The food price crisis of 2007-2008, Covid-19, the Russia-Ukraine War, and climate change have exposed the fragility of food systems. The greatest risk lies in refusing to learn from lessons of the past.
At the start of 2022, we were already facing the prospect of a food crisis. Even before the first Russian tank rolled across Ukraine’s borders on February 24, food prices had tipped record highs as the world struggled to recover from Covid-19 to repair disrupted supply chains and soaring fuel and gas prices.
But a conflict involving two of the world’s largest wheat exporters, and major producers of fertiliser, maize and vegetable oil, have inevitably driven prices even higher and, once again, pushed the issue of global food security into sharp focus.
Russia and Ukraine account for roughly 30 percent of the world’s wheat and barley exports and almost 80 per cent of sunflower oil exports. Most of their wheat production is imported by countries in the Middle East and Africa, with some 50 countries depending on Russia and Ukraine. Warfare, port blockades and international sanctions have reduced these exports, and supply uncertainties have already pushed wheat prices to around $11 per bushel, a level last seen in 2008.
The situation is further compounded by rising energy prices, and disruptions to the supply of fertilisers, the prices of which are already fluctuating at levels unseen since the global financial crisis because of higher gas prices. Russia and Belarus produce more than a third of global potash.
Russia is also the world’s biggest exporter of fertilisers and the war with Ukraine has disrupted the export of fertilisers and driven up prices for natural gas, which is an important ingredient of nitrogen-based fertilisers.
Fertiliser prices (DAP) are surging towards $1000 per tonne, with a significant increase in the last six months, and a 40 percent jump since the invasion. This will hurt rich and poor farmers alike, due to the clear link between rising costs and reduced production.
The US-based Centre for Global Development estimates that higher food and fuel prices will push 40 million more people into extreme poverty. Lower income households, who were already spending between 60 and 80 per cent of their earnings on food, face stark choices, including how many meals to eat in a day.
The food crisis of 2007-8 suggests important lessons for us to mitigate a food crisis this year.
First, remember that cooperation between countries matters, sending important signals to markets that governments and the private sector take the problem seriously.
Second, take concerted action to trade more, easier, faster. Allow food to be traded and attack non-tariff barriers that are the most serious limitations to trade. Africa has shown leadership in the creation of the African Continental Free Trade Area – these principles must be fast tracked to allow as friction-free trading system as possible.
Third, governments and development partners should urgently plan for the social and humanitarian consequences of a food crisis. Social safety nets should be strengthened at least temporarily, and humanitarian aid planned for the most vulnerable.
Last and perhaps most importantly, governments and partners must go back to basics: that African economies and livelihoods are built on agriculture. More than 70 per cent of the population is involved in farming, but the vast majority of these are smallholdings with significant exposure to environmental and economic shocks.
These farmers and their contributions can be transformed by shorter value chains that share some of the value with farmers, a digital revolution that puts farmers, and strong government agenda and support.
Agnes Kalibata is the president of the Alliance for a Green Revolution in Africa