Market Perceptions and Opportunities for Native Plant Production on the Southern Colorado Plateau

Increases in revegetation activities have created a large demand for locally adapted native plant materials (NPM) in the southwestern United States. Currently, there is a minimal supply of local genotypes to meet this demand. We investigated the potential for the initiation of a native plant market in the southern Colorado Plateau. Through a literature search, interviews, and site visits, we identified existing native plant markets outside of the region as useful models to help initiate a regional market. We used web‐based surveys to identify and analyze current and future NPM needs and concerns. Survey results indicate that management policy strongly drives decisions regarding the use and purchase of NPM. From a demand perspective , lack of availability and cost of NPM has kept purchasing minimal, despite policy changes favoring the use of natives. For suppliers, further development of NPM is limited by inconsistent and unreliable demand and lack of production knowledge. The knowledge and tools necessary to initiate an NPM market are available, but inadequate funding sources and insufficient information sharing hinder its development. Communication among producers, land managers, buyers, and researchers, as well as partnerships with local growers, appear to be vital to initiating a functional market.     

Cooperative Emissions Trading Game: International Permit Market Dominated by Buyers

Rapid reduction of anthropogenic greenhouse gas emissions is required to mitigate disastrous impacts of climate change. The Kyoto Protocol introduced international emissions trading (IET) to accelerate the reduction of carbon dioxide (CO₂) emissions. The IET controls CO₂ emissions through the allocation of marketable emission permits to sovereign countries. The costs for acquiring additional permits provide buyers with an incentive to reduce their CO₂ emissions. However, permit price has declined to a low level during the first commitment period (CP1). The downward trend in permit price is attributed to deficiencies of the Kyoto Protocol: weak compliance enforcement, the generous allocation of permits to transition economies (hot air), and the withdrawal of the US. These deficiencies created a buyer’s market dominated by price-making buyers. In this paper, I develop a coalitional game of the IET, and demonstrate that permit buyers have dominant bargaining power. In my model, called cooperative emissions trading (CET) game, a buyer purchases permits from sellers only if the buyer forms a coalition with the sellers. Permit price is determined by bargaining among the coalition members. I evaluated the demand-side and supply-side bargaining power (DBP and SBP) using Shapley value, and obtained the following results: (1) Permit price is given by the product of the buyer’s willingness-to-pay and the SBP (= 1 − DBP). (2) The DBP is greater than or equal to the SBP. These results indicate that buyers can suppress permit price to low levels through bargaining. The deficiencies of the Kyoto Protocol enhance the DBP, and contribute to the demand-side dominance in the international permit market.     

Globalization's effects on world agricultural trade, 1960�C2050

Recent globalization has been characterized by a decline in the costs of cross-border trade in farm and other products. It has been driven primarily by the information and communication technology revolution and—in the case of farm products—by reductions in governmental distortions to agricultural production, consumption and trade. Both have boosted economic growth and reduced poverty globally, especially in Asia. The first but maybe not the second of these drivers will continue in coming decades. World food prices will depend also on whether (and if so by how much) farm productivity growth continues to outpace demand growth and to what extent diets in emerging economies move towards livestock and horticultural products at the expense of staples. Demand in turn will be driven not only by population and income growth, but also by crude oil prices if they remain at current historically high levels, since that will affect biofuel demand. Climate change mitigation policies and adaptation, water market developments and market access standards particularly for transgenic foods will add to future production, price and trade uncertainties.     

Local,regional and global markets: what drives the tuna fisheries?

Tuna products are amongst the most popular seafoods in the world and widely traded across the globe. Their global trade developed at a very early stage in the growth and development of tuna fisheries. In this article, recent evolutions of tuna markets in terms of products (for both sashimi and cannery-grade tuna products), market structures, and trade are introduced followed by a comprehensive study of global integration through price linkages. Most studies show a high degree of market integration and competition through prices at the world-wide level. Finally, we introduce some original results about the relationship between catches and prices (estimated coefficients of demand elasticity and flexibility), and provide answers to a few key questions for tuna fisheries and markets, including: How do consumers respond to price changes? Are fish price changes fully transmitted to consumers? Is there any economic incentive for fishers to comply with reduced catch quotas? Do fishers target particular tuna species according to the relative price of tuna species?     

Modeling HIV/AIDS Drug Price Determinants in Brazil: Is Generic Competition a Myth?

Background

Brazil became the first developing country to guarantee free and universal access to HIV/AIDS treatment, with antiretroviral drugs (ARVs) being delivered to nearly 190,000 patients. The analysis of ARV price evolution and market dynamics in Brazil can help anticipate issues soon to afflict other developing countries, as the 2010 revision of the World Health Organization guidelines shifts demand towards more expensive treatments, and, at the same time, current evolution of international legislation and trade agreements on intellectual property rights may reduce availability of generic drugs for HIV care.

