The global food crisis, explained

The global food crisis, explained

The war in Ukraine threatens the world with unprecedented hunger. Even with a deal in place to get Ukraine’s food exports moving, serious weaknesses in the global food system would remain. Can anything be done to prevent future crises?

An unprecedented food crisis is engulfing the world…
…supercharged by the war in Ukraine
It’s brought rising food prices…
…malnutrition—and the potential for much, much worse
It threatens to tip tens of millions of people over the edge into mass hunger and famine
Until recently global hunger was in decline…
…but since 2014 it’s been rising
Over the past two years the number of people without regular access to food…
…has more than doubled
Some 800m people already go to bed hungry every night
And now the world’s food system has been hit with a perfect storm
2022 was already looking like a terrible year for global hunger
As covid still continues to grip some parts of the food supply chain worldwide
You had a series of bad harvests in recent years because of climate change…
…this all disrupted food production
Those two shocks—climate change and the pandemic…
…have meant that, according to one estimate, global supply of wheat…
…one of the world’s most important carbohydrates…
…has fallen for the first time in four years
And then the war happened
Ukraine’s food exports all but stopped…
…trapping around 25m tonnes of corn and wheat inside the country…
…equivalent to the annual consumption of all of the world’s least-developed economies
Ukraine’s food exports are hugely important to the global food supply
It’s a big powerhouse in terms of grain production
It’s one of the world’s bread baskets
And with that breadbasket off the market prices rocketed
Imagine if you were buying your food from Ukraine…
…and now let’s say you need to go to Canada or Australia or Argentina
…that means that you will have to pay more because of extra freight…
…and you will have to pay more in time because it will take you longer
…and you will pass these costs to the consumer
And other shocks have made the crisis worse
We are in uncharted territory…
…because not only do we have a food crisis with multiple causes…
…but also this is coming on top of an energy crisis and also a fertiliser crisis
Farms run on fuel and fertiliser
As prices of both have risen, farmers’ profit margins have been squeezed
…and if they’re forced to cut back on fertiliser…
…because it’s too expensive, or unavailable…
…their yields will fall even more—at the worst possible time
That will impact the production of major commodities for the next year
And then we are looking at availability crisis
Imagine what that would do to food prices
It’s a vicious cycle with potentially catastrophic consequences…
…and nowhere on Earth is immune
In America, rising food and energy costs have helped push inflation…
…to its highest level since 1981
Food prices in Britain are rising at a rate not seen for 13 years
And in poorer countries, things are even worse
For Souad, the food crisis has already hit home
She’s been selling khobz tabouna, a traditional Tunisian bread made with semolina…
…for the last 35 years
Now the cost of her ingredients are going up and customers are buying less…
…leaving her with less money to feed her family
Tunisia usually imports about 42% of its wheat from Ukraine…
…and relies on it for sunflower oil, another crucial commodity
With those imports gone, Tunisia has struggled to find other suppliers it can afford
Meaning shortages for people like Souad
In Tunisia, hunger is turning to anger
As food disappears from shelves…
…there’s a risk Tunisians could lose patience with their government
I’m really, really concerned about how this crisis can stoke civil unrest
In 2008, we saw riots in upwards of 40 countries
In 2011, we saw riots but also the start of the Arab spring
Today, we are looking at something which we haven’t seen before
While the Tunisian revolution in 2011 wasn’t caused by higher food prices…
…some believe it was a contributing factor
And it’s not just in Tunisia where hunger looks set to cause problems for governments
The Economist’s modelling suggests that many countries…
…could see a doubling of the number of serious outbreaks of unrest over the next year
And it wouldn’t just be anger driving this unrest…
…but a genuine fear of going hungry
Households in sub-Saharan Africa…
…already spend up to 40% of their income feeding themselves
A rise in prices means millions won’t be able to afford to eat
In many, many cases, their best day is like our worst day
Imagine if you are spending 50% of your income just on food
How much space do you have for anything else?
And then the prices of two things which really, really matter…
…meaning your food and your fuel, they go up
Governments are tapped out.
There are no safety nets
Those that do have supplies have been turning inwards
There are a number of fixes that countries are turning to
One of the unfortunate ones is protectionism
That is to say, export controls and stockpiling
Following severe heatwaves earlier this year, India banned wheat exports
In total, 23 countries now have severe restrictions on food exports
The thing is, they might be doing themselves more harm than good
Time and again, it has been proven that it doesn’t help inside the country…
…which puts the export ban…
…it doesn’t help outside the country
Export bans can make a price problem worse
Farmers may hoard their products until the ban is lifted…
…or they might even switch to another crop
That would reduce domestic supply further, and push prices up
Whilst you can sympathise with these countries that are doing this…
…the result is potentially much higher prices for everyone else
That means the challenge faced…
…by some the world’s poorest countries could grow even further
We need to help governments…
…reach their populations with affordable food, with affordable fuel, with fertiliser
And what that will require is facilities, financing facilities…
…which are accessible to these governments to do that
Providing some loans at low rates through the IMF, for example…
…so that they can afford to import and then pay back at their own pace
Of course the best way to help make food imports affordable again…
…is to get Ukraine’s exports back to the global market
International negotiations have been trying to do just that
But even with a deal in place…
…longer-term weaknesses in the world’s food system would remain
Which is why experts continue to warn about the prospects…
…for a world that remains too dependent on too few countries for its food
Less than ten countries count for around 90% of our exports…
…for key commodities like wheat, like corn, like rice, like soyabean
So when there’s a shock in any one of these countries, whether it be climate…
…whether it be conflict, you see the consequences of that across the world
Some countries are trying to insulate themselves from these shocks…
…by becoming more self-sufficient
It’s an attractive idea…
…and this year the World Bank announced that it’s making $30bn available…
…to help countries become more food secure
But it’s only part of the answer to avoiding another crisis
The reality is that it’s just too economically unfeasible to be self-sufficient
Most countries will always need to import some food
And as the climate crisis worsens…
…global food shocks are set to become ever more frequent—
…and harder to predict
So it makes sense not to put all of your eggs in one basket
If you are a country which relies on imports…
…make sure that [your] import base is not so small, that it is diversified
So if one country stops, somebody else can jump in
Where is our insurance for something as basic as national food security?
The world is already starting to understand the true cost of volatile prices
Absolute levels of global hunger in 2022 could be the highest ever
But without making some fundamental changes to how the world’s food is supplied…
…the next crisis could be even more deadly
What’s at stake is the whole global order
Insufficient nourishment for millions upon millions of people
This is not only about today.
This is also about tomorrow
It is our collective problem
Thank you very much for watching…
…and if you want to learn more about the global food crisis…

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