THE TERRIBLE COST OF INACTION
BY NEIL TOWNSEND
Farmers everywhere continue to do their job through whatever is thrown at them. Their resilience in striving to feed a perennially troubled world is the embodiment of compassion.
To that troubled world’s surprise, Russia invaded Ukraine on Feb. 24. While Ukrainian farmers continued to tend their crops under dangerous, adverse conditions, the war has grave implications for global food security.
Following warfare along its eastern border since 2014, the invasion of Ukraine is a disaster that has carried a terrible human cost. Ukrainians have been killed, injured and displaced on an alarming scale. While there has been much focus on Putin’s war of aggression, there has also been much concern the conflict is generating a wider food crisis with the potential for increased malnutrition and starvation inside and outside Ukraine’s borders. Besides talk, has anything concrete been done to alleviate this emerging food crisis?
The war exacerbated existing food security problems. Populations that were food-vulnerable prior to the war remain so in many cases. This includes hundreds of millions of people in Africa, Asia and elsewhere. War, drought, political instability, population growth and other factors continue to threaten the people of Congo, Eritrea, Ethiopia, Mali, Mauritania and South Sudan. In South Asia, heightened food vulnerability has been caused by income lag and rising prices in Bangladesh, India, Pakistan and Sri Lanka.
On top of these pre-existing problems, global logistics were compromised by COVID-19. Food grade shipping containers became scarce. Many countries were stretched to the limit as they battled the pandemic. Labour shortages in many Western countries and tight restrictions in China reduced the ready supply of many key consumer goods. As the global economy recovered in the second half of 2021, prices rose due to supply chain issues and outright shortages. Energy is a major component of food production, and crude oil prices were rising prior to the invasion. Post-invasion, input prices trended higher. Logistical and labour constraints that created shortages and untimely delivery before the war also grew worse. The table was set for higher food costs.
Already a tumultuous marketing year for western Canadian farmers, the war added more strain in 2021/22. A significant drought had reduced Prairie production to a multi-year low. Logistics, even with such a small crop, failed to perform. Prices increased, reaching record highs, but many crops yielded 50 per cent or less than the long-term average. Meanwhile, costs continued to increase. As farmers prepared for 2022 seeding, concerns emerged around cost and potential shortages of key fertilizers and chemicals.
In speech after speech, news story after news story, conference after conference, international organizations and political leaders in rich countries voiced concerns the war had created this unparalleled food crisis. Food is needed, prices are too high and people are starving. There is little evidence anything tangible has been done to get food to people who need it the most. Very few incremental tonnes were bought. Logistics are not maximized to move food to where it is needed. Meanwhile, high prices did their job and killed demand—including, it would seem, in already food-vulnerable areas.
As of early August, a July 22 UN-backed agreement to create a “food corridor” allowed Ukraine to export several shiploads of grain through Black Sea ports, but the shaky deal is no panacea. None of these cargoes have been delivered to the most food-vulnerable countries. In the end, the world’s rhetorical efforts to avert the ongoing food crisis largely continue to amount to just that, talk.
Neil Townsend is chief market analyst with FarmLink Marketing Solutions.