Global Perspectives on the Food Security Crisis
Weber Shandwick experts around the world are watching the evolving food security crisis. In this report, we provide local market perspectives, trends and analysis.
“We are facing hunger on an unprecedented scale, food prices have never been higher and millions of lives and livelihoods are hanging in the balance. The war in Ukraine is supercharging a three-dimensional crisis – food, energy and finance – with devastating impacts on the world’s most vulnerable people, countries and economies.”
Secretary-General of the United Nations
What to know
The number of people facing acute food insecurity and requiring life-saving food assistance and livelihood support is growing at an alarming rate. The UN’s Food & Agriculture Organization (FAO) reported in April that 193 million people in 53 countries or territories are experiencing acute food insecurity at crisis levels. Price inflation for both food and farm imports and rising transportation costs are impacting politics around the world and worsening conditions could lead to social unrest. There is an urgency for governments, multilateral organizations and the private sector to collaborate to provide emergency food aid as well as address the root causes of the food crises.
The key drivers behind rising acute food insecurity are the war in Ukraine (and conflicts in other countries), weather extremes and economic shocks and trade disruptions created by the COVID-19 pandemic and lockdowns. The nature of the war in Ukraine – between two agricultural production powerhouses – is rippling outward. Three months into the war, exports from Ukraine have stalled, future harvests are in doubt and prices of agriculture commodities and inputs have spiked. Most exposed are countries that rely on agricultural exports from Ukraine and Russia to feed their citizens or fertilizer from Russia and Belarus to produce their own food.
The United States has one of the world’s most robust agribusiness sectors and is home to leading food companies and brands. As the largest donor of humanitarian assistance worldwide, the U.S. will play an important role in addressing global food insecurity in the months ahead.
American farmers and ranchers produce sufficient food for both domestic consumption and export – about 20 percent of all U.S. production is exported around the world. U.S. agricultural exports in 2021 were a record $177 billion. However, USDA is forecasting that rising fuel and farm input costs resulting from the conflict in Ukraine are creating uncertainty for 2022-2023 wheat and corn harvests.
Congress is considering $40 billion in Ukraine-related aid, including $5 billion for food aid. Separately, USAID is tapping humanitarian reserve funds to provide $700 million in increased funding to emergency food operations in six countries facing severe food insecurity: Ethiopia, Kenya, Somalia, Sudan, South Sudan and Yemen. The U.S. has already given the World Food Programme (WFP) more than $50 million for its Ukraine efforts.
In response to several countries already putting up food trade barriers, the United States is urging countries not to respond to rising commodity prices and fears of shortages by restricting food exports or making hoard purchases on global markets. The U.S. and Europe are working together to establish a humanitarian corridor in the Black Sea to circumvent a Russian military blockade that is threatening to hold back millions of tons of grain from the world food supply.
In addition to government aid, U.S. companies, churches and faith-based organizations are responding with millions in private donations.
Executive Vice President | Washington
Canadian Prime Minister Justin Trudeau visited Ukraine on May 8. As part of his visit, he participated in the G7 meeting and affirmed Canada’s commitment to global food security. Canada is allocating CAD $25 million of its $100 million commitment for humanitarian aid to the World Food Programme to address food security in Ukraine.
Canada’s capacity to fill the global food security gap is limited. While Agriculture Canada projects seeded wheat acreage for 2022-2023 to grow by 9 percent, environmental and economic factors present risks to crop yields. Drought conditions in the prairies and record flooding in British Columbia, along with labor shortages and increased shipping costs, led to poor yields in 2021 and a drop in Canada’s wheat reserves by 38 percent from 2020. Dry conditions are expected to continue in 2022.
Executive Vice President | Toronto
While Brazil has been among the world’s largest food producers and exporters for many decades, Brazilians have consistently faced food insecurity. According to the National Survey on Food Security, 43 million Brazilians did not have enough food and 19 million faced hunger during the COVID pandemic – a significant percentage in a country of 214 million people.
The economic crisis triggered by the pandemic increased social inequalities and poverty. While a lack of food has always been a critical issue in Brazil, in recent years, national policies for food security have lost importance as a public priority.
