The food price crisis and global financial meltdown had many causes, but it would be hard to overstate the role of the deregulation and privatization policies that had taken root in the 1990s and 2000s. Globalization and financial “innovations” pushed by speculative investors also mean that when U.S. food and energy prices rise, they affect prices around the world. So the passage of the Dodd-Frank financial reform bill in 2010 was an important step forward in establishing sensible rules to stabilize volatile commodity markets.
Over the next year, Dodd-Frank should make commodity markets more transparent and prevent just a few firms from dominating markets as it moves to implementation—should, but won’t unless the right regulations and definitions to implement the law are passed, and the resources are in place to make it happen despite Wall Street’s powerful resistance to change. We put together a short progress report on the U.S. commodity reforms to explain what’s happened so far with rules on position limits, commodity index funds, transparency, coordination with EU reforms and resources for rulemaking and implementation. Without clear rules, food prices and hunger could continue to grow the world over.
Read Speculation Update: Progress Report on U.S. Commodity Market Reforms for more.
