the price ‘should be’ if it were reflecting the fundamental balance of supply and demand in the underlying commodity? Secondly, does such a disassociation in futures prices get transmitted into the real price of food people end up paying?

The answer from the UN and a range of other charities is a definite, ringing ‘yes’. Irresponsible banks are driving up the price of food, they argue. John Vidal cites two well-known examples of food speculation causing price spikes:

Last year, London hedge fund Armajaro bought 240,000 tonnes, or more than 7%, of the world’s stocks of cocoa beans, helping to drive chocolate to its highest price in 33 years. Meanwhile, the price of coffee shot up 20% in just three days as a direct result of hedge funds betting on the price of coffee falling.

But what role does speculation play in causing food prices to rise more generally? This is more difficult to pin down, as Scott implies. De Schutter argues, convincingly in my mind, that even if speculation was not responsible on its own for causing the spike in food prices in 2008, it was a major contributing – and new – factor. I think it’s worth quoting him at length:

a number of signs indicate that a significant portion of the price spike was due to the emergence of a speculative bubble. Prices for a number of commodities fluctuated too wildly within such limited time-frames for such price behaviour to have been a result of movements in supply and demand: wheat prices, for instance, rose by 46% between January 10 and February 26, 2008, fell back almost completely by May 19, increased again by 21% until early June, and began falling again from August. The 2008 food price crisis was unique in that it was possibly the first price crisis that occurred in an economic environment characterized by massive amounts of novel forms of speculation in commodity derivative markets.

The particular area of concern is speculation in derivatives based on food commodities. A study conducted by Lehman Brothers just before its bankruptcy revealed that the volume of index fund speculation increased by 1,900% between 2003 and March 2008. Morgan Stanley estimated that the number of outstanding contracts in maize futures increased from 500,000 in 2003 to almost 2.5 million in 2008. …the changes in food prices reflected not so much movements in the supply and/or demand of food, but were driven to a significant extent by speculation that greatly exceeded the liquidity needs of commodity markets to execute the trades of commodity users, such as food processors and agricultural commodity importers.

Food speculation is a manifestation on a very grand scale of a shift in thinking of the value and significance of food: here, food is simply another commodity to be bought and traded, often very lucratively. We know the futures are useful and important to farmers, but the unregulated speculation of food means that food prices are no longer linked to what people can afford to pay. When the UN and other organisations call for a greater regulation of commodities markets – to a return, to some extent, to the derivatives trading of the twentieth century – they are also pointing to the fact that food cannot be understood in the same terms as other commodities and consumer goods.

Creative Commons License Tangerine and Cinnamon by Sarah Duff is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

All comments, criticism, and ideas welcome.

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