Nevertheless, agriculture and livestock production in Brazil remains strong and expanding each year, with around 20 percent available for export. Food security is also a critical aspect of sustainable development for Brazil and Latin America and the COVID-19 pandemic only worsened conditions. Generating jobs, supporting domestic agriculture production and amplifying social programs continue to be key measures to reduce social inequalities and combat food insecurity.
Brazil is a leading importer of fertilizers from Ukraine and Russia – and disruptions in trade, as well as price increases, could impact food production in the country.
Vice President | Sao Paulo
The European Union is focused on sustainability targets to meet global climate objectives, with agriculture and food priorities codified in the European Green Deal. However, the emerging food crisis is a top political issue across European countries. Many governments, as well as farm and food organizations, are urging adjustments in the EU’s Green Deal Farm to Fork Strategy (F2F). Some demands go so far as including a policy postponement and a reconsideration of the EU’s green ambitions, amid fears of food insecurity and rising food prices. But postponement of Green New Deal initiatives in the short-term will make it more difficult for the EU to achieve its long-term climate goals.
In April, European Commissioner and Vice President for the Green Deal, Frans Timmermans, argued that using the war and food shortages as a “pretext” to postpone the EU’s sustainable farming ambitions was “irresponsible and dishonest.” Agriculture Commissioner Janusz Wojciechowski countered that the EU needs to increase food production, saying it was “simply prudent that we support our farmers to produce more food while they can.” These two different approaches show that within the European Commission there is no clear view on the way forward.
The public is seen by many as the final arbiter. Inflation and food shortages will influence voting behavior and political preferences. There remains strong public support, particularly in affluent countries, to keep sustainability objectives on track even in difficult times. However, rising prices and decreasing food supplies might alter public sentiment. For now, it seems a safe bet the EU will follow its Green Deal Agenda. But in the wake of Europe’s largest conflict in 75 years, flexibility, prudent foresight and adjustment are the rules of the moment.
Senior Executive Director | Brussels
Middle East & North Africa
In a region besieged with perpetual conflicts, water scarcity, economic inequality and political instability, food security is increasingly important for governments across the Middle East and North Africa. Inflation surged to 14.8 percent across the region in 2021 (excluding oil rich GCC states), with higher food prices accounting for about 60 percent of the increase. In markets such as Syria, the increase is expected to rise as much as 100-200 percent this year. Lebanon and Yemen may not be far behind.
The ongoing war is causing major disruptions in regional food supplies, creating fear of food insecurity and inflation in some countries that are heavily reliant on imports, particularly low-income and war-torn countries in the region. Egypt, Lebanon and Tunisia heavily rely on wheat imports from Ukraine and Russia. Several MENA countries are looking for alternative sources for their crucial food imports, but export restrictions are making it expensive and difficult. Increasing local production is also not an option for most countries, mainly due to water scarcity and recurring droughts across the region. The countries most at risk – Lebanon, Egypt, Yemen, Iran, Libya, Syria and Sudan – each face their own issues and challenges, from crippling debt and rising inflation to internal conflict, corruption and international sanctions.
The Gulf Cooperation Council (GCC) states import nearly 85 percent of their food supplies. However, these markets are among most food-secure countries in the world because of their ability to diversify imports from international markets. Historically, GCC countries have addressed food security by acquiring arable lands in other countries and buying stakes in major food companies.
CEO | Middle East & North Africa
Africa is starting to recover from the COVID-19 pandemic, which slowed GDP growth and trade, strained government budgets and created new challenges for the continent’s food systems. Agriculture accounts for about 25 percent of Africa’s total GDP and more than half of its labor force.
Food inflation and shortages will hit Africa the hardest. Even before the war in Ukraine, several countries – including Angola, Cameroon, Kenya and Nigeria – were already struggling with soaring food prices due to climate events such as floods, landslides and droughts. The pandemic disrupted production and global supply chains. Africa relies on a significant percentage of its wheat, fertilizer and vegetable imports from Russia and Ukraine. With the war disrupting global commodity and trade flows, prices are soaring and wider food shortages are on the horizon. Many farmers do not have access to the technologies, finance and inputs necessary to increase farm productivity.
