Global hunger calls for a collective action

The world system that feeds humankind has been under stress for the past two years. It began with the coronavirus pandemic, which created food insecurity by disrupting agricultural production, supply-chains and livelihoods. The cost of critical inputs for agriculture—energy and fertilizers—rose sharply, as crude oil prices trebled between late 2020 and early 2022. The Russia-Ukraine war strangled crucial sources of supply, as these two countries contribute 28% to world wheat exports and 15% to world maize exports. Exports from Ukraine are simply not possible, as Odessa port is blockaded by Russia and mined by Ukraine, while exports from Russia are squeezed by sanctions. Climate change has accentuated the problem for wheat in 2022. Untimely rains in China, the world’s largest producer of wheat, an unprecedented heat wave in India, the world’s second largest producer of wheat, and insufficient rain in the wheat belts of the US and France, have all reduced output. Drought in the Horn of Africa has severely hurt the production of wheat and maize.

In less than six months, world prices of wheat have risen by 60%. The prospects are worrisome.

Ukraine, ravaged by war, might not be able to store what remains of the harvest to come, or plant for the next season. Russia will inevitably experience constraints. Surging prices of energy, fertilizers and pesticides will either shrink profit margins or diminish their use, reducing agricultural yields and output everywhere, particularly for poor farmers in developing countries. The spectre of a global food shortage looms large on the horizon. In a statement on 18 May, Antonio Guterres, the United Nations’ Secretary General, said that: “Global hunger levels are at a new high. In just two years, the number of severely food insecure people has doubled from 135 million to 276 million." Going further, he warned that the present situation “threatens to tip tens of millions of people over the edge into food insecurity, followed by 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 output levels, but also by alternative uses. For one, the proportion of grains used to feed animals is alarmingly high. Estimates suggest that 33% of maize produced in the US and 40% of wheat produced by the EU is eaten by cows, while an enormous amount of maize grown in and imported by China is used to feed pigs. For another, a significant, albeit smaller, proportion of grains and vegetable oils are used to make biofuels—ethanol and biodiesel—which drive cars or trucks on roads, even if the objective is to reduce pollution.

There is a deeper structural problem in the world food system. Production and exports are concentrated in 10-12 countries, while consumption and imports of food, more widely distributed, depend on population and income levels. Moreover, a relatively small proportion of world output —25% for wheat and 15% for maize—is exported. It is appropriate to focus on wheat, the most important grain for human consumption, except in Asia, where it is rice.

Eleven countries account for 70% of global wheat production: China and India (the two largest producers) for 31%, Russia and Ukraine for 15%, the US, Canada, France, Germany and Australia for 19%, Turkey and Argentina for 5%. Just ten countries account for 86% of world 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 also use wheat for animal feed and biofuels, are the exporters. Similarly, just ten countries account for 83% of world imports, but in contrast, all ten are developing countries, listed in descending order of import volumes: Indonesia, Egypt, Turkey, China, Algeria, Bangladesh, Morocco, Nigeria, Brazil and the Philippines. The regions that are dependent on wheat imports for food are North Africa, Sub-Saharan Africa and the Middle East. Most of these countries and regions are vulnerable because Russia and Ukraine provide 25%-75% of their wheat imports.

More than two-thirds of the world’s population lives in countries that are net importers of food, largely in the developing world. The poor in these countries spend at least 40%, if not more, of their income on food. For the poorest, wheat and bread also provide a significant proportion of the calories needed to keep hunger at bay. And, when there are food shortages, it is the poor who go without.

Satyajit Ray’s portrayal of the 1940s Bengal famine in Distant Thunder, or Amartya Sen’s analysis in Poverty and Famines, both show that famine deaths are attributable to paucity of income among the poor rather than food shortages. In the present global context, it will be poor countries that cannot afford to buy scarce food at high prices, and hunger will be the fate of their poor.

Global hunger is a global problem. National actions in isolation, such as export restrictions, cannot suffice. International collective action, motivated by solidarity and implemented through cooperation, is the need of the hour. If the world cannot feed its people, the consequent hunger and starvation will feed conflict by unleashing economic, social and political tensions within countries, which could spill over across national boundaries.

Deepak Nayyar is emeritus professor of economics, Jawaharlal Nehru University, New Delhi

Source; Mintepaper, 10/06/22