The New Food Crisis Looming

Is this an Emergency Management Issue?

One of my greatest passions is teaching at the graduate level. It is less about what is written in the emergency management text and more about the discussion about what emergency management is facing today. My students will tell you that I talk about how they need to be looking outside of their communities to see how the world can impact them. The COVID Pandemic started in October of 2019 in an obscure province in China. By December, China was forecasting the problem that the rest world would be facing just a few months later. 

Emergency Managers need to pay attention to the world's issues before impacting their jurisdiction. I explored how supply chain issues affect business operations on the Business Continuity Today Show. Last week, I wrote a piece for The Emergency Management Network newsletter about the infant formula shortage and its impact on disadvantaged families and on the margins. The families that are genuinely in need of help. The conversation on the interweb discussed who should be coordinating the efforts to get food to the families in need? And should emergency management have a role to play in the current crisis? Does emergency management have a role in these types of crises? 

Photo by Kees Streefkerk on Unsplash

The New Food Crisis Looming 

The United Nations warns that the world is cusp of a food shortage this week. Historically Ukraine has been the breadbasket of Europe. In the winter of 1932-33, Communist Party activists went house sot house in the Ukrainian countryside looking for food. At least 5 million people died from starvation in the Soviet Union between 1931 and 1934—including 3.9 million Ukrainians. And, despite the contentions of certain historians of the Soviet Union, Anne Applebaum, a Pulitzer prize-winning writer from The Atlantic, writes, "The Soviet Union's disastrous decision to force peasants to give up their land and join collective farms; the eviction of "kulaks," the wealthier peasants, from their homes; the chaos that followed"—these policies were "all ultimately the responsibility of Joseph Stalin, the General Secretary of the Soviet Communist Party."

Stalin needed the farms of Ukraine to keep his empire running. Putin's Russian invasion of Ukraine resembles the tactics of Stalin's the Soviet Union. This war will have a devastating impact on the world. Why is Putin risking his nation's economic position in the world for this seamless senseless war? 

According to United Nations' Food and Agriculture Organisation (FAO), Ukraine is the fifth largest wheat exporter globally. It held a global market share of 10% between 2016-17 and 2020-21.

Additionally, the U.N. Comtrade data shows Ukraine's total cereals export in 2020 was $9.4 billion, resulting in a trade surplus of $9.2 billion in the segment. Its top countries of import in the cereal segment were China ($1.9 billion), Egypt ($1.1 billion), Indonesia ($546.7 million), and Spain ($543.2 million). 

Before Russia invaded the country, Ukraine was one of the primary providers of several staple crops to world markets, including corn, wheat, maize, and barley. Agricultural products were Ukraine's primary source of export revenue and accounted for nearly 10% of the country's GDP.

But the war and blockades of Ukrainian port cities have halted global supply chains for these food products. And the U.N.'s hunger and food security organization is warning that a food crisis beckons if that remains the case.

"In 2023, you will have a food shortage problem," David Beasley, executive director of the U.N.'s World Food Programme, said.  

Around 25 million tons of various staple grains are currently sitting in storage units in large port cities such as Odesa, waiting to be shipped to international markets, but they cannot leave Ukraine because of an ongoing Russian blockade on the Black Sea.

On a recent visit to Odesa, the president of the European Council, Charles Michel, tweeted that he saw "silos full of grain, wheat and corn ready for export. This badly needed food is stranded because of the Russian war and blockade of Black Sea ports."

On Thursday, Beasley implored Russian officials to lift the blockade at all costs to avert a global food shortage.

"If you have any heart at all for the rest of the world, regardless of how you feel about Ukraine, you need to open up those ports," he told CNN in statements directed at Russian President Vladimir Putin.

An indefinite blockade of Ukrainian ports would affect every country globally, but some are more in need of food imports than others and more at risk of a catastrophic food shortage.

Speaking at the Munich Security Conference on Friday, Beasley warned that several countries in North and East Africa and the Middle East were poised to face "tremendous food security issues" soon due to the Ukraine war. 

According to the international NGO Human Rights Watch, several countries—including Tanzania, Uganda, Sudan, and Cameroon—relied on Ukraine and Russia for at least half of their wheat imports before the war. Should food products remain stuck in Ukraine, these countries will be hit by food shortages first and hardest. 

Beasley also warned that missing food exports from Ukraine are adding to preexisting food insecurity affecting the world's more vulnerable regions this year, including the pandemic, severe weather events, and droughts hurting harvests.

Should the looming food shortage issues fail to be addressed, Beasley warned that it could lead to a "crisis on top of a crisis, a tsunami within a tsunami. And that, we can't afford right now."

Nicolas Denis, a partner in McKinsey and company. His area of expertise is in sustainable agriculture and fisheries, land use, and biotech, and he also works on topics involving biofuels, biochemicals, and bioenergy. Stated that Globally, six breadbaskets together supply roughly 60 to 70 percent of global agricultural commodities.

The Ukraine–Russia region is responsible for roughly 30 percent of global exports of wheat and 65 percent of sunflower, in a context where those markets are increasingly tight and interconnected—so a slight disruption in supply creates some impact on price.

Denis's team ran some scenarios. He stated that between 19 million and 34 million tons of export production could disappear this year. He projects that in 2023, the figure could be between ten million and 43 million tons. 

What does that mean? The number represents caloric intake for 60 million to 150 million people. If you are feeling the food price increases now? Between Q2 2020 and December 2021, the price of wheat went up 18 percent. We already had a food security issue well before the Ukraine–Russia crisis started. Now, the causes are multiple. There's increased demand overall. 

