The head of the Food and Agriculture Organization of the United Nations (FAO), Qu Dongyu, has called on the G7 nations to help anticipate future food shortages as the war in Ukraine squeezes supplies, pushes prices to record highs, and threatens already vulnerable countries across Africa and Asia.
In his address to the G7 meeting, the FAO Director-General also called on governments to “refrain from imposing export restrictions, which can exacerbate food price increases and undermine trust in global markets.”
“We need to actively identify ways to make up for potential future gaps in global markets, working together to foster sustainable productivity increases,” Director-General Qu Dongyu told the G7 Agriculture Ministers meeting in Stuttgart, Germany.
In 2021, approximately 193 million people were acutely food insecure and in need of urgent assistance, up nearly 40 million people from 2020.
“In this dramatic context, we now face the war in Ukraine,” Qu said. Instead, we must “ensure that any measures taken to address the crisis do not exacerbate food insecurity and, on the contrary, increase resilience,” Qu added.
Russia and Ukraine are essential players in global commodity markets, and the uncertainty surrounding the conflict has caused price surges, particularly in wheat, maize, and oilseeds and fertilizers. These increases come on top of high prices driven by robust demand and high input costs due to the COVID-19 pandemic.
In March, the FAO Food Price Index reached its highest level (160 points) since its inception in 1990 and only dipped slightly in April.
Wheat export forecasts for both Russia and Ukraine have been revised since the start of the war. And despite other market players such as India and the European Union boosting their offers, supply remains tight, and prices will likely remain elevated in the coming months, Qu said.
Countries heavily reliant on wheat imports include Egypt and Turkey and several Sub-Saharan countries such as Congo, Eritrea, Madagascar, Namibia, Somalia, and Tanzania. Meanwhile, countries heavily dependent on fertilizers imported from Russia include essential cereal and high-value commodity-exporting countries like Argentina, Bangladesh, and Brazil.
Offering solutions
According to FAO, market transparency is crucial. That is why it welcomes every effort to strengthen and expand the Agricultural Market Information System (AMIS), an inter-agency platform designed to enhance food market transparency launched in 2011 by G20 Agriculture Ministers following the global food price hikes in 2007/08 and 2010. AMIS is hosted by FAO.
FAO has also proposed a global Food Import Financing Facility to help nations deal with rising food prices. The mechanism, which is strictly based on needs and limited to low and lower-middle-income, net food-importing countries and selected beneficiaries of the International Development Association, could benefit almost 1.8 billion people in the world’s 61 most vulnerable countries.
The facility has been designed to include smart conditionality to act as an automatic stabilizer for future funding. Eligible countries will commit to added investments in agriculture, thus reducing future import needs.
The meeting in Stuttgart was hosted by German Agriculture Minister, Cem Özdemir and saw a Guest Statement from his Ukrainian colleague, Mykola Solsky.
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