Harvests of Fear: The Emerging Global Food Crisis

Joseph Grosso

wheat

        As the Russian military’s aggression against Ukraine remains bogged down in the face of Ukrainian resistance and poor logistics, attention has turned to the invasion’s greater effects on the global economy. Given that global supply chains are still sluggish and with the specter of further COVID variants already haunting world trade, the war in Ukraine has only added stress. The price of oil, the largest commodity market in the world, reached $128 a barrel on March 8th before plummeting 30 percent this week on the hope that UAE and Saudi Arabia will increase production. Still with the U.S. cutting off imports of Russian oil (albeit Russian oil made up only 3 percent of U.S. imports, 5 percent of Russian exports) and Europe exploring ways to wean itself off Russian fossil fuels (Russian gas accounts for 40 percent of Europe’s gas consumption), prices do not seem to be in more a larger drop. The World Street Journal recently reported that the largest fracking companies in the U.S. are choosing to return more money to shareholders rather than to increase output. Many analysts see the price of oil hovering at $125 in the coming months.

Perhaps of even greater consequence is wheat. Ukraine has long been known as the ‘breadbasket’ of Europe. Its chernozem soil (known as ‘Black Earth’) is among the richest in the world. Agricultural land covers 70 percent of the country. Russia is also a major exporter, in fact the largest in the world. Together the two countries export about a third of the world’s wheat and half of is sunflower products. The International Food Policy Research Institute estimates their exports represent 12 percent of all food calories traded in the world. Since the start of the Russian assault, ports on the Black Sea have come to a virtual standstill. Ukraine is facing a fuel shortage for its tractors and trucks. While well-stored wheat can last for several months, wheat prices have hit a 14 year high.

This at a time when the global food supply is already precarious. Prices are high across the board. David Beasley, the head of the World Food Program (WFP), recently told the BBC that the number of people facing potential starvation worldwide had already risen from 80 million to 276 million in the four years prior to Russia’s invasion due to what he calls a ‘perfect storm’ of climate change, conflict, and COVID. The WFP was already facing a 30 percent price increase in the wheat it purchases due to lackluster harvests in the U.S. and Canada. The first assessment of food crops published by the U.S. Department of Agriculture since the war began projected that wheat exports from Russia and Ukraine would fall by at least 7 million metric tons this year.

Among the long list of countries that are dependent on Ukrainian wheat include some unstable characters already facing food insecurity. Lebanon gets a majority of its wheat from Ukraine and has introduced rations. Yemen normally imports 22 percent of its wheat consumption from Ukraine. Libya 43 percent. Ukraine also supplies 21 percent of Bangladesh’s wheat, 28 percent for Indonesia and Malaysia. Ukraine’s largest customer is Egypt, the world’s biggest wheat importer, which imported over 3 million metric tons in 2020. Egypt also purchases a similar amount from Russia. Russia’s other large customers include Turkey, where inflation has been spiking for months, and Kazakhstan, recently the site of an uprising against its ruling dictatorship. This dependence probably explains why 35 UN members voted not to condemn the Russian invasion.

Throughout history the price of bread has been a harbinger for unrest. Bread shortages sparked the fuse of the French Revolution. As Scott Reynolds Nelson shows in his new book Oceans of Grain: How American Wheat Remade the World, the boom in American wheat from the Great Plains after the Civil War flooded Europe with cheap imports leading to the decline of the Hapsburgs and Ottomans and the rise of Germany and Italy. The effects lasted up to World War I. Closer to our own time, the last big surge in wheat prices underpinned the Arab Spring. In 2011, Egyptian protestors called for ‘bread, freedom, and social justice’, echoing the san-culottes of Paris in the 1790s. Rioting also occurred in Haiti, South Asia, and South America.

Predictively, instability in the global market is spurring protectionist policies. Earlier this month Hungary’s agricultural minister announced that Hungary is banning grain exports. Argentina, a major grain exporter, is creating a mechanism to guarantee local supply and Turkey, a top flour exporter, is giving its agricultural ministry greater authority over exports. Bulgaria announced a similar initiative. The Russian government itself has declared a ban on grain and sugar exports to other members of the Eurasian Economic Union (Belarus, Armenia, Kazakhstan, Kyrgyzstan) until August. If the war in Ukraine drags on these measures risk driving prices up further. The World Bank estimates that by next year the average individual in Sub-Saharan Africa will spend about 35 percent of their income on food, up from just over 20 percent in 2017. The percentages for South Asia, Latin America, and the Middle East will just about double.

A sane world would rely on planning and international coordination to deal with the food crisis and not on market forces. As the world has witnessed the past two years with the COVID pandemic, whether it is with vaccines, testing kits, or masks, a reliance on the market leads to inefficiency, hoarding and shortages- particularly for the poorest people. It is obvious that in a globalized world crisis cannot be solved locally. Attempts to do so inevitably bring about poisonous, counterproductive nationalism. The effects of global warming promise to increase the number of refugees, already at an all-time high. As industrial agriculture continues to expand, worse pandemics than COVID cannot be ruled out. Ocean conservation, the continuing emergence of artificial intelligence, these all demand global management.

A majority of poor people on Earth are still not vaccinated against COVID. The same people will be the greatest victims of the approaching food crisis. The world should expect to hear from them one way or another.