Photo: Friends of the Earth International
European banks, pension funds and insurance companies are increasing global hunger and poverty. They are speculating on food prices and financing land grabs in poorer countries, according to a new report by Friends of the Earth Europe.
The report analyses the activities of 29 European banks, pension funds and insurance companies. These include:
The Farming Money report reveals the heavy involvement of these financial institutions in food speculation and the direct, or indirect, financing of land grabbing. Environmental and development organisations want strict regulation to stop these destructive activities.
Food speculation and the financing of land grabbing leads to a catastrophic instability in global food prices. This forces millions of people into poverty and hunger. European banks, insurers and funds that speculate on food and land are gambling with peoples’ lives whilst making huge profits. This industry needs stricter regulation to protect the poorest in society.
Friends of the Earth Europe wants financial institutions to investigate and publish their involvement in food speculation and investments in land. Banks, pension funds and insurers should end their speculation in financial products based on staple foods, which threatens the human right to food. European regulators should introduce caps on the size of bets speculators can make on food prices to curb excessive speculation.
Barclays is considered to be the third largest player in the commodities market worldwide. In 2009 Barclays Capital had US $7.9bn invested in commodities including agricultural commodities. The World Development Movement estimate that Barclays makes up to £340 million per year from speculating on food commodities.
RBS offers at least 50 products based on agricultural commodity futures. These have investments of around €249.31m in agricultural commodities such as wheat, soy, corn, cotton, and livestock. They also have part-funded loans to companies investing in palm oil and rubber plantations in Africa and south-east Asia.
None of the funds HSBC offer is specifically built around agricultural commodities, although many include commodities more generally. Outside Europe, HSBC appears to market commodities investments that include agricultural products. HSBC has been an important financier of Latin American agrofuels companies and finances palm oil companies in south-east Asia which violate human rights. They also have investments in companies linked to land grabs in Africa and South America.
Lloyds offer several funds that invest in agribusiness companies. These have major holdings in palm oil, grain, oil seed, cotton, soybean and corn. The size of Lloyds' loans to agricultural traders is unclear because most are joint ventures, but they are likely run into hundreds of millions of US dollars.
Santander has comparatively little investment in agricultural commodities with €793m invested in proprietary trading and €252m invested in commodity derivatives in 2010.
AXA has two funds that have up US $169.7m invested in agricultural commodities. They are also financing agribusinesses and forestry businesses that have been linked to land grabs to the tune of US $1.86bn
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