Methods and Findings

Our analyses are based on effective prices paid for ARV procurement in Brazil between 1996 and 2009. Data panel structure was exploited to gather ex-ante and ex-post information and address various sources of statistical bias. In-difference estimation offered in-depth information on ARV market characteristics which significantly influence prices. Although overall ARV prices follow a declining trend, changing characteristics in the generic segment help explain recent increase in generic ARV prices. Our results show that generic suppliers are more likely to respond to factors influencing demand size and market competition, while originator suppliers tend to set prices strategically to offset compulsory licensing threats and generic competition.

Significance

In order to guarantee the long term sustainability of access to antiretroviral treatment, our findings highlight the importance of preserving and stimulating generic market dynamics to sustain developing countries'' bargaining power in price negotiations undertaken with originator companies.     

Discount cosmetic surgery: industry trends and strategies for success

Discount cosmetic surgery is a topic of interest to plastic surgeons. To understand this trend and its effects on plastic surgeons, it is necessary to review the economics of cosmetic surgery, plastic surgery's practice environment, and the broader business principles of service industries.Recent work looked at the economics of the plastic surgery market. This analysis demonstrated that increased local density of plastic surgeons was associated with lower adjusted fees for cosmetic procedures. A survey of plastic surgeons about their practice environment revealed that 93 percent categorized the majority of their patients as very or moderately price-sensitive. Fully 98 percent described their business climate as very or moderately competitive and most plastic surgeons thought they lost a sizable number of cosmetic patients within the last year for reasons of price.A standard industry analysis, when applied to cosmetic surgery, reveals the following: an increased number of surgeons leads to lower fees (reducing their bargaining power as suppliers), patients are price-sensitive (increasing their bargaining power as buyers), and there are few barriers to entry among providers (allowing potential new entrants into the market). Such a situation is conducive to discounting taking hold-and even becoming the industry norm.In this environment, business strategy dictates there are three protocols for success: discounting, differentiation, and focus. Discounting joins the trend toward cutting fees. Success comes from increasing volume and efficiency and thus preserving profits. Differentiation creates an industrywide perception of uniqueness; this requires broadly positioning plastic surgeons as holders of a distinct brand identity separate from other "cosmetic surgeons." The final strategy is to focus on a particular buyer group to develop a market niche, such as establishing a "Park Avenue" practice catering to patients who demand a prestigious surgeon, although this is likely a small segment of the overall patient population. Plastic surgeons that buck the trend toward discount cosmetic surgery must take concrete and potentially costly steps to implement a plausible strategy for distinguishing their practices within the crowded cosmetic surgery market.     

Quantifying Stock Return Distributions in Financial Markets

Being able to quantify the probability of large price changes in stock markets is of crucial importance in understanding financial crises that affect the lives of people worldwide. Large changes in stock market prices can arise abruptly, within a matter of minutes, or develop across much longer time scales. Here, we analyze a dataset comprising the stocks forming the Dow Jones Industrial Average at a second by second resolution in the period from January 2008 to July 2010 in order to quantify the distribution of changes in market prices at a range of time scales. We find that the tails of the distributions of logarithmic price changes, or returns, exhibit power law decays for time scales ranging from 300 seconds to 3600 seconds. For larger time scales, we find that the distributions tails exhibit exponential decay. Our findings may inform the development of models of market behavior across varying time scales.     

The threatened status of acipenseriform species: a summary

...increased demand has recently driven the price of black market smoked sturgeon as high as $ 26 a kilogram. With poachers standing to gain roughly a third of this price [besides the much higher price of caviar], a large fish could be worth thousands of dollars. Gary Hamilton in Canadian Geographic, July/August 1996, p. 62     

Micro-Level Adaptation,Macro-Level Selection,and the Dynamics of Market Partitioning

This paper provides a micro-foundation for dual market structure formation through partitioning processes in marketplaces by developing a computational model of interacting economic agents. We propose an agent-based modeling approach, where firms are adaptive and profit-seeking agents entering into and exiting from the market according to their (lack of) profitability. Our firms are characterized by large and small sunk costs, respectively. They locate their offerings along a unimodal demand distribution over a one-dimensional product variety, with the distribution peak constituting the center and the tails standing for the peripheries. We found that large firms may first advance toward the most abundant demand spot, the market center, and release peripheral positions as predicted by extant dual market explanations. However, we also observed that large firms may then move back toward the market fringes to reduce competitive niche overlap in the center, triggering nonlinear resource occupation behavior. Novel results indicate that resource release dynamics depend on firm-level adaptive capabilities, and that a minimum scale of production for low sunk cost firms is key to the formation of the dual structure.     

