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Global food prices are on the rise, but avoiding export-ban panic, supporting farmers and going vegetarian could help alleviate the situation

Global food prices have been on the rise for some time, but this year they reached unprecedented heights. According to the UN World Food Programme, prices reached an all-timehigh in February and March, largely because of the Ukraine-Russia war, which has cut key exports of wheat and fertiliser. Russian President Vladimir Putin is holding the world to ransom over food by blocking Ukraine grain exports, in order to put pressure on the US and EU to lift economic sanctions on his country. 

With war, climate change and rising poverty increasingly combining to generate chronic threats to food security around the world, higher food prices may become a new normal, harming economically disadvantaged people and countries unless measures are taken. The International Panel of Experts on Sustainable Food Systems (IPES) proposes cutting emissions rapidly, reducing debt, substituting less chemical fertilisers, reshaping trade, and strengthening national grain reserves. If these things are neglected, the world will find itself "sleepwalking into the catastrophic and systematic food crises of the future", the IPES warned.

What can be done to avert a crisis in the world’s food systems? Here are some suggestions:

  1. Avoid bans on food exports

Food price increases are often not the result of reduced production, but rather of governments imposing export bans to control prices within their own countries. Such protectionist measures, affecting the global supply of goods, can exacerbate rising prices. If many countries resort to food export bans, as India did this year by prohibiting wheat exports in the wake of the early heatwave that damaged harvests, it would be far from ideal.

“If you’re in a small country, there’s almost nothing you can do about the price in the short term. … Most countries need to be thinking about the finance policy response,” says Ian Mitchell, senior policy fellow, Center for Global Development. Agricultural ministers should therefore devise strategies to assist lower- to middle-income farmers by offering financial aid rather than panicking and banning exports. High-income countries in particular have a responsibility to ensure global food access by not hoarding their own supplies.

  1. Financially support farmers

Agriculture production must increase in order to provide long-term relief from rising prices. 

Experts suggest that government interventions should support producers and increase yield where possible, avoiding commodity price fixings that would eliminate farmers' incentives to grow. However, because of the pandemic, many countries currently lack the fiscal space to provide subsidies for inputs such as fertilisers that farmers may not be able to afford.  

Research, innovation and extending farmland should be implemented by industrialised nations to transform agriculture at all levels. Africa's leaders must commit to allocating 10% of their national budgets to the farming sector. Providing small-scale farmers in developing nations with improved seeds, fertiliser, loans and other resources will boost production, raise incomes and help lowers prices. Countries like Mozambique, Malawi, Sierra Leone and Burundi have made great progress in supporting their farmers, but there is still a long way to go. A major benefit of such investments is that they not only contribute to agricultural growth, but also help reduce poverty.

  1. Promote climate-smart, high-value agriculture

Protecting harvests from climate change would help shore up the global food supply by investing in climate-smart farming, such as the pioneering of vertical farming in the United Arab Emirates.  The agricultural research system in poor countries should be improved with a focus on introducing new climate friendly-crops, using more efficient production technologies, both conventional and climate-smart; and better controlling pests and diseases. Such enhancements would aid in restarting productivity growth, which is necessary for improving farm incomes and cutting prices in the long run.

  1. Enhance data for resilient food systems

In the past, sharing real-time information about agricultural production was difficult, which made it difficult to anticipate shortages and mitigate them before they impacted food security.  However, after the recession and price hikes in 2007-2008, the 20 biggest economies created the Agricultural Market Information System (AMIS), which monitors global food supply, and the Earth Observation Global Agricultural Monitoring (GEOMAM), which monitors crop production and weather.

Food policy decisions in individual countries should be based on a monitoring system that tracks changes in global supply and demand, local production and stocks, currency movements and consumption. Such systems should also incorporate market inputs such as fertiliser, pesticides, and machinery; keeping an eye on fertiliser and machinery prices could help countries plan for agricultural growth and assist in reducing prices. The UN food agency is trying to establish such systems in many countries to help address the monitoring issue. 

Policymakers in developing nations should utilise internet of things (IoT)-linked technology and cloud computing to help meet increasing food demand in a time of climate instability. IoT devices allows the collection of real-time data on plant growth and soil conditions to maximise agricultural yield. This can contribute to pinpointing issues, such as operational inefficiencies and soil quality deficiencies, as well as developing predictive algorithms that can give alerts even before a problem occurs.

  1. Reinforce social safety nets

The recent food price spikes may have been caused by the war in Ukraine, but the pandemic has increased the underlying vulnerability of the global poor to such shocks. Over the past two years, 95 million people have been driven into poverty, according to the World Bank. High food prices make it more difficult for people, especially children, to get all the nutrition they need.

In order to reduce prices, countries should consider how they might be able to redistribute any domestic revenues they have to invest to bolster food security. Giving target subsidies on essential food items to those on low incomes and expanding social protection programmes to safeguard consumers against economic shocks are vital. Increasing social safety nets can prevent additional people from falling into poverty and malnutrition.

  1. Improve domestic food security

It is important to invest in interventions and innovations that increase staple food production in a sustainable, cost-effective way – especially in nations that rely heavily on imports.As extreme weather events increase in frequency, scientists must develop tougher plants. It is possible to increase output by crossbreeding staple crops to create new varieties with improved disease resistance and stress tolerance. Improving grain storage facilities to reduce moisture-related losses and maintain a stable temperature will also help increase domestic food security.

Another factor is that many developing countries have shifted to cultivating cash crops – which often supplant staples – as a source of income. For better returns, farmers in many parts of Africa have replaced food crops with more lucrative alternatives such as cocoa, coffee, oil palm, tree nuts and rubber. The government of Ivory Coast adopted such a policy in the 1980s to help lift small farmers out of poverty by cultivating cocoa; it can only be harvested once a year, compared to two to four times for the country’s previous staple, rice. In developing countries, there must be a practical plan that allows food and cash crops to be grown side by side without compromising food security.

  1. Plant a wider variety of corps

The importance of crop diversity can be summed up in six points: ensuring food security; adapting to climate change; reducing environmental degradation; protecting nutritional security; reducing poverty; and ensuring sustainable agriculture. Planting more types of crops can ensure a more stable food supply with greater genetic diversity in food, and help ease dependence on just a few grains whose markets are dominated by only a few exporters.

With the introduction of semi-dwarf wheat varieties, for example, yields under field conditions have increased by at least 500kg per hectare; a 25-50% increase in wheat production. Without such significant measures, the United Nations goal to end hunger and food insecurity by 2030 cannot be achieved. 

  1. Promote vegetarian diets 

Grain prices could be lowered by promoting vegetarian food (which would also have the side effect of lowering greenhouse gas emissions). Persuading people to consume less meat and dairy could boost grain supplies for human consumption dramatically, since a large portion of the world's grain is used to feed livestock. This year's worldwide cereal deficit in export markets is estimated to be 20-25 million tonnes; however, if Europeans lowered their intake of animal products by 10%, demand might be reduced by 18-19 million tonnes.

  1. Reduce market volatility 

In times of crisis, improving grain supplies and instituting regulatory measures to discourage excessive agricultural commodity speculation would help to stabilise markets. In the food commodity futures markets, excessive financial activity is a cause of price volatility. There are several possible ways to limit speculation in futures, including reinforcing regulation frameworks to limit speculation, making delivery of contracts mandatory, and requiring capital deposits on all futures transactions. Any policies related to these topics would ideally be harmonised internationally to increase the chances of success.

Written By: Olivium staff.


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