Frederick Kaufman's article "How Goldman Sachs Created the Food Crisis," ignores a number of important facts about the underlying economic, social, and political factors that have driven the rise in food prices.
The assertion that Goldman Sachs introduced speculation into commodity markets is incorrect. The Commodity Research Bureau (CRB) Index has been investible since the early 1970s, and futures on the CRB Index have been traded since 1986, five years before the creation of the Goldman Sachs Commodities Index (GSCI). Gary Cohn, the president of Goldman Sachs, was not involved in the creation of the index, contrary to the article's assertion. The GSCI was purchased by Standard and Poor's in 2007 and retains a connection to Goldman Sachs in name only.
More importantly, the article does not present any credible evidence that commodity index investing is responsible for the rise in food prices. Serious inquires, such as one conducted by the OECD in the wake of the 2008 price spike, have concluded that "index funds did not cause a bubble in commodity futures prices." Rather than destabilizing futures markets, commodity index funds provide them with a stable pool of capital, improving farmers' ability to insure themselves against the risks inherent in agricultural prices. This, in turn, can allow farmers to produce more food at a lower cost. The pension and endowment funds providing this vital capital are investing the savings of individuals. They are not faceless "speculators." They represent people, often pensioners, who seek to protect the value of their savings against inflation and rising food prices.