Finance and Agrifood Commodity Chain

THE FOOD SOVEREIGNTY COLLOQUIUM 2014 - INFOGRAPHICS DISTANCES IN AGRIFOOD COMMODITY CHAIN Geographical Operational Cultural Decisional Separation between production and consumption triggered by globalization. Physical distance Weak knowledge of product ion condit ions Ihabilit y to drive decisions Middlepersons inthe chain How does financialization impact agrifood commodity chain? SCENARIO #0 CONTINUOUS PROD/CONS CYCLE Full clarit y in responsibilit y and roles origin Organic feedback loop bet ween production and consumpt ion. BANKS & TRADERS Total asset s of financial speculations in agri-commodit y market SCENARIO #1 COMMERCIAL MIDDLEPERSONS Externalizat ion 2006 2011 1800s or shading of costsand Introduct ion of int ermediary decision points impacts responsibility LJ 65$ bl 126$ bl SCENARIO #2 FINANCIALIZATION 1980s banks US WHEAT MARKETS 會 作 争 作 命 Financial Financial speculat ion share in USfut ures market deregulat ions and riseof 1995 2011 speculat ion 1990s trader firm Uncont rollable boundaries 2000s inv. funds 16% 61% lead to an obscuring effect of responsibilit ies. INVESTMENT FUNDS World food commodity price index trend Index: January 2002 = 100 FOOD PRICE VOLATILITY Overall invest ment in 1 agri-commodit y market Price increase from 2006 to 2008 2002 2011 200 +217% +136% +125% +107% 100 6$ b1 320$ bl 2 SPECULATIVE LAND GRABBING 2002 2004 2006 2008 2010 Communities desplacement Is financialization a solution or a cause of such effects on food security and human rights? Author: © Margherita Gagliardi Development Communications linkedin.com/in/margheritagagliardi Data sources Jennifer Clapp, "Financialization, Distance and Global Food Politics; International Monetary Fund. NEGATIVE EFFECTS