Denis stated that a majority of those commodities go into producing protein. If you have not been shopped for meat in the last few months, pork and beef are up 14% to 20% compared with a year ago.

The price of commodities will increase and affect an even broader range of the population, beyond 60 million to 150 million people projected by Denis. 

For example, countries like Egypt and Turkey significantly rely on exports from this region for the caloric intake of their citizens. In fact, Egypt relies on Ukraine and Russia for 60 percent of its imports. And while the imports are essential for its domestic consumption, Egypt also processes these commodities to export to Eastern Africa. So the impact of what's happening in Ukraine and Russia will be felt across many countries.

As far as the United States is concerned, we may not see empty shelves; however, we will see an increase in the use of food banks. Since the start of the current pandemic, food banks across the U.S. have been feeling pressure to serve their communities. 

According to news reports, About 65% of the 200 food banks in the Feeding America network reported seeing a greater demand for food assistance in 2022, with an average increase of 15% more people, according to the latest data from the nation's largest hunger-relief organization. About 30% of food banks said they had served the same number of clients.

Since December, the share of food banks experiencing increased demand has doubled. Meanwhile, consumer price inflation hit a new 40-year high in March. Rising food and gas prices accounted for much of the hike.

According to the latest federal data, the cost of food eaten at home jumped 10% over the year ending in March. Meat soared 14.8%, while milk increased 13.3%. Eggs rose 11.2%, while fresh fruits became 10.1% more expensive. Rice rose 8.6%, and bread cost 7.1% more. Food banks are buying nearly as much food as they did in 2021 but are paying 40% more for the purchases, according to Feeding America, which has more than 60,000 food pantries, meal programs, and partner agencies in its network.

However, the organization is projecting it will suffer a 20% decrease in donations from food manufacturers and a 45% drop in food provided by the federal government in the fiscal year 2022, which runs through June.

Is Food Insecurity A Crisis? 

Ultimately, food security concerns an individual's capacity to obtain and use food to ensure good health.  

However, it is essential to understand the relationship between food insecurity and the pathways which shock the system. 

Why should emergency managers be concerned about world food issues? When we expand our thinking and explore the role of Disaster Economics and the goal of having an antifragile community. We must plan for mico and macro shocks to the system. Think of the impact of the great depression and the great recession. The economic implications of personal financial issues directly affected all levels of government and the cascading financial crisis on business. 

 Businesses are only beginning to recover from the losses caused by policy decisions of the pandemic response. 

Economic shocks are transmitted from the macro level, through markets and households, to manifest themselves in individual-level food insecurity. This begs the question, do we have the policy instruments available to slow or break that transmission? 

Works Cited

Aminetzah, Daniel, and Nicolas Denis. “The rising risk of a global food crisis.” McKinsey, 19 April 2022, https://www.mckinsey.com/industries/agriculture/our-insights/the-rising-risk-of-a-global-food-crisis. Accessed 24 May 2022.

Bove, Tristan. “'It's an almost grotesque situation.' Nearly 25 million tons of grain are stuck in Ukraine, and the UN says it doesn't know when it can be accessed.” Fortune, 6 May 2022, https://fortune.com/2022/05/06/un-warns-millions-tons-grain-stuck-ukraine-food-prices/. Accessed 24 May 2022.

Farrer, Martin. “Ukraine war has stoked global food crisis that could last years, says UN.” The Guardian, 20 May 2022, https://www.theguardian.com/world/2022/may/19/ukraine-war-has-stoked-global-food-crisis-that-could-last-years-says-un. Accessed 24 May 2022.

“Lack of Grain Exports Driving Global Hunger to Famine Levels, as War in Ukraine Continues, Speakers Warn Security Council | Meetings Coverage and Press Releases.” the United Nations, 19 May 2022, https://www.un.org/press/en/2022/sc14894.doc.htm. Accessed 24 May 2022.

Luhby, Tami. “'We're in danger of running out of food.' Higher prices and demand squeeze food banks.” CNN, 4 May 2022, https://www.cnn.com/2022/05/04/politics/inflation-high-prices-food-banks/index.html. Accessed 24 May 2022.

Mann, Brian. “Russia is strangling one of Ukraine's most important ports.” NPR, 21 April 2022, https://www.npr.org/2022/04/21/1094119446/russia-is-strangling-one-of-ukraines-most-important-ports. Accessed 24 May 2022.

“Novel Coronavirus Circulated Undetected Months before First COVID-19 Cases in Wuhan, China.” UC San Diego Health, 18 March 2021, https://health.ucsd.edu/news/releases/Pages/2021-03-18-novel-coronavirus-circulated-undetected-months-before-first-covid-19-cases-in-wuhan-china.aspx. Accessed 24 May 2022.

Patrikarakos, David. “Why Stalin Starved Ukraine.” The New Republic, 21 November 2017, https://newrepublic.com/article/145953/stalin-starved-ukraine. Accessed 24 May 2022.

Stein, Jeff. “Gas prices, food shocks, war, inflation add up to economic dangers, G-7 leaders warn.” The Washington Post, 21 May 2022, https://www.washingtonpost.com/us-policy/2022/05/21/g7-slowdown-economy-stagflation/. Accessed 24 May 2022.

Trevisani, Paulo. “UN Food Official Says Millions Could Starve if Ukraine Ports Remain Blocked.” Wall Street Journal, 12 May 2022, https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-12/card/un-food-official-says-millions-could-starve-if-ukraine-ports-remain-blocked-03vJShNnpOMnu3SOrwRK?mod=djemlogistics_h. Accessed 24 May 2022.