The promise and reality of personal genomics

The publication of the highest-quality and best-annotated personal genome yet tells us much about sequencing technology, something about genetic ancestry, but still little of medical relevance.Which country has published the largest per-capita number of personal genomes? The United States, the United Kingdom? Actually, it is Korea. A recent article in Nature by Kim et al. [1] presents the genome sequence of a Korean male, AK1 - the seventh published sequence of an individual human genome and the second from Korea. The rapid progress in personal genome sequencing is possible because so-called ''next-generation'' sequencing technology has decreased costs by orders of magnitude and increased throughput. But those advantages come at a price: short, error-prone reads derived from single molecules that have to be stitched back together to make a best-guess at the starting sequence. We are still at the stage of working out how to apply the available technologies to coax out biological information: the goal of a US$1,000 genome providing life-changing personal medical insights is still some way off.     

Effects of market price on the dynamics of a spatial fishery model: Over-exploited fishery/traditional fishery

We present a dynamical model of a spatial fishery describing the time evolution of the fish stock, the fishing effort and the market price of the resource. The market price is fixed by the gap between the supply and the demand. Assuming two time scales, we use “aggregation of variables methods” in order to derive a reduced model governing fish density and fishing effort at a slow time scale. The bifurcation analysis of the reduced model is performed. According to parameters values, three main cases can occur: (i) a stable fishery free equilibrium, (ii) a stable persistent fishery equilibrium and (iii) coexistence of three strictly positive equilibria, two of them being stable separated by a saddle. In this last case, a stable equilibrium corresponds to a traditional fishery with large fish stock, small fishing effort and small market price. The second stable one corresponds to over-exploitation of the resource with small fish stock, large fishing effort and large market price.     

Toward a dynamic evaluation of mineral criticality: Introducing the framework of criticality systems

A new methodology to quantify minerals’ criticalities is proposed—the criticality systems of minerals. In this methodology, four types of agents—mineral suppliers, consumers, regulators of the market, and others, such as the communities near mining operations—interact with each other through three types of indicators: constraints, such as the political stability in the mining regions, the mineral's substitutability and economic importance; agents’ interactions, such as buyer–seller bargaining; and interactive variables, such as the demand, supply, and price. When the criticality systems of two mineral groups are constructed, analyses that compare the indicators of these criticality systems can determine which group is more critical than the other. This methodology allows evaluation of criticality in a dynamic and systemic manner.     

Impact of Firm-Based Environmental Standards on Subsidiaries and Their Suppliers: Evidence from Motorola-Penang

How successful are multinational corporations in extending their firm-based environmental standards to their subsidiaries and those subsidiaries' local suppliers in their global production networks in developing countries? We address this question through an in-depth case study of how Motorola, a prominent multinational electronics firm with an extensive global production network, is using a set of firm-based standards to meet several new stringent European Union environmental directives. The case study demonstrates that these firm-based standards appear to be enabling a major subsidiary and its suppliers in one developing economy to reduce the environmental intensities of their production activities. This finding suggests that the firm-based environmental standards of multinationals with extensive global production networks might contribute to a leveling up of environmental standards in subsidiaries and their local suppliers, rather than a "race to the bottom", thus reinforcing the technique or intensity effects associated with open trade, investment, and technology policies.     

Identifying marginal supplying countries of wood products via trade network analysis

Purpose

The consequential inventory modeling approach for life cycle assessment implies that an increase in the demand for a specific product is met by the marginal suppliers within the market. The identification of marginal suppliers is however complicated by difficulties in defining appropriate geographical market delimitations. In this study, an advanced system thinking approach is proposed to address this challenge in the identification of marginal supplying countries of wood products.

Methods

Groups of countries which represent geographical markets are identified from trade data by using a network analysis-based clustering technique. Within these markets, marginal supplying countries are selected based on positive historical increments. The analysis covers 12 different products and all countries in the world using trade data for the period 1998–2013.

Results and discussion

Global indices allow differentiating how product-specific trade networks are separated into communities and how interconnected these networks are. Large differences between products and minor differences between trade years are observed. Communities identified for each product tend to overlap with existing geographical regions and seem thus realistic. By combining this information with product-specific production increment rankings, marginal supplying countries of wood products were identified.

Conclusions

The identified geographical market delimitation is a key for proper consequential life cycle assessment (LCA) inventory modeling in areas such as timber-based construction and biomass-based energy production. The method can in principle be applied to any product for which trade network data are available and ideally should be accompanied by a detailed analysis of technological constrains within the identified supplying country.

     

The speculator's bread: what is behind rising food prices?

