Two Peas in a Pod : Thoughts on the Future Regulation of Global Food and Finance

While the financial crisis is forcing the rethink of global regulatory structures in a number of industries, there are two that particularly need to analyze their regulations to ensure they will facilitate sustainable growth and restore consumer. confidence. These are the food and finance industries. While not immediately obvious that they should be paired, their stories are similar. Both industries have moved over the past thirty years from predominately local or national systems to ones that are highly global and integrated. They have developed disaggregated supply chains where the ultimate consumer of the risk is often disconnected from the originator of the risk. Finally, they are industries where deregulation has been the prevailing trend and the underlying assumption is that the market generally knows best. As a result of these developments, intermediaries (namely banks but also insurers,hedge funds,pension funds,sovereign wealth funds,and other institutions in the finance industry and the range of food processors, manufacturers and retailers in the food industry) have grown in size and are looked to as trusted sources to verify the safety, reliability and usefulness of the products being offered. These intermediaries are often large multinationals operating across regulatory jurisdictions. Since these companies are global in nature the regulatory structures must balance national and international regulatory norms and powers. This chapter hopes to make a modest contribution to the consideration of the future regulation of food and finance by examining the case for global food and finance and then consider specific aspects of regulation in the two industries. The conclusion will outline some broader themes, as in order to progress we need to be clear about what problems we are trying to solve