The High Price Of Food

2229 Words9 Pages
Today, the economic state of our world is highly connected and international. The global market influences food accessibility and hunger on an exceedingly large scale. The global food economy exists within a complex system that has widespread dire consequences if it finds itself in a crisis like we are currently seeing. Until the year 2000, the world witnessed a thirty year trend of decreasing food prices. While it is common perception that the global food crisis is occurring due to shortages in supply and increasing demand, nearly a billion people are now malnourished or starving due to financial speculation and a legacy of events put into motion by the industrialized world. The high price of food has the largest impact on global hunger…show more content…
Third, this paper will consider how the global food economy functions within a complex adaptive system and what the root causes for the global food crisis are. The final section of this paper explores the current state of the global food economy and solutions to the global food crisis through changes in policy. High Food Prices Financial Speculation The Commodity Futures Modernization Act of 2000 was passed to reduce systemic risk in markets for futures and over-the-counter derivatives, to transform the role of the Commodity Futures Trading Commission in order to provide a statutory framework for allowing trading of futures on securities, and to enhance the competitive position of the United States financial institutions and financial markets (H.R. 5660, 2000). Two years before the bill was passed, chairman of the Commodity Futures Trading Commission requested that her commission have the power to regulate financial derivatives and that an unregulated derivatives market would be a grave danger to the economy. Powerful actors such as Federal Reserve Chairman at the time, Alan Greenspan, and large financial institutions saw Born’s legislative efforts as a direct threat to the financial industry and successfully derailed her attempts with the Commodity Futures Modernization Act of 2000 (Schmitt, 2009). Once the CFMA of 2000 was passed, deregulated commodity trading in the United States was authorized by exempting over-the-counter commodity trading from Commodity
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