Speculators increasingly invest into food markets for financial gain, with potentially devastating consequences for millions of poor people who cannot afford food at inflated prices....the market price of agricultural commodities is more important than those of nearly all other productsMost citizens in developed countries buy and consume their food without any consideration of how it is produced or how it gets from the field or slaughterhouse to the supermarket. They take for granted that they can afford it and do not care about its production and the economic, financial and other factors that eventually determine its price on the supermarket shelf. However, the market price of agricultural commodities is more important than those of nearly all other products. Increasing prices can cause hunger for millions of people and enormous political repercussions. In 2007–2008, a price explosion for grain and other commodities caused malnutrition among an estimated 115 million people and triggered hunger revolts in several nations. The prices subsequently dropped, only to soar again three years later (Fig 1), surpassing previous highs by the end of 2010. The revolt in Tunisia in January 2011 that eventually led to the government''s downfall was originally triggered by rising food prices.Open in a separate windowFigure 1FAO Food Price Index values from 1990 to 2010“The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices (representing 55 quotations), weighted with the average export shares of each of the groups for 2002–2004” (http://www.fao.org). FAO, Food and Agricultural Organization.Which factors or mechanisms determine the market price of food? If a drought or a flood were to destroy harvests in wheat-exporting countries such as Australia or Russia, it would certainly drive up the price of wheat. Yet, there is also ongoing debate about whether and how the 2007–2008 price spike might have been driven by financial speculation in commodity markets. This is not only a media debate, but also of scientific interest as it gets to the heart of economic theory; indeed, various research articles have tried to analyse and explain the causes of the 2007–2008 price spike.The revolt in Tunisia in January 2011 that eventually led to the government''s downfall was originally triggered by rising food pricesThe global market-prices for agricultural commodities are determined in different ways, depending on the commodity. Some products, such as rice, are mainly traded nationally, with only a small share being traded internationally; other commodities are traded in large quantities on international commodity exchanges, particularly in the USA. As the USA is one of the main producers and exporters of wheat, corn and soybean—and has a liberal market tradition—these exchanges are important for both the US and the global agricultural industry. In Europe, commodity exchanges for agricultural products play a lesser role, partly owing to the former Common Agricultural Policy of the European Union (EU), which tightly regulated the production of foodstuffs. However, this policy is now changing and exchanges are set to have a more important role in Europe too. The Paris commodity exchange is already a relevant marketplace for wheat, and the London commodity exchange has an important role in the global trade of coffee, cocoa and sugar.The price of any commodity should reflect the levels of supply and demand. Of course, fluctuations occur and are sometimes justified by fundamental factors, for example a bad harvest or increased demand. However, other external factors—such as a lack of information, asymmetries, externalities, conflicts of interest and agency problems—can also influence prices on commodity markets. In addition, outright speculation (for instance by hoarding), price bubbles and even market manipulation can repeatedly influence prices. The largest grain companies in the world, such as ADM, Cargill, Dreyfus and Bunge, have an interest in maximizing their profits and do so by buying and selling commodities at the most suitable time. Even farmers speculate on commodity markets, for example by withholding their harvest when they expect a price rise. To keep these factors and interests under control it is necessary and indeed legitimate to regulate and control markets, not just for food commodities.Commodities are not only traded physically on ‘spot'' or cash markets, but also subject to forward buying through ‘futures''. A future is a contract between a producer—that is, a farmer—and a buyer that specifies the amount, the price and the delivery date of a purchase. Similarly, buyers—such as millers—can use futures to buy a certain amount of grain at a guaranteed price ahead of time. Many farmers and end-users take advantage of futures to pre-sell or pre-purchase agricultural goods to insure themselves against market fluctuations. This ‘hedging'' reduces their risks and enables them to invest more safely.Intermediary traders ensure that the two sides meet. Traditionally, these traders are established firms that buy and sell futures from producers and to consumers, thereby providing the necessary liquidity. They shoulder the risks and gain their profits from the difference between the price stipulated in a future and the final market-price. These firms, naturally, have a profound knowledge and understanding of the commodity markets in which they are trading.In addition, such trading can take place both on exchanges (then called ‘futures trading'') and bilaterally ‘over-the-counter'' (OTC). Modern trading in commodity futures began in the USA during the mid-nineteenth century. Chicago, where the first modern wheat futures were traded, is still the largest and most important marketplace for agricultural commodities in the world, even though Asian countries have contested this in recent years.As futures no longer require the seller to possess the actual goods and because physical delivery is replaced by cash exchanges, their volume can be separated from the actual quantity of the commodity; their volume can also increase indefinitely as long as enough intermediaries want to deal with them. In the past, though, relatively few investors and intermediaries speculated on future markets. Moreover, regulatory agencies can and have imposed rules to limit the extent of speculation, for instance by regulating delivery dates, delivery locations, the timeframe for buying, certified stocks, storage fees, position limits, price limits and other factors.However, an increasing number of investors from outside the traditional markets—including banks, and pension and investment funds—have begun to speculate on agricultural futures exchanges. These large investors not only push the exploitation of price trends, but also—in contrast to the traditional intermediaries—are often not familiar with the cash market and the fundamentals. These outside speculators also often invest for reasons that have nothing to do with the cash market, for instance to protect themselves against price fluctuations on financial markets....an increasing number of investors from outside the traditional markets—including banks, and pension and investment funds—have begun to speculate on agricultural futures exchangesThis is the main reason that the US government imposed strict limits for financial speculation on commodity future exchanges. Only commercial participants with an interest in hedging were exempted. However, these rules and limits have been slowly eroded or removed. In 1991, one financial investor managed to get an official exemption from the limits in order to hedge his financial risk. In the following years, more traders were granted such exemptions or limit expansions. In 2000, the Commodity Futures Modernization Act exempted OTC trading from regulatory oversight and control. As a result of laxer oversight, other speculators joined the market, especially after the beginning of the financial crisis in 2006. These newcomers include banks such as Goldman Sachs, JP Morgan and Deutsche Bank; pension funds, such as the California State Teachers'' Retirement System; and hedge funds. A good deal of their trading is carried out through ‘swaps'', a type of OTC instrument.As these new and powerful speculators have entered the market, the total volume of new speculative investments in commodity indexes has