This to deal with the massive exploits in all realms on all continents at this time where Lords puts food on the marketplace at max rate to protect it from deteoriating only to reclaim it when needed.
I have to say that I really don't think this problem is as massive as you say. I have three lord characters, on three separate islands: FEI, Dwilight, and EC. Not only have I not seen food squirreled away in this fashion on any of them, I haven't really seen *any* food on the market at all! (Except on EC, where Armonia is selling food, but the rates are not anywhere near the max price. And apparently they are purchased.)
Anyway, I do think it's a good idea to rot food on the market. One of the ideas put forward in one of the trading threads was that food sales brokered by a trader would be subject to less/no rot. Perhaps a three-level system could be put in place. Rot rates from lowest to highest: Brokered trades < bought by lord/steward < expired offers.
In any case, the actual mount rotted should also depend on the amount of time the offer was on the market. A deal expiring after the minimum 5 days should not rot as much as food expiring after the max of 14 days.
Perhaps this could also somehow be related to the size of the warehouse in the region.