Wheat Supplies and Food Fears

	August 9, 2010

As the Russian landscape burns and Eurasia's agricultural zone sizzles in a record heat wave, the agricultural commodities markets are threatening to spawn a food crisis akin to the one in 2008. Mixed signals regarding the size of the global wheat supply and the likely impact of Russian Premier Vladimir Putin's August 4 decision to halt all exports of the grain from Russia for the rest of 2010 are leading to concerns that price inflation in the wheat market could usher another food crisis. The shortage in 2008 left hundreds of millions of people worldwide unable to afford basic foodstuffs, aggravating the overall impact of the later global financial crisis upon poor countries.

A key lesson of 2008 is that volatile global financial markets can result in food commodity price speculation that has dire consequences for the world's poorest. The inflationary trend that slammed poor countries in early 2008 began with a slow but steady rise in commodity trading prices in early 2007. By the summer of 2007, the overall volume of trading on the U.S. food commodities markets had skyrocketed to record levels, signaling that large investors recognized weaknesses in the stock and real estate markets and were seeking safer havens. The result was a phenomenal escalation, not only in the volume of food commodity investment, but also in trading prices.

The People Versus The Powerful

As BP CEO Tony Hayward testified before Congress yesterday, oil continued to gush into the Gulf of Mexico for the 58th day after the oil rig his company operated exploded and initiated the largest oil spill in U.S. history. While many lawmakers used this opportunity to press Hayward on his company's incompetence and malfeasance, Rep. Joe Barton (R-TX) apologized to BP for the White House's efforts to make sure the oil giant compensates the victims. Barton's stunning apology to a giant foreign oil corporation that has

devastated the Gulf Coast economy is emblematic of a larger philosophical divide in U.S. politics. On issue after issue, progressives have fought to hold big corporations accountable, stand by everyday Americans struggling to create a better life for themselves, and create a more just America for all. Conservatives, on the other hand, have aligned themselves with the nation's most powerful interests -- Big Oil, Wall Street, insurance companies, labor rights violators, and others whose mantra may as well be "greed is good." At stake in the battle between these two sides is the very idea of the American Dream -- that anyone who plays by the rules and works hard will succeed. The question Americans must ask of their politicians is clear: Which side are you on -- the people or the powerful?