increased more than tenfold in five years...As these new and powerful speculators have entered the market, the total volume of new speculative investments in commodity indexes has increased more than tenfold in five years: from an estimated $15 billion in 2003 to around $200 billion in 2008. ‘Index funds'', which aim to imitate the cash markets with futures, rose particularly high: between 2006 and 2008, index traders increased the demand for wheat futures from 33% to 100%. The number of daily outstanding contracts held by index traders on the Chicago Mercantile Exchange grew from approximately 30,000 in early 2004 to 220,000 in mid-2008 (US Senate PSI, 2009).The unexpected price hike in 2007–2008 has triggered a lively debate among economists about whether this increased speculation in futures has driven up cash prices. This discussion is both a theoretical debate about how futures markets work and an empirical debate about the reasons behind the price rise. The main questions are: Can speculation alone move the prices of futures and can there be excessive, that is, harmful, speculation in futures? Can futures prices influence the cash markets, and if so, how?Some claim that that the amount of trading in futures is irrelevant to the real price, because it is always a “zero-sum game” between traders (Irwin & Sanders, 2010). For every position that bets on a rising price (long position), there is a counterparty which bets on a falling price (short position). By this view, the amount of trading is detached from the price level. Indeed, it is not possible to demonstrate an unequivocal relationship between the amount of trading and the price.Yet, a large in-flow or out-flow of money can create a price shift. Statistical research has demonstrated the growing interdependence of commodity markets, both between the markets themselves and with financial markets. Tang & Xiong (2010) found that “concurrent with the rapidly growing index investment in commodities markets since the early 2000s, futures prices of different commodities in the US became increasingly correlated with each other. [...] In contrast, such commodity price co-movements were absent in China, which refutes growing commodity demands from emerging economies as the driver.”Silvennoinen & Thorp (2010) observe, “higher and more variable correlations between commodity futures and stock returns.” This trend—often called financialization—has also been observed by the United Nations Conference on Trade and Development (UNCTAD, 2009; Mayer, 2009). Similarly, an investigation by the US Senate took the view that the price of US futures had been influenced by excessive speculation (US Senate PSI, 2009).The second question, which is more relevant to consumers, remains: how can futures prices influence the cash price? Theoretically, the cash price should always converge with the futures price once the future is delivered. Some economists therefore assume that if futures are over-priced, the cash market will simply solve this problem by speculative arbitrage trading: buying something at a lower price and immediately reselling it for a higher price. Futures markets, in this view, are always driven by the cash markets, which themselves are determined by the fundamental mechanisms of supply and demand (Irwin & Sanders, 2010). However, it is logical to assume that futures markets have an influence on cash markets because, as all economists agree, they should predict the future price on the cash markets.Thus: how does speculation in futures influence prices on cash markets and how long does the effect last? Some scientists at the UN Food and Agricultural Organization were able to identify only short-term effects (Dreschler et al, 2010), but what does short-term mean? Different economists use different definitions: some define short-term as one day, others one week and some others one month. However, if the same effect leads to a one-month deviation, why should it not cause a deviation of many months? And what is the effect of a month-long deviation for people who need to buy food every day? As the famous economist John Maynard Keynes noted, in the long run we are all dead. Indeed, financial speculators cannot suspend the laws of supply and demand in the long-term, but they are able to cause short- to medium-term price increases, which, for the world at large, is bad enough.Traders are usually open about the effects of their trading. In April 2006, a hedge fund manager commented: “There is so much money going into commodity markets that it almost doesn''t matter how fundamentals behave” (WDM, 2010). At the same time, the investment bank Merill Lynch estimated that commodity prices had increased by 50% through speculation (Thornton, 2006). One of the most well-known speculators, George Soros, commented that, “Every speculation is also rooted in reality [however] speculators create the bubble that lies above everything. Their expectations, their gambling on futures help drive up prices, and their business distorts prices, which is especially true for commodities. It is like hoarding food in the midst of a famine, only to make profits on rising prices. That should not be possible” (WDM, 2010).Furthermore, if the futures price is higher than the cash price, traders on the cash market are inclined to store food in order to gain higher incomes. This is a common occurrence in hard commodity markets, such as oil or metal. However, hoarding of agricultural commodities driven by expectations of higher prices can also take place. Finally, divergent cash and futures prices, along with market volatility, cause other problems; higher costs are required for risk management and hedging, which harms the food business and ultimately affects food supply and prices (US Senate PSI, 2009).Many observers initially argued that the price spike of 2007–2008 was related to bad harvests, rising demand from importing countries—notably China—and the growing production of biofuels. A leading study by the World Bank was perhaps most influential at the time (World Bank, 2008). However, even when it became clear in early 2008 that harvests had recovered, the prices still rose. Moreover, prices on the cash and futures markets plummeted from mid-2008 onwards although demand from emerging countries remained high, even during the financial crisis. Some researchers are still not convinced that the 2007–2008 price spike was caused by speculation and continue to point to the increasing demand for biofuels, depreciation of the US dollar and the rising price of oil to explain this phenomenon (Headey & Fan, 2010).Nonetheless, criticism of financial speculations on commodity markets has been growing. In 2009, US hedge fund manager Michael W. Masters testified to the US Senate that passive investment, such as index funds, “provides no benefits to the markets while it exacts a heavy toll” (Masters, 2009). Accordingly, the US Senate and various scholars found signs of excessive and harmful speculation in US wheat markets (US Senate PSI, 2009; Lines, 2010; Gilbert, 2010). Headey & Fan (2010) reject the argument that rising demand from emerging countries could have caused the spike, writing that “low interest rates, and investment portfolio adjustments in favour of commodities” have an important role in price formation. The World Bank, in a recent working paper (Baffes & Haniotis, 2010), has also recognized the influence of financial speculators on prices: “We conjecture that index fund activity [...] played a key role during the 2008 price spike. Biofuels played some role too, but much less than initially thought. And we find no evidence that alleged stronger demand by emerging economies had any effect on world prices.” In a more recent paper by the UN Special Rapporteur on the Right to Food, Olivier de Schutter (2010) found that “a significant portion of the price increases and volatility of essential food commodities can only be explained by the emergence of a speculative bubble.”Another reason to assume that speculation is a harmful influence is that the oil-price peak of 2008 also seems to have been caused by speculation (Masters, 2009; Chevalier et al, 2010). This is not an independent explanatory variable for the price rise in agricultural commodities, but it highlights the impact of speculation.In addition to index funds, hedge funds have become