Governments, multilateral agencies and donors are now being urged to scale up economic and emergency assistance and social protection efforts. Otherwise, millions more people across the continent will experience hunger. This triad of challenges – the pandemic, war in Ukraine and climate change – will continue to influence Africa’s economic performance for the next few years. Widespread food shortages may also result in social unrest.
Managing Director | Nairobi
With 1.4 billion people, China attaches great importance to food security and self-sufficiency. China is investing in domestic grain production and modern agricultural technologies to help provide guarantees for production and to limit food imports.
Development of China’s domestic seed industry is essential to ensuring food security and reducing imports. The Government is investing in a new capacity to ensure supplies of corn and soybeans, as well as fertilizers, so farmers can expand output and increase the country’s grain reserves. China has enlarged its list of state-sponsored seed breeding and production bases. In March, the Ministry of Finance provided a 20 billion yuan package of subsidies to protect grain farmers from rising input costs. China has also unveiled a master plan for modernization of the agricultural sector and rural areas through 2025.
Food supplies remain stable and adequate in China despite ongoing COVID-19 outbreaks, economic lockdowns in major cities and continued logistics disruptions across the food ecosystem.
Executive Vice President | Shanghai
Concerns about securing a stable food supply have emerged in the aftermath of both the pandemic and war in Ukraine. Japan’s food self-sufficiency rate is less than 40 percent, making it highly dependent on imports. Ensuring stable food supply is a pillar of national security. In March, Japan provided $110 million U.S. dollars to the World Food Programme to support vulnerable people in 37 countries across Asia, the Middle East and Africa. Japan has consistently been one of WFP’s top donors and has contributed $866 million since 2016.
Japan’s ruling Liberal Democratic Party recently established a committee to discuss expanding agricultural production and reducing procurement risks, with the goal of revising and developing necessary legal systems.
Food waste is a major issue in Japan and the country wants to reduce it by 50 percent by 2030 (from 2000 levels). Consumers and businesses are being encouraged to reduce food waste as well as decrease carbon emissions in the agriculture sector.
Vice President | Tokyo
India’s large population, combined with resource constraints and concerns around climate change, makes food security a national imperative and core public policy. Agriculture, with its allied sectors, is the largest source of livelihoods in India, accounting for 70 percent of rural livelihoods. About 82 percent of farmers are smallholders.
India is the world’s largest producer of milk, pulses and jute – and ranks as the second largest producer of rice, wheat, sugarcane, groundnut, vegetables, fruit and cotton. It is also one of the leading producers of spices, fish, poultry, livestock, and plantation crops. There is an underlying dichotomy in India’s poverty and hunger coexist with large and overflowing food stocks – enough to feed the nation and contribute to exports. However, a deep agrarian crisis has been brewing for almost two decades, most recently seen through the largest farmer protests in the nation’s history.
The Indian Government is being urged to prioritize food security and expand cash transfers to vulnerable populations to minimize the impact of higher prices triggered by the war in Ukraine. Agriculture is an important means to achieve India’s Sustainable Development Goals. India has provided food aid to several regional countries, including Myanmar, Afghanistan, Lebanon, Sudan and South Sudan.
Vice President | Gurgaon
The ASEAN region’s exposure to food security is contrasted with both rich and vulnerable countries, ranging from Singapore (ranked 15 on the Economist’s Global Food Security Index) to Malaysia, Thailand, Laos, Vietnam, Indonesia, Philippines, Myanmar and Cambodia (all ranked between 30 and 90).
Long-term prospects for the region are worrying. The latest UN climate report forecasts a rise in extreme weather events across Southeast Asia, already one of the planet’s most vulnerable regions to climate change. Early this year, Malaysia – the agriculture leader in the region – experienced shortages due to unprecedented floods that destroyed vegetable production. Poverty is a permanent threat for several countries. According to the Asian Development Bank, COVID-19 pushed 4.7 million more people to poverty in 2021. Indonesia’s recent decision to suspend palm oil exports due to domestic shortages triggered by the war in Europe is already impacting global trade markets.
Rice is the major food crop produced and consumed across Asia. The UN’s Food & Agriculture Organization (FAO) warns that rice production must increase by 5 million tonnes per year to keep up with population demand, the reduction of arable land to industrial and urbanization uses – and declining freshwater resources.
Executive Vice President | Singapore
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