Not exactly. It is too early for unqualified optimism, as many of the problems that fueled food inflation even before the invasion of Ukraine persist: energy and agrochemical prices remain high, making food expensive. operating mechanized farms and moving food through the supply chain. Scorching weather and drought are decimating crop yields from Waterloo, Canada to Bangalore and Bordeaux, and weather disruptions are expected to become more varied and extreme.
It’s not too early, however, to appreciate what we’ve learned over the past five months about one of the biggest food supply disruptions the world has seen in decades. Russia’s invasion of Ukraine has forced food producers, distributors and global relief programs to adapt quickly to overcome shortages – and they have done so, by and large, with great agility. . This response provided insight into how food producers, investors and policy makers can address the issues ahead.
Here are three key lessons from the Russian-Ukrainian war on how to secure the future of a global food company:
When grain supplies from Russia and Ukraine – which together produce a quarter of the world’s wheat – were suddenly cut, farmers in major producing countries sprang into action. Tight supplies and rising wheat prices encouraged farmers of other annual crops like soybeans and corn to turn to wheat – and plant it, they did, from the US Midwest and Brazil to Australia and Japan, replenishing war-depleted reserves.
We have also learned the importance of keeping large reserves of grain from previous harvests, which have been tapped in almost all major producing countries to fill the immediate gap left by Russia and Ukraine. These reserves must now be fully replenished, and in the meantime we can recognize and appreciate the effectiveness of a double whammy strategy of maintaining strong reserves while planting new acreage.
The supply of perishable fruits and vegetables is much less resilient.
The last six months have highlighted the differences between the raw materials market, which can rely on stored products, and the fresh produce markets. Nutrient-dense perishable crops, including fruits, vegetables, meat and dairy products, are more vulnerable to climatic pressures, require more specific growing and production conditions, and are more difficult to produce and distribute spontaneously. case of supply disruption. Long-term storage facilities for fresh food are extremely energy and resource intensive.
The disruptions in Ukraine remind us how important it will be for every wealthy nation to increase local and regional supplies of fresh fruits and vegetables. In some areas, this may need to include networks of high-yielding greenhouses and vertical farms that can grow these nutritious foods year-round in facilities protected from environmental hazards. Encouraging new efforts for cell culture meat — grown in the lab — should be a key part of that plan. These investments will be costly in the short term, but increasingly prudent as the agriculture industry adapts to the realities of climate change.
Those who have the least will suffer the most and we owe them our support.
Hunger is on the rise around the world, alongside geopolitical and environmental tensions, and disruptions in food production around the world are hitting food-insecure countries the hardest. Three hundred million people lack reliable food supplies and 45 million are on the brink of starvation. Famine-stricken countries like Yemen have suffered the most from disruptions to Ukrainian food exports, along with food-insecure Egypt, Turkey and Bangladesh, which typically import billions of dollars of Ukrainian wheat each year. .
Rich countries must resolve to save more of their cereal stocks for the most vulnerable populations, while allocating more funds to international food aid. In recent months, those funds have been so scarce that the Biden administration has opted to spend all of its funding from the U.S. Agency for International Development in famine-stricken areas. USAID Director Samantha Power has just committed an additional $1.2 billion to fight famine, but that money will run out quickly.
However nimble farmers in rich countries are, severe famine will continue to spread and worsen in years to come, both as a result of human conflict and climate change. Food security must be part of all major international trade and economic agreements between the Group of 10 industrialized countries. The focus of this collaborative effort should go beyond emergency relief to include substantial investments in a paradigm shift towards sustainable agriculture.
The damage and destruction caused by Russia’s invasion of Ukraine has provided important insights into the future of agriculture in a world of growing environmental and geopolitical instability. Learning these lessons and acting on them will give us a chance to better prepare for the inevitable disruptions to come.
More other writers at Bloomberg Opinion:
If food prices are falling, why the hunger crisis? : David Fickling
The Hunger Games in Russia: elements of Clara Ferreira Marques
Putin’s war set to change the way the world farms: editorial
This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.
Amanda Little is a Bloomberg Opinion columnist covering agriculture and climate. She’s a professor of journalism and science writing at Vanderbilt University and author of “The Fate of Food: What We’ll Eat in a Bigger, Hotter, Smarter World.”
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