increasingly important players in commodity markets. These funds, which can invest more freely than any other type of fund, often take highly speculative long and short positions to profit from rising or falling prices. Hedge funds can also move huge amounts of money. In July 2010, a single hedge fund bought almost all cocoa futures on the London commodity exchange, in an attempt to force cocoa buyers to buy from it at a monopolistic price. Afterwards, a group of cocoa processing companies called on the London International Financial Futures and Options Exchange to prevent such speculations and threatened to go to the New York commodity exchange, where tighter regulations are in force.Today, there is again a debate about whether speculation has a role in rising prices. On the one hand, harvest losses for wheat crops in July 2010 would justify a slight price rise. On the other hand, National Farmers Union representative Doug Sombke said at a US Commodity Futures Trading Commission hearing in the USA, “I think speculators have created a huge mess here for us. Farmers are feeling this today” (Reuters, 2010). Klaus Josef Lutz, CEO of BayWa, one of Europe''s biggest grain traders, commented that, “70 percent of the price rise can be blamed on speculators” (Handelsblatt, 2010). Finally, wheat is not nearly as scarce as the price rise would suggest: the global 2010 harvest is estimated to be the third largest of all time (FAO, 2010a).Higher food prices not only cause immediate problems; by reducing the available money for health care and education, they also produce negative long-term effectsTwo-thirds of developing countries are net importers of basic food commodities, even if the percentage of farmers in these countries is much higher than in industrialized countries. Furthermore, the relative household expenditure on food is much higher in developing countries: 60–80% compared with approximately 15% in the EU. This makes developing countries particularly vulnerable to price rises. They were hit hard in 2007–2008 and are again facing serious problems; the recent revolt in Tunisia being the most visible uprising sparked by food prices. Higher food prices not only cause immediate problems; by reducing the money available for health care and education, they also produce negative long-term effects.Some developing countries are commodity producers. As such, they profit, more or less, from price increases. However, their small-scale farmers are the weakest link in the production chain and profit the least from price rises. Apart from speculators, it is larger intermediaries, retailers or bigger farms that reap most of the profits (Höffler & Owour Ochieng, 2009).Growing ‘financialization'' makes it vital to reform commodity futures markets and set clear limits for speculation. Trading by financial speculators must take place on regulated and transparent commodity exchanges. The number and influence of speculators must be controlled through market and position limits. As Ann Berg, former commodity trader, stressed at a recent FAO special committee, “Over 150 years of futures trading history demonstrates that position limits are necessary in commodities of finite supply to curb excessive speculation and hoarding” (FAO, 2010b). Furthermore, some types of investment, such as index funds, could be strongly restricted. Generally, a legal demarcation between the commodities futures markets and the financial markets and a special agency to oversee it is required, such as the US Commodity Futures Trading Commission.The USA has learned its lesson from the past few years and is once again restricting financial speculation through reforms introduced in July 2010The USA has learned its lesson from the past few years and is once again restricting financial speculation through reforms introduced in July 2010. The US government aims to return OTC trading—mostly carried out as swaps—to multilateral trading and clearing platforms. Higher transparency requirements will apply and financial speculators will once again be limited by stricter position limits, without exemptions.As mentioned above, fewer agricultural commodities are traded on a large scale in the EU, but the London and Paris commodity exchanges still exert an influence. Moreover, stricter regulations in the USA could induce speculators to move their activities to European exchanges, even though there are strong position limits, at least at the Paris commodity exchange. Reforms of the financial markets in the EU are therefore necessary, and these are currently being debated. Michel Barnier, the European Commissioner for Internal Market and Services, has rightfully called speculation with food commodities a scandal. Whether his words will be followed with actions remains to be seen.In September 2010, the European Commission released draft regulations for OTC derivatives that include plans to create new trading platforms called ‘central counterparties''. The draft regulations require that OTC trades are limited and fulfil transparency requirements (EC, 2010). Along with these, two other directives will be revised: one on markets in financial instruments, such as futures, and one on market abuse. However, the EU has not yet acknowledged that commodities markets are not the same as financial markets. It is therefore not certain whether they will propose and pass appropriate regulation, which ought to include a special regulatory body, full transparency and position limits....farmers and buyers have a strong interest in managing their risks, and futures markets have proven to be an appropriate, if imperfect, mechanism...Given the problems that commodity futures markets have caused, it might be tempting to renounce them. Conversely, farmers and buyers have a strong interest in managing their risks, and futures markets have proven to be an appropriate, if imperfect, mechanism by which to do so. Other measures such as harvest assurances bring their own disadvantages. Moreover, local markets can also cause problems, as can political measures, especially when these include export bans.Nonetheless, it is prudent to explore alternatives. These could include regional or bilateral treaties between states, which have been successfully practised in several cases in Asia. The build-up of higher, more reliable reserves at the national, regional or global level is another option for dealing with volatility and uncertainty. Such reserves could also be virtual, as has been suggested by one leading agricultural researcher, Professor Joachim von Braun from Bonn University in Germany (von Braun, 2010).In the meantime, banks and hedge funds have also begun to invest in cash markets. In 2009, Goldman Sachs, Barclays and JP Morgan reportedly controlled physical commodities worth £16 billion—more than three times the amount they controlled in 2008. The head of one cocoa retail company commented on this development: “A lot of branch-alien money has poured into the market. The banks that are part of the game now are not giving us loans anymore or require much more collateral, as the markets have become more volatile. This is really grotesque” (Handelsblatt, 2010). This seems to be the next step in the ‘financialization'' of commodity markets, but the central question is whether banks should be able to buy our food or if they should get back to their initial purpose: serving the economy with credit.Food markets should serve the interests of people and not those of financial investorsFood markets should serve the interests of people and not those of financial investors. In this regard, politics has failed to protect food markets from excessive speculation. As former US President Bill Clinton said in a speech at the United Nations'' World Food Day on 16 October, 2008, “We need the World Bank, the IMF, all the big foundations, and all the governments to admit that, for 30 years, we all blew it, including me when I was President. We were wrong to believe that food was like some other product in international trade, and we all have to go back to a more responsible and sustainable form of agriculture” (Clinton, 2008).Given that hunger still exists in the world, even small price increases that are driven by financial investment are scandalous. We must not allow food to become a purely financial asset.? Open in a separate windowMarkus Henn

