David Pratt on The World: Deeply worrying global food squeeze is beginning to bite down hard

No doubt there are those still thinking that there’s little to worry about over what David Beasley, executive director of the UN World Food programme (WFP), recently warned were up to 323 million people “marching towards starvation” and 49 million “knocking on famine’s door”.

But if you still think the world food crisis is just another scaremongering phrase made up by politicians or experts, then it’s time to think again.

For it’s a fair bet that just about anyone reading this can’t help but have noticed the rising cost of food staples right on their doorstep never mind its already dramatic and potentially catastrophic impact elsewhere in the world.

Put quite simply, food prices have risen to record levels around the world, fuelling poverty, hunger, and political instability – and the bad news is it’s almost certainly going to get much worse.

Since late 2020, prices for every category of food had already been on the rise. What has occurred since then has been what the WFP has called a “perfect storm” of converging circumstances.

Bring together post-pandemic demand, climate change impact, tightening food stocks, high energy prices, supply chain bottlenecks, export restrictions, and taxes and you get some idea of the factors that have been straining the food market for the past two years. But as if all this was not problem enough, along came the nail in the coffin – the Russian invasion and war in Ukraine.

Just how many of us, I wonder, could ever have imagined that the war there would have such a profound impact on world food security and further trigger the spiralling costs that now confront people across the globe.

How many of us knew that before Russia’s invasion, the two countries were, either separately or as a pair, among the top three exporters of barley, wheat, maize, rapeseed, sunflower seeds and sunflower oil.

Seeds of despair

TOGETHER they exported almost 30 per cent of the world’s wheat supply with Russia exporting 17% of global wheat while Ukraine accounted for 20% of the world’s rapeseed.

Between them, these two giant nations account for a staggering 12% of all traded food calories. Often referred to as the “breadbasket of Europe”, it is estimated that Ukraine’s produce alone feeds some 400 million people around the world. It is hard to overstate the knock-on effect such a threat to grain supplies has. In the renewable sector, for example, about 10% of all grains are used to make biofuel and 18% of vegetable oils go to biodiesel. Then there is animal feed with data from the Food and Agriculture Organisation (FAO) showing that grain accounts for 13% of cattle dry feed.

Last year alone, China imported 28 million tonnes of corn to feed its pigs, more than Ukraine exports in a year.

As The Economist magazine recently highlighted, there is currently roughly 25 million tonnes of corn and wheat, equivalent to the annual consumption of all the world’s least developed economies, trapped in Ukraine because of the war and Russia’s blockade of the Black Sea.

Another factor also contributing to the crisis is that Russia is the largest producer of fertiliser.

Even before the current sanctions were imposed on Russia, it typically exported nearly 20% of the world’s nitrogen fertilisers and, combined with its sanctioned neighbour Belarus, 40% of the world’s exported potassium.

With such supplies now unavailable to most of the world’s farmers, prices have risen by a mind-boggling 78% compared to the average this time last year.

“I’m not sure it’s possible any more to avoid a food crisis,” said World Farmers’ Organisation president Theo de Jager. “The question is how wide and deep it will be. Most importantly, farmers need peace. And peace needs farmers,” de Jager told National Geographic magazine recently.

Peace, of course, remains a distant prospect right now in Ukraine. Russia, meanwhile, still manages to sell some of its grain, despite higher costs and risks for those shipping it. But it has still not paused its grain production and continues its exports via the Black Sea and the Sea of Azov.

Russian records

RUSSIAN president Vladimir Putin, in a meeting of economic officials in Moscow, has already boasted that the country was expecting a record wheat harvest this year. Western sanctions, however, continue to impede and logjam logistics and payments, which has rendered many transactions difficult if not impossible, but still Russian supplies get out.

Ukraine, by contrast, is struggling, for not only has it already shipped much of last summer’s crop before the war began, with its vital ports blocked it has been forced to transport exports by rail over its Western border, as well as from the country’s ports on the Danube River while these were still open.

Earlier this month, Ukrainian president Volodymyr Zelenskyy voiced concern over the imminent food crisis and pleaded with international leaders to take immediate action to end the blockade of Ukrainian ports and thus allow Ukrainian wheat to get to other markets.

It goes without saying that any possibility of a real harvest this year in Ukraine – the first of the season and due to arrive in the next two months is a non-starter even if supplies of grain and other produce could be taken out of the country.

“We speak about the previous harvest. But let’s imagine that you will also have problems with the next one,” said Vladyslav Rashkovan, alternative executive director at the International Monetary Fund, speaking to Foreign Policy magazine recently. “And this will [cause] higher food prices and a shortage of food in the most low-income countries.”

For now, the Kremlin remains hell-bent on choking off Ukraine’s economy and as The Economist analysis makes clear, for any change in this situation to take place and bring relief to global markets, three countries would need to be “brought onside”.

