A number of people have been screaming recently that speculation in food is just immoral. Futures, derivatives, options, in food commodities is evil, oppresses, starves even, the poor and should thus at least be curbed if not banned outright. Oxfam, the World Development Movement, Nicholas Sarkozy, these sorts of people are leading the charge.

The the adults at the World Bank step into the conversation.

The World Bank is taking the rare step of encouraging companies in developing countries to buy insurance in the derivatives markets against sudden changes in food prices with a deal that should allow them to hedge $4bn worth of commodities.

As they say:

Robert Zoellick, World Bank president, said on Tuesday the “agriculture price risk management” tool showed what “sensible financial engineering” could do. “Make lives better for the poor.”

He added: “We have been in a period of extraordinary volatility in food prices, which poses a real danger of irreparable harm to the most vulnerable nations.”

Food prices were “the single gravest threat” facing developing countries, he added.

Quite. What the entire speculative edifice allows is the transfer of price risk from the producer and consumer to the speculators in between. So if your concern is that the poor are damaged by food price variability (which they indeed are) then the sensible thing to do is subsidise the poor’s access to the speculative edifice so that they can transfer that risk of food price variability to the speculators.

Not, as the NGOs and the French President are doing, scweam and scweam that it’s all evil and should be banned. Why they think it’s all evil is simple enough to understand. It’s something largely done by men, in offices with money, and is therefore quite clearly immoral.

Attempting to ban the very thing which is the solution to the problem you’ve identified appears to me to be insane: but then I don’t work for an NGO. Maybe this is just par for the course for them?