Science & Society Series on Food and Science

This article is part of the EMBO reports Science & Society series on ''food and science'' to highlight the role of natural and social sciences in understanding our relationship with food. We hope that the series serves a delightful menu of interesting articles for our readers.     

Micro-spatial population differentiation in activity of glycerol-3-phosphate oxidase (GPO) from mitochondria of Drosophila melanogaster

Replicate mass-bred laboratory populations of D. melanogaster were derived from females collected in the Tahbilk winery cellar and from females collected outside but from within two kilometres of the cellar. When mitochondrial extracts from larvae were assayed for specific activity of glycerol-3-phosphate oxidase the cellar populations had levels only 50% of those from the outside area, confirming an earlier report of such a difference among isofemale lines derived from these same areas. This micro-spatial differentiation occurred when larvae were raised on a medium supplemented with both sucrose (5% w/v) and ethanol (4% v/v), known to effect high GPO activity, but was not detected when the larvae were raised on unsupplemented medium.A heritable basis for larval GPO activity variation was confirmed in a set of 32 isogenic second chromosome substitution lines and measured in a subset of 4 of these lines about 25 generations later. A reciprocal cross using two isogenic substitution lines with the highest and lowest activities suggested the difference was attributable to genes acting additively and that there were no maternal or paternal effects. The detection of a collection site difference in GPO enzyme activity in the isogenic lines suggests that polymorphic variation on the second chromosome is responsible for the differentiation at the winery.Variation in adult GPO activity did not show a dependence on the winery location from where the isogenic lines were derived nor was there an effect of line. Adult GPO activity was significantly higher than that detected in larval tissues and did not show a dependence on the sugar/ethanol level in the growth medium.     