First, Russia would need to open up Ukrainian shipping lanes. Second, Ukraine must demine the approach to the port city of Odessa. And third, Turkey needs to let naval escorts through the Bosphorus

With little chance of these things happening any time soon and the agricultural supply chain having broken down, what then of the wider impact globally and implications for the medium to long-term future?

The first thing to recognise is that all this will have a grievous effect on the poorest nations and people. Analysis shows that households in emerging economies spend 25% of their budgets on food and in sub-Saharan Africa as much as 40%. In a country like Egypt, for example, bread provides 30% of all calories.

In many importing countries, governments cannot afford subsidies to increase help to the poor, especially if they also import energy, another market facing rising costs.

Lebanon is one terrifying example of the impact Ukrainian wheat shortages will have, relying as it does on about 50% of its total supply from the country and now facing one of the world’s worst economic crises.

Last year, something like 700 million people across the world lived on the equivalent of £1.52 a day – the World Bank’s definition of extreme poverty – and any substantial rise in food prices could send countless more tumbling back into this category.

Nearly two-thirds of those 700 million people live in sub-Saharan Africa, a region even before the war in Ukraine that was already experiencing a food crisis due to the Covid-19 pandemic, climate change, and natural disasters, such as droughts, floods and landslides.

‘Hunger fallout’

THE same is true of other vulnerable countries and regions. The global humanitarian aid, relief, and development nongovernmental organisation, International Rescue Committee (IRC), has already alerted the world to an impending “hunger fallout” in which 47 million more people – mostly in the Horn of Africa, the Sahel, Afghanistan, and Yemen – could be pushed into acute hunger.

Analysts say that understanding the knock-on effects of food price shocks on conflict in many of these places is also imperative. State fragility and recurrent civil wars are costly impediments to economic development in many such nations.

Writing last week in the Financial Times, the newspaper’s Africa editor David Pilling highlighted the other inherent dangers a food crisis can bring.

“It doesn’t take a particularly paranoid leader to sense trouble ahead. Many recall the origins of the Arab Spring, which started, at least symbolically, in 2010 with the self-immolation of a Tunisian vegetable vendor,” observed Pilling. “Rising food prices in 2007 and 2008 sparked riots worldwide. The Sudanese protests that swept long-time dictator Omar al-Bashir from power in 2019 were triggered by unaffordable daily bread,” Pilling added, outlining the potential instability and other security risks that come when people cannot afford to eat.

Then there are concerns in some European nations that any humanitarian fallout and political instability might trigger another wave of migration to EU countries.

Many argue that that some governments are only compounding the food crisis problem with protectionism. Since Russia’s invasion of Ukraine, more than 20 countries have imposed restrictions on food imports covering around 17% of calories traded globally.

Such an approach, some humanitarians and economists argue, risks a domino effect of driving up prices for everyone.

Other organisations have even questioned the prevailing conditions that some insist have exacerbated the current crisis, arguing instead they have always been there and remain unaddressed.

In an article entitled “They call it a food crisis … Is it?”, Greenpeace International makes the case that the world’s “current system which is primarily controlled by a few big companies and their subsidiaries is utterly broken and needs to be fixed”.

“These companies, proclaiming themselves as the angels of food security, have sown the seeds of hunger, disease, climate change, destruction of biodiversity and suffering of Indigenous Peoples and local communities,” insists the author of the article Savio Carvalho, global campaign lead at Greenpeace International.

Response urgency

WHILE Carvalho does have a point and there are no quick fixes, the current crisis resulting from the convergence of factors including the war in Ukraine has given an added urgency to the need for a co-ordinated response.

Rolling back policies that take food off the market during times of need, increasing aid to the developing world to respond to food insecurity, is among the short-term measures.

However, emergency aid alone is not enough to end this crisis. Concerted diplomacy, donors improving longer-term funding mechanisms to get ahead of rising global hunger levels and promote resilience are now more important than ever. But ultimately it’s hard to escape the fact that Russia’s invasion of Ukraine is the main driver behind the current crisis and misery for countless people that has resulted.

“Food from the Russia perspective becomes an economic sector where it has political and economic leverage,” says analyst Tim Benton, research director for emerging risks at Chatham House. “Over the next years or so, you can imagine Russia saying, we grow lots of grain, we’ll give it to you if you support us,” Benton told Bloomberg news a few days ago.

What’s increasingly clear is that after more than 100 days of conflict, the strain of Ukraine’s curtailed grain output and Russia’s blockade is being felt more acutely than ever.

This is now a crisis that recognises few boundaries and even if the impact might vary from country to country, it’s one that is affecting us all to a greater or lesser extent. As one UK newspaper columnist observed last week, if the cost of living is a problem in Britain, for UN agencies and humanitarian relief workers around the world, the bigger worry is the cost of dying. With many experts warning that the food crisis will last through 2024 and possibly even beyond, time is now of the essence when it comes to finding solutions to this most pressing of global challenges.