BET THE FARM

Beginning with a simple question—“Why can’t inexpensive, healthy, and delicious food be available to everyone?”—Harper’s contributing editor Kaufman (A Short History of the American Stomach, 2008, etc.) embarked on an odyssey into pizza kitchens, tomato fields, biotech labs, United Nations conference rooms and commodities exchanges.

The author argues that we grow enough food to feed the world’s population, but it’s priced too high for the poorest one billion. “The price of basic farm goods drives world hunger,” he writes, “but it also drives the push for sustainability, the rise of long-distance food from nowhere, the scourge of cheap and unhealthy foods, the single-minded drive to own the smallest molecules of food, the declarations and pledges of the politicians, the global mania for markets, and the profit margins of many of the world’s largest corporations.” He notes that the content of our meals often has very little to do with agriculture and getting seasonal products and more with economics and the exigencies of international commodities markets. Kaufman explains the history of wheat futures and their role in stabilizing food prices worldwide for over a century. Yet these commodity pricing tools have been eclipsed in recent years by new trading structures, derivative-trading hedge funds that trade food futures, increase volatility and drive up the price of food. In short, food, one of the most basic necessities of life, has become another avenue of asset allocation. So how do we stop this shift in food pricing and profiteering? Because they are global, food derivative markets are nearly impossible to curtail, but the author suggests position limits for traders and a national grain reserve, among other possible solutions.

Kaufman went looking for a pizza and ended up on Wall Street, giving a revealing view into commodity markets and food pricing.