"Living cadavers" in Bangladesh: bioviolence in the human organ bazaar

The technology-driven demand for the extraction of human organs--mainly kidneys, but also liver lobes and single corneas--has created an illegal market in body parts. Based on ethnographic fieldwork, in this article I examine the body bazaar in Bangladesh: in particular, the process of selling organs and the experiences of 33 kidney sellers who are victims of this trade. The sellers' narratives reveal how wealthy buyers (both recipients and brokers) tricked Bangladeshi poor into selling their kidneys; in the end, these sellers were brutally deceived and their suffering was extreme. I therefore argue that the current practice of organ commodification is both exploitative and unethical, as organs are removed from the bodies of the poor by inflicting a novel form of bioviolence against them. This bioviolence is deliberately silenced by vested interest groups for their personal gain.     

The EU Biocidal Products Directive and the consequences for Dinsinfectants

The title of my presentation suggests or at least anticipates that the EU legislative process, to provide a harmonised regulatory platform for biocides in the EU, has been finalised when this symposium takes place.When adapted and subsequently implemented in the EU member states (estimation Q3 1999), this directive will have a major impact on the market of disinfectants for both the suppliers of active substances and formulators supplying disinfectant products to customers and consumers. This presentation will focus on (technical) regulatory consequences rather than economical or business effects.

• • scope: which products will fall under the regime of this directive, which are excluded?

• • principle: one product—one authorization and mutual recognition; lead times involved?

• • procedure: how will the simplified procedures foreseen (hopefully) help the disinfectant supplier?

• • data requirements: why do the dossier requirements for products and particularly actives need to be so excessively costly and what is the role of risk assessment?

• • transitional arrangements: what can and can't disinfectant suppliers do to keep their products on the market or to introduce new products?

• • review programme: what will happen to the availability of active substances?

The directive itself will not give sufficiient answers to all issues mentioned above to allow a harmonised interpretation across the EU. A number of technical guidance documents is therefore being developed covering Common Principles, Data Requirements and Conditions to include an Active Substance on Annex I. The workability of the whole directive will very much be dependent on the practical details to be dealt with in these documents.Disinfectant suppliers also do recognize the merits of the directive (improved protection of man and the environment, harmonisation across EU, etc.), provided however that it does not undermine the efforts of our industry to deliver better hygiene with safe, effective but also affordable disinfectants.     

World-wide use and importance of Gracilaria

The world's first source of agar, from the middle of the seventeenth century, was Gelidium from Japan, but by the beginning of the twentieth century demand for the phycocolloid exceeded of the supply of this alga. Since then Gracilaria has played an important role in the production of agar. Currently agars are obtained from five genera in three orders of red algae and marketed as ‘natural agar’ in squares or strips or as ‘industrial agar’ in powder form. The development of production processes through alkaline hydrolysis of sulphates has allowed a good quality food agar to be obtained from Gracilaria. This does not show the synergistic reaction with locust bean gum apparent with Gelidium agar. The term ‘agaroids’ is applied to Gracilaria agars produced without alkaline hydrolysis of sulphates, with greater sulphate content and much less gel strength. Unlike Gelidium, Gracilaria has to be processed in a short period of time and cannot be allowed to remain in storage for use during years of lower availability. Statistics of imports of agarophytes to Japan during the last 10 years give an indication of the state of the market. During this period there was a marked reduction in Gracilaria imports, mainly from Chile, but also the Philippines, Indonesia and South Africa, mainly due to the overall increase in the capacity of agar production in Gracilaria-producing countries.     

A Genetic Analysis of the α-Glycerophosphate Oxidase Locus in Drosophila Melanogaster

The gene for alpha-glycerophosphate oxidase, the nuclear encoded mitochondrial enzyme of the alpha-glycerophosphate cycle (alpha GP); has been mapped in Drosophila melanogaster. Several interstitial deficiencies in region 50c-53AB of chromosome 2R were used to localize the structural gene to 52D2-5. In addition, mutations of alpha GPO were generated; alpha GPO mutants are viable yet flightless. Interactions of alpha GPO with alpha-glycerophosphate dehydrogenase (alpha GPDH), the cytoplasmic enzyme of the alpha GP cycle, were investigated through the synthesis of a series of alpha GPDHnull-alpha GPOnull double mutants. Of the six double null mutants constructed, four alpha GPDH-alpha GPO double nulls are viable and flightless. Two double mutants, however, exhibit an allelic-dependent synthetic lethal phenotype.