The UN recently reported that more than 1.2 billion people worldwide are undernourished. This number is staggering by itself, but what makes it even more appalling is the fact that, last year, enough food was produced on our planet to feed humanity nearly twice over. If we have so much food, how is it that 30 children will die of hunger or a related cause by the time you finish reading this column?

Policy makers pay a huge amount of attention to food production issues, and when the media covers hunger, it tends to focus on food scarcity. Indeed, an important solution to this problem is to ensure that farmers in the developing world get the resources, technology and training in methods of sustainable agriculture they need in order to grow their own food on their own land.

But ultimately, by focusing exclusively on the production of food, we miss one of the most critical root causes of food insecurity: the over-commoditization of our global food supply. By treating food exclusively as a paper commodity that can be speculated on for profit, the developed world has put an adequate diet out of reach for approximately one out of every six people.

Over the past three decades, there has been a dramatic scaleback of regulation on the exchanges where large quantities of grains and other food staples are bought and sold. This has led to an influx of participation by speculators who have no intention of actually taking possession of the food. They are simply in the game for profit, bidding up unlimited quantities of agricultural output in the form of futures contracts, hoarding product until the last possible second and then abruptly cashing out.

For decades, the futures market for agricultural commodities served a useful, stabilizing purpose. The tightly-regulated exchanges allowed farmers and wholesalers to sell their future output to processors, at a locked-in price, months before harvest. These contracts insulated the entire agricultural sector from dramatic and sudden pricing shifts caused by external factors, such as weather or the cost of fuel. There was little, if any, Wall Street participation.

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