Calculator.Wall Street wants you to believe that the recent persistent spike in food prices is nothing more than demand outstripping supply. And there’s no question that worldwide demand for food, especially grains, is up thanks to rising global meat consumption and increased biofuel production.

But the evidence is piling up that it’s actually financial speculators who are most to blame for rising prices. Futures markets were established originally to reduce price volatility, but, thanks to the involvment of speculators, the opposite scenario has taken place.

As Tom Philpott recently explained, speculators have managed to establish a selfishly beneficial cycle where their “speculative bets … push prices into the stratosphere, drawing in yet more speculative money and new price hikes.” This keeps going until poor countries are priced out of the market for food.

Meanwhile, a new study has come out directly implicating the 2008 financial crisis as the cause of this new era of commodities speculation [PDF]. It’s a simple story that requires complex analysis to prove — and is itself an offshoot of the Giant Pool of Money theory so ably explained by NPR’s This American Life. Shorter version: As the financial system collapsed, investors cast about for a new place to find decent returns. They discovered food and fuel — and Wall Street happily provided “innovative” financial products for them to play with — and the rest is history.

The good news is that Congress actually did something about it. The Dodd-Frank financial reform law instructed the Obama administration to come up with new rules to curb “excessive” speculation.

And now the agency charged with writing these rules, the Commodity Futures Trading Commission has just released its draft version. As Gretchen Morgenstern reports in The New York Times, the result is — wait for it — a giveaway to speculators. 

One economist she spoke to called the proposed rule “horrifically weak” while others observed that it “might actually encourage speculation in the commodities markets, rather than reduce it.”

Why am I not surprised?

Granted, it’s not clear how effective government curbs on speculation would be, as there has yet to be a rule that Wall Street can’t figure out how to game. But Philpott suggests that a possible answer to this problem may lie in, of all things, grain reserves. As he put it, they “could be used to effectively chase speculators out of food markets.” Here’s how:

When prices rise to levels out of whack with fundamental supply and demand, governments could simply release stored grain, driving down prices and making food affordable again to poor people.

Easy peasy lemon squeezy! And if grain reserves ring a bell, it’s because the National Farmers Union recently suggested including farmer-controlled reserves as part of the upcoming Farm Bill — once again demonstrating the power of simple ideas. And it also proves that working these kind of obscure — but achievable — policy levers rather than going for the sexier, highly improbable ones may be the only way forward for food reform.