Opinion

Hunger and crisis

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Unfortunately, geopolitics is usually linked to bad news. In fact, it is usually in troubled times that geopolitics tends to come to the fore, precisely as in these times we are living through. We are facing a full-blown geopolitical storm. After years of pandemic came economic crisis, inflation and then war. We are truly in the midst of a storm that could well sweep away much of the fleet that makes up our international institutions. We are indeed facing a key moment, a global paradigm shift that will be accentuated by these crises already mentioned. But there is perhaps no crisis of greater importance than the one looming over the global food supply. We are facing a veritable perfect storm in which various scenarios have come together to wipe out much of the planet's food production capacity in one fell swoop.  crisis alimentaria guerra rusia ucrania

In the coming months we will see how the economic effects of this combination of crises will lead to a terrible humanitarian crisis caused by widespread famine in the most fragile countries. This will also lead to episodes of upheaval and social disorder that will result in a reconfiguration of the political systems in many of these places, causing new migratory flows of people seeking to flee these misfortunes and seek refuge in those countries that are more resilient to these developments.

This is not a thing of the future. These crises are already here. To make matters worse, the war in Ukraine has accelerated events, and we can already glimpse a dark horizon. This is reflected in the emergency measures being taken by the various global powers to protect themselves from the possible consequences of these developments. Today, 23 countries have already introduced some kind of ban on food exports. In addition, more than a few countries have begun to implement export controls on fertiliser exports, a key development that is aggravating this supply crisis, sending us into a vicious circle, into a spiral of ever-increasing price rises, the outcome of which will only be a more violent and unstable world.

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But how did we get here? The key lies in the different geographical realities that result in unequal global food production capacities. Today, just 10 countries produce 90% of the critical food commodities on which we all depend. A reality, moreover, made worse by the action, at best irresponsible, of many of the political leaders who govern us.

Let us begin, then, with the straw that broke the camel's back. In February this year, Vladimir Putin ordered his troops to invade Ukraine in what he hoped would be a lightning subjugation operation. This decision would in itself have serious consequences for a global economy that was beginning to feel the effects of an incipient crisis, to which the ravages of the pandemic had to be added. 

vladimir putin

In addition to the inflation we had been experiencing, there was the increase in fuel prices, which had three logical consequences for food prices. First, the transport of foodstuffs became more expensive overnight, thus increasing the final price to consumers. Second, food exports from Russia and Ukraine came to a standstill, removing from the market a significant share of grain destined mainly for markets in the Middle East and Africa. Third, there was an increase in the price of natural gas, which is key to the manufacture of synthetic fertilisers.

Although all these developments had an immediate effect on the prices of these commodities, we have not yet seen their real effect on prices, as prices are still being calculated on the basis of the previous year's harvest and existing stocks. It will not be for some months before we realise the real problem that many places are already suffering.

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One such place is Sri Lanka. The Asian country is perhaps the first to experience the full consequences of the combination of these geopolitical crises, and has already declared itself bankrupt. The country has run out of gas for electricity, petrol for transport, paper for schools and food for a large majority of its 22 million people. The price of tea has risen by 400%, rice by 890% and gas by 190%. This dramatic story is all the more serious when we consider the role played by its leaders in the affair.

The reality is that Sri Lanka was already in the grip of an unmanageable foreign debt to China, compounded by the ravages of years of pandemic and a series of terrorist attacks that caused the tourism industry (10% of the country's GDP) to collapse. This in turn caused the country's foreign currency reserves (mainly dollars) to vanish, making the supply of gas and oil difficult, with the expected and consequent worsening of the economy, accompanied by a sharp devaluation of its currency that would make it even more difficult to buy these raw materials. This situation would not be so serious if the country were not experiencing a real food tragedy, a tragedy that could have been avoided. The country has run out of food, at a time when it is unable to buy from international markets due to the economic crisis and rising global prices. How - the reader may ask - could a country with fertile land and a tropical climate reach this point? How is it possible that Sri Lanka could run out of food?

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Well, Rajapaksa's main election promise was to ban the use of synthetic fertilisers in order to turn the Asian country into a 100% organic food producer. The consequences of this decision were catastrophic. From one year to the next, the country's food production plummeted by 50%. The country ran out of its own production while losing the ability to buy food from the markets. The result is an unprecedented humanitarian crisis in Sri Lanka.

Fertilisers enabled the tremendous global population expansion of the last century. Quite simply, without fertilisers there is no capacity to feed 8 billion people. With this in mind, the recent decision by the Canadian government led by Justin Trudeau to cut the use of nitrogen-based fertilisers by 30% is little short of adding fuel to the fire of the global food crisis. The decision is made on the basis of reducing greenhouse gas emissions into the atmosphere and, while the dangers of climate change are real and obvious, solutions to this problem cannot be found by condemning millions of people to starvation.

