A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Agricultural financialization once again in the spotlight

January 28, 2013

The Deutsche Bank was recently criticized for offering again financial products linked to agricultural commodities. Released on January 18 at the opening of the Berlin International Green Week Fair, the announcement raised some concerns among the denigrators of speculation, such as Foodwatch, the German non-profit and independent organization that condemned a “reckless step.” The decision seems even more disturbing as it follows the spirited debate that stirred German public opinion last March regarding the links that could exist between the financialization of food products and world hunger, and resulting in a moratorium of agricultural financial products.

To justify its decision, the Deutsche Bank claimed that there was no “quasi-empirical evidence that can prove that the growing importance of agricultural financial products is causing higher prices or increased price fluctuations.” According to the financial institution, agricultural derivatives could even be beneficial by providing farmers with a secure investment vehicle and a protection against price volatility.

Beyond the tensions and psychoses that can be generated by heated debates on the financialization of agriculture, it is clear that financialization is a recent and growing trend. In 2000, it was intensified by the U.S. Congress vote of the Clinton Administration’s final bill––the Commodity Futures Modernization Act––that smoothed the deregulation of agricultural commodity markets and made them particularly attractive to investors.

Yet, such deregulation gradually changed agricultural markets into complex anticipation markets and altered psychological behaviors in a context of excessive and uncontrolled speculation, leading to increased agricultural price volatility, and widely threatening global food security.

Ultimately, we must deal with the symptoms of the growing financialization of agricultural markets. Because if agricultural futures markets are helpful, there is a pressing need to supervise agricultural derivatives markets and improve their transparency. Because no stable agricultural policy can see the light of day without financial regulation. It is with this in mind that momagri developed its ten proposals to regulate speculation in agricultural commodity markets1.

1 The summary of “momagri’s ten proposals to regulate speculation on agricultural commodity markets” is available from http://www.momagri.org/UK/points-of-view/momagri-s-ten-proposals-to-regulate-speculation-on-agricultural-commodity-markets_948.html
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Paris, 25 June 2019