The City needs its own Clarkson’s Farm

Jeremy Clarkson’s Farm TV series has done wonders for the standing of farmers. Farming is clearly brutally hard, even allowing for his desire to make it seem so, even when the entertainment factor is more important than the point he is making.

At the end of the most recent series, he could have done something similar for the City of London, though you can understand why he didn’t, and that’s a different show altogether anyway.

Clarkson’s point, made more than once, is that since it is impossible to know what price his grain, corn, rapeseed or beef is going to fetch from one season to the next, financial planning is nearly impossible.

It’s not. And here is where the City comes in. The derivatives market may exist primarily as a way for spiffy lads in cufflinks to make money for moving numbers around on a screen, but that’s not how it started, or it’s societal function.

Its function is to create a market for the price of corn and the rest ahead of time. The farmer and the cereal maker can agree a price for future delivery based on that market price. The food maker has certainty of delivery at an agreed price, the farmer knows what he is going to get paid and can plan for next year, decide how many cows, staff and feed he needs to stay solvent.

All of that still happens. The absurdity is that the size of the financial markets far exceeds the needs of the farmers.

The cocoa derivatives market is worth about $50 billion – no one is drinking that much hot chocolate. Which means we are back to the spivs in sleeves betting on food prices for their own enrichment, which doesn’t look great, however noble the original intent.

Jeremy Clarkson isn’t the man to do a series explaining just what the derivatives market is for — why it exists and why it frequently makes us all richer with canny maths that leads to food and mortgages being cheaper in the long run.

Someone should though. Maybe Rishi Sunak, if he’s not too busy otherwise.