The world system that feeds mankind has been under stress for the past two years. It started with the coronavirus pandemic, which created food insecurity by disrupting agricultural production, supply-chains and livelihoods. The cost of critical inputs for agri-energy and fertilizers rose sharply, as crude oil prices tripled between the end of 2020 and the beginning of 2022. The Russo-Ukraine War strangled important sources of supply, as these two countries contribute 28% to world wheat exports and 15% to world corn exports. Exports from Ukraine are not possible, as the port of Odessa is blocked by Russia and mined by Ukraine, while exports from Russia are squeezed by sanctions. Climate change has exacerbated the problem for wheat in 2022. Unseasonal rains in China, the world’s largest wheat producer, an unprecedented heat wave in India, the world’s second largest wheat producer, and insufficient rain in wheat fields in the US and France have all reduced production. Drought in the Horn of Africa has severely affected wheat and maize production.
In less than six months, worldwide wheat prices have increased by 60%. The prospects are worrying.
Ukraine, ravaged by war, may not be able to store the remains of an upcoming crop, or plant it for the next season. Russia will inevitably experience obstacles. Rising prices of energy, fertilizers and pesticides will either reduce profit margins or reduce their use, reducing agricultural yields and production everywhere, especially for poor farmers in developing countries. The ghost of a global food shortage looms large on the horizon. On 18 May, UN Secretary-General Antonio Guterres said in a statement that: “Global hunger levels are at a new high. In just two years, the number of people who are severely food insecure has increased from 135 million to 276 million. ” Going forward, he warned that the current situation “threatens to put millions of people on the brink of food insecurity, and then malnutrition.” , mass hunger and famine, in a crisis that could last for years.”
The availability of food grains for human consumption is constrained not only by production levels but also by alternative uses. One is that the proportion of grain used to feed the animals is dangerously high. Estimates suggest that 33% of the corn produced in the US and 40% of the wheat produced by the European Union is consumed by cows, while a significant amount of corn grown and imported in China is used to feed pigs. For another, a significant, though small, proportion of grain and vegetable oils are used to make biofuels – ethanol and biodiesel – that drive cars or trucks on the roads, even if it aims to reduce pollution. .
The world food system has a deep structural problem. Production and exports are concentrated in 10–12 countries, while food consumption and imports, more widely distributed, depend on population and income levels. In addition, a relatively small proportion of world production – 25% for wheat and 15% for maize – is exported. Except in Asia, where it is rice, it is worth paying attention to wheat, which is the most important cereal for human consumption.
Eleven countries account for 70% of global wheat production: China and India (the two largest producers) account for 31%, Russia and Ukraine 15%, the US, Canada, France, Germany and Australia for 19%, Turkey and Argentina for 5%. Only ten countries account for 86% of the world’s wheat exports: the US, Canada, France, Australia, Germany and Poland for 50%, Russia and Ukraine for 28%, Argentina and Kazakhstan for 8%. Essentially, rich countries, which use wheat for animal feed and biofuel, are exporters. Similarly, only ten countries account for 83% of world imports, but in contrast, all ten are developing countries, listed in descending order of import volume: Indonesia, Egypt, Turkey, China, Algeria, Bangladesh, Morocco, Nigeria, Brazil and the Philippines. The regions dependent on wheat imports for food are North Africa, Sub-Saharan Africa and the Middle East. Most of these countries and regions are vulnerable as Russia and Ukraine provide 25%-75% of their wheat imports.
More than two-thirds of the world’s population lives in countries that are largely net importers of food to developing countries. The poor in these countries spend at least 40%, if not more, of their income on food. For the poorest people, wheat and bread also provide a significant proportion of the calories needed to keep hunger at bay. And, when there is a shortage of food, only the poor go out.
Satyajit Ray’s portrayal of the Bengal famine of 1940 in Distant Thunder, or Amartya Sen’s analysis of poverty and famine, both suggest that famine deaths are due to lack of income among the poor rather than a lack of food. In the current global context, it will be poor countries that cannot afford scarce food at high prices, and hunger will be the fate of their poor.
Global hunger is a global problem. Individual national actions, such as export embargoes, may not be enough. International collective action driven by solidarity and implemented through cooperation is the need of the hour. If the world cannot feed its people, the resulting hunger and starvation will fuel conflict within countries, leading to economic, social and political tensions, which can spread across national borders.
Deepak Nayar is Emeritus Professor of Economics at Jawaharlal Nehru University, New Delhi