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Canada is a major player on the global agricultural chessboard, with a population of just over 38 million people, the country has some of the best farmland in the world, particularly for grain. The country exports 8% of the world's wheat, as well as 10% of its barley. In a context where a significant part of the grain supply is already in question, a reduction in Canadian production will have only one possible outcome, namely a further fall in the global food supply and a consequent rise in prices to even higher levels.

On the other hand, in addition to this reduction in the use of fertilisers due to political decisions, we must add another element that is making access to these products more difficult in the world. Fertiliser-producing countries have limited, or banned, the export of fertilisers in order to ensure domestic supply due to a very high increase in fertiliser prices on international markets. Already in 2021, the prices of the main fertilisers rose by 80%. The various energy crises in China resulted in a drop in fertiliser production, as well as in many fertiliser components such as ammonia. This year the reality is getting worse and worse. Russia is, or rather was, one of the main exporters of fertilisers, as well as a major player in the gas market (key in the manufacturing processes of synthetic fertilisers).

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In this context, it is not surprising that governments around the world are beginning to take note of the situation. Both members of the G7 and the G20, as well as the European Union and the United Nations, have begun to worry and to try, at the very least, to call for a halt to the dynamic of export bans that seems to be becoming more popular among the main players on the international scene.

Already earlier this year, months before Putin's war, another dictator seemed to be preparing for major disruptions of the global food market. In January Xi Jinping brought together Communist Party leaders for a high-level meeting. On the agenda was a single topic: the food security of the People's Republic of China. During the previous year, Beijing had banned the export of fertilisers abroad, fearing that the price hikes they had been experiencing would continue in 2022. Given that 25% of the world's fertilisers are manufactured in China, we should expect a continued rise in fertiliser prices. But China also has the largest food reserves in the world today. Specifically, the Asian country has almost 70% of the world's maize reserves, 60% of the world's rice and 50% of the world's wheat. It would seem, at first glance at least, that Beijing has its back well covered in the face of the pressing food crisis. However, it is rumoured in geopolitical circles that these reserves could be largely depleted, which would be the basis for concern within the party, which would be worried if the energy, health and even social crises it has been experiencing in recent years were to be compounded by a lack of food. 

crisis alimentaria guerra rusia ucrania

Even if China had all these reserves, the reality is that the country's domestic food production is not enough to feed its entire population. Beijing still imports vast quantities of food, and is absolutely dependent on fertiliser to squeeze as much as possible out of the least productive land.

And therein lies the crux of the matter. The lower the food supply, the higher the price. The higher the price, the less access to food. The higher the price of gas, the higher the price of fertiliser and therefore the less land planted. All indications are that next year's harvest will expose a massive drop in global food production. If true, the price hikes experienced so far will only be the beginning.

We are truly facing a much bigger crisis than many expect. Self-sufficiency is not a reality for such a populous world. Most countries in the world will find it difficult to access the most basic raw materials. The Sri Lankan example could well be repeated in much of the developing world. Already countries such as Egypt and Tunisia are finding it very difficult to find grain at affordable prices to feed their entire populations. Moreover, in sub-Saharan African countries, the proportion of household income spent on food can be as high as 40%. A rise in food prices will therefore always be felt most in the most disadvantaged places. While elsewhere we may believe that we can weather the storm, the reality is that the effects of food shortages in the Middle East, Asia and Africa will affect us all. The Sri Lankan government will not be the only one to fall and we will face new international scenarios for which we are not prepared.

crisis alimentaria guerra rusia ucrania

In addition to this humanitarian crisis, which would certainly be manageable if we were in a different situation, the world will at the same time enter a major economic recession. Stagflation, the global energy crisis, and the decline of industrial capacity in many countries will aggravate an already dire situation that will not be limited to one geographical area of the planet, but will be global.

The outlook does not look good. As we have said before, however, not all countries have the same geographical conditions, and many would have the capacity to take actions that could alleviate the situation. The first and most obvious decision would be the implementation of the famous Ukraine-Russia agreement to release the nearly 20 million tonnes of Ukrainian wheat stuck in Putin's war. The second would be the implementation of agricultural policies in key countries that, given their geographical characteristics, could increase production. Basically the opposite of what Trudeau is doing in Canada. Moreover, countries such as Spain, France, Romania, Bulgaria, Argentina and the United States would be in a position to lend a hand if, in some places such as our country, leaders were to apply more coherent agricultural policies.

Borja de Arístegui is Professor of International Relations