Agriculture and…Derivatives?


Recently I wrote on the problem of volatility in food prices caused by speculation in commodity prices. Questions are being raised about the appropriateness of  allowing financial instruments like derivatives to play a key role in the food sector and there is a growing feeling that an effort needs to be made to regulate this activity. But the how and who of this process was not clear to me. And then I read this article on financial regulation and discovered that this process actually runs through the House Agriculture Committee! Yes, you did read that right. So, the committee overseeing agriculture is in the key position to oversee financial regulation in the commodities sector. If this is really so, can we expect  some positive developments in this area which will lessen food price volatility?  Perhaps best not to bet the farm on that….

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