A Looming Food Crisis

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Conflict is identified as the main driver; "most of the countries in food crisis have internal conflict."
Economic downturns, including COVID-19, are a major reason most poor countries face significant challenges.
Climate change contributes via extreme events and increased variability (droughts, flooding, and variable weather).
The war in Ukraine has stopped exports from two key cereal exporters, Ukraine and Russia.
Russia halted exports of fertilizers; Russia is described as:
- "the world’s leading exporter of nitrogen,"
- "the second of potassium,"
- "and the third of phosphorus fertilizer."
Export restrictions by key exporters and other countries exacerbate the problem.

Wheat and fertilizer supply shortages have driven up prices and increased food import bills for the most vulnerable countries by more than $25 billion.
Fertilizer costs "in some cases quadrupled," creating affordability problems for farmers and affecting harvests "this year and next year."
Ukraine could reduce exports of wheat and maize by around 40 percent under current conditions; "Russia might do something similar."
Rice production has been affected for next year because of increased fertilizer costs; rice prices are "starting to rise."
Poor monsoon season is "potentially affecting rice sowing in India," posing global risks because rice is a key staple.

The disruption "putting 1.7 billion people at risk of going hungry."
FAO identifies a set of conflict countries that are highly vulnerable and net food importers: Afghanistan, Burkina Faso, Burundi, the Central African Republic, the Democratic People’s Republic of Korea, Eritrea, Ethiopia, The Gambia, Guinea, Liberia, Mali, Mozambique, Niger, Rwanda, Sierra Leone, Somalia, South Sudan, Sudan, Syria, Togo, and Yemen.
Regional distinctions:
- Northern African countries: "more than 50 percent of their wheat imports come from Russia and Ukraine."
- Sub-Saharan Africa: wheat is not the main staple; main staples include cassava and rice. Maize and wheat are used for feedstock.

By end-July, "more than 20 countries put in export restrictions."
"We have 17 percent of calories being trade-restricted."
Comparison: duration of current export restriction level is longer than in 2007–08, when trade-restricted calories were 16 percent.
Concerns that rice shortages could trigger further export restrictions.

FAO proposes a "food import financing facility," intended to be operationalized by the IMF, to support countries in conflict and other vulnerable importers.
Purpose of the facility:
- Supplement balance of payments so countries "can import what they need this year and minimize the risk of social unrest."
- Allow affected countries to "later repay the cost of the import gap."
Estimated import gap cost: "$24.6 billion."
Additional recommended actions:
- Continued support of the humanitarian response, linked to provision of inputs and cash to maintain critical production systems and supply chains (including in Ukraine).
- Help countries cover the gap in the food import bill as the first urgent step.
- Accelerate efficiency gains in production and inputs.
- Keep trade open and reduce export restrictions.
- Increase transparency of information, leveraging the Agricultural Market Information System.
- Increase efficiency in the use of fertilizers.
- Identify new hot spots of food insecurity to retarget social protection programs for greater effectiveness and efficiency.

Expand insurance mechanisms to increase farmer resilience; developed countries heavily subsidize farming insurance, which poor countries cannot afford.
Use innovative mechanisms to lower insurance costs; example cited: Mexico’s weather index insurance program, which began with a significant subsidy and moved to competition with reduced subsidies.
Improve scientific knowledge to identify "more weather-resilient seeds" so farmers can choose crops to avoid losses.

FAO’s chief economist states: "I wouldn’t say we are in a food crisis right now. I think we have a very serious food access problem."
If the war continues and exports (including fertilizers) are significantly reduced, there is risk of evolving into "a food access problem coupled with a food availability problem" and becoming "a very bad situation."
Key immediate risks:
- Reduced exports from Ukraine and Russia (around 40 percent reductions cited for Ukraine; Russia "might do something similar").
- Higher fertilizer costs leading to reduced production and next-year impacts, notably for rice.
- Export restrictions spreading and persisting at higher levels than 2007–08.

Source: A Looming Food Crisis — F&D Magazine interview with Maximo Torero Cullen, September 2022.

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