Global food crisis 2022

The most widespread agri-product that can be found in every household of every nation on all the continents is Wheat. From bread to pasta to flour, wheat is something on which the rich as well as poor depend. But 2022 is not showing any signs of going easy on us similar to 2020 and 2021. Due to the pandemic, the trade and logistics were already under a heavy burden and to make matters even worse we bear witness to war in Europe, understand that a war between 2 nations is not limited to the participants, it eventually strains the global economy and a global food crisis looms. 

And this prolonged war has just only started to show the damage it can bring to the global economy. Increasing inflation, and a rise in the price of food, petroleum, and precious metals, all this is only the beginning and will worsen with time.

The most urgent matter is to ensure food security; prices of rice, wheat, maize, and pulses are all on the rise. There is a global shortage of wheat which is of concern seeing that wheat is consumed in almost all households and the shortage of it causes unrest even in the developed nations much less riots and violence are guaranteed in poor countries of the African continent.

Why is Wheat production so low?

1. 
   The elephant in the room, Russia-Ukraine war.

Even though China is the largest producer of Wheat (13,.696,393 Tons), Russia is the largest wheat exporter (13.1% of total wheat export) and Ukraine 5th largest wheat exporter (8.5% of total wheat export). With Russia and Ukraine engaged in a war and Russia under sanctions by the West, this was inevitable.

2. Heatwaves

In the first week of May, South-Asia received strong heat waves, resulting in overall agricultural produce going down in comparison to last year's produce. In India, wheat output was 4.41% less when compared to the previous year even the US’s export of wheat is at the lowest level since 2015-16.

Statistically, the price of wheat at present is the highest in the past 25 years, even more than 2008’s financial crash and currently stands at $1247.25 per bushel. And the situation will only change for the worse if things continue as they are. Why? Because soon the food baskets of the world will face a new challenge i.e. Fertilizers. Russia is the largest exporter of fertilizer, with about 15.1% of the total exported fertilizer. Under sanctions Russia is unable to trade in the international market meaning the supply of fertilizer is down and with time the price will start rising and another issue will come up. Now many of you may wonder about organic farming, farmers won't be needing fertilizers and food will be more nutritious. The idea may even work but only on a small scale like local shops or restaurants but when it comes to feeding nations, organic farming has its limitations, therefore fertilizers are used to increase the yield and meet the demand of the market.

Why was India criticized by G7?

In April, PM Narendra Modi told US president Joe Biden that India can supply food grains to other countries to curb the food shortage if World Trade Organization (WTO) rules are relaxed. But climate is an external factor and is under no one's control. The next month India faced heat waves which reduced India’s total production by 4.41% but the produce was still sufficient for India to feed its own citizens and the world. 

The issue that came next made India change its plans regarding the feeding of the globe. Due to the rise in the price of wheat in the international market, private firms purchased the produce from the farmers at higher rates than what was offered by the Indian government at the minimum support price (MSP), as a result, Indian government warehouses remained empty and around 8-11 states in India receive free grains under several government programs and other states receive the grains at very nominal rates through the public distribution system (PDS). Because of this, the Indian government decided to put a ban on the export of wheat to control and stabilize the supply in its own market. But kept open the government-to-government channels to export wheat to the nations that approach India for support.

The steps taken by the Indian government were logical and well thought out because India is still exporting wheat while balancing its own demand. Any and all criticism of Indian policy is in vain, instead, these G7 nations should have focused more on the solution to the food crisis. Even China stepped forward to support India on the matter while criticizing G7 nations and their use of sanctions.

Solution

First and foremost, is to set up peace talks between Russia and Ukraine so that the global market can return to its equilibrium, and the supply gap is filled. Even if a complete ceasefire is not achieved, a few trade routes should be freed so that agri-products can be exported from war-torn country. A similar deal was offered by Russia. The Russian troops will fall back from Ukrainian ports so that the export of wheat could take place in return Russia demanded a waiver of a few sanctions. This deal was rejected by the US, which will prove to be fatal to many who are below the poverty line.

Secondly, countries like India and China which are major producers of wheat are required to take responsibility and provide for other nations, but it may not be possible knowing that a nation will always prioritize its economy and citizens before others.

Lastly, the wastage of food must be reduced, as per United Nations Environment Programme’s (UNEP) Food Waste Index report 2021 around 17% of all the food available at the household level was wasted and around 690 million had to go hungry. So producing more grains may solve the current food crisis but saving food is also important if not more.

This is my understanding of the issue. Please share with your friends and stay tuned.