Farm ministers from the G20 group of leading and emerging economies wrapped up their first-ever meeting this week with a call for better regulation of the global commodity markets.
French leaders in particular have blamed financial speculators for contributing to this year's rise in food prices and the unrest they have triggered in the Middle East, Africa and elsewhere.
But while experts agree commodity speculation has grown sharply in recent years, they do not agree how much blame it deserves for today's high and volatile food prices.
Woody Barth has been farming and raising cattle in North Dakota for about 30 years. He says he always looked to the commodity markets for stability. But that's changed in recent years.
"We've seen a lot of wild swings in the market," says Barth. "I mean, a day of five cents up on the corn market, 10 cents up on the wheat market, up or down, was a big day five, seven years ago, 10 years ago. But that's a quiet day nowadays."
Corn, or maize, has hit its 30-cent one-day trading limit 51 times so far this year on the major U.S. grain exchange. That's up from 36 times in all of last year.
Avoiding these wild price swings is one reason why farmers and food makers are in the commodity markets to begin with. They can set prices today for crops that are still in the ground.
That lowers the risk that weather or other factors beyond their control will push prices up or down come harvest time, says economist John Anderson with the American Farm Bureau Federation.
"There are so many things we don't know. And so, the people who are involved in these markets face tremendous risk. And the whole point of these markets is to allow a way for that risk to be transferred."
Transferred to someone who is willing to gamble on what the price of a commodity will be in the future. That is what speculators do - they take on that risk because where there is risk, there may be reward.
So a certain amount of speculation is a good thing, says Michael Masters, head of the hedge fund Masters Capital Management. "You need enough liquidity from speculators to provide grease for the wheels, if you will."
Flood of new money
But something changed in the mid-2000s. Pension funds, sovereign wealth funds and other large institutional investors began looking to commodity market speculation as a way to diversify their portfolios.
Masters says investments in commodity index funds rose from $13 billion in 2003 to about $400 billion today. He says the flood of new money is helping to push prices up.
"Prices move when new money comes into a market. So if you have a house, and one buyer shows up, you may sell it at one price. On the other hand, if you have a house and five buyers show up, you're going to sell it at another price."
Masters adds that speculators used to make up about a third of the money in commodity markets. Now they dominate many of them. He says markets today are much more volatile because there is much more money reacting to good or bad news about crop supplies.
"If there's a certain amount of speculative capital, it's going to move a certain price. But if there's 20 times that amount of speculative capital, then it's going to move much more."
Push for new regulations
France has used its position as current head of the G20 to speak out against excessive speculation.
French agriculture minister Bruno Le Maire says high and unstable food prices affect the poor the most. "Nobody can accept to have speculation on the poorest countries in the world, on the people in the world."
The French have been pushing for stricter regulations on commodity speculation in their role as head of the G20. But the negotiations faced stiff opposition -- for the simple reason that many are not convinced that speculators are to blame.
"I don't think there's a very good case at all to be made for much of a speculative impact in our grain markets right now," says economist Scott Irwin at the University of Illinois, adding that most research on the subject does not show that the mere presence of more speculators pushes prices up.
And the evidence that they are adding to volatility is not conclusive.
"There's no smoking gun that clearly points towards the kind of volatility and manipulation problems," says Irwin. "If that's not there, why do you need the new regulations to begin with?"
Irwin adds that new regulations may even push out the speculators the markets need to function smoothly.
He says there is a much simpler explanation for why prices are so high and unpredictable today: supplies of many food commodities are extremely low and demand is extremely high. With such small margins of error, any little bump will send shudders through the market. And the market has taken a lot of bumps in the past year, from drought in Russia to floods in Canada to heat waves in the United States.
"We just have had a really kind-of amazing string of just plain bad luck with weather. And it just keeps accumulating recently."
Experts say it will take at least two years of good harvests to build enough stocks to buffer prices.
In the meantime, the agreement the G20 agriculture ministers reached calls for "appropriate regulation and supervision" of commodity markets. It makes some suggestions, but provides few details. And it leaves the issue to the G20 finance ministers to work out what regulations are appropriate. A G20-appointed commission is expected to deliver its recommendations in the fall.