26.03.2022
Bread for the world
Dear reader,
The war in Ukraine is a humanitarian disaster. It is causing terrible suffering in the region. However, ‘Ukraine has only compounded a catastrophe on top of a catastrophe.’ says David M. Beasley, Executive Director of the United Nations World Food Programme. It is estimated that almost 400 million people are reliant on food exports from Russia and Ukraine. Our system of food production is the lifeblood of our globalized society. Any disruption to the stable flow of food across regions and borders could have disastrous repercussions for humanity. COVID and climate change have already put pressure on the system of food production and the most vulnerable people have been worst affected. A food crisis is looming: ‘Hunger rates are rising significantly globally, and one of the largest drivers of hunger is man-made conflict’, Steve Taravella from the World Food Programme tells news portal Vox. The conflict will have a devastating effect around the world.
The potential consequences of the war were outlined by the ‘International Food Policy Research Institute’ in the early days of the conflict. Since then, many texts have been published warning of threats to global food security.An excellent background to this was also provided by the experts at the FAO, the Food and Agriculture Organization of the United Nations. And a New York Times headline states: ‘Ukraine War Threatens to Cause a Global Food Crisis.’
Khmaes Ammani, a Tunisian day labourer, summarises the situation in the English Guardian: ‘We need bread’. There is growing fear in the Middle East and in North Africa that the war in Ukraine is pushing up the price of basic food items. While prices are controlled by the state in many places, governments cannot simply ignore the market prices. Poor people are still going to feel the impact of price increases. If there is not enough money in the household, there is a risk of going hungry. Higher food prices could affect millions of people directly.
This is critical, especially when it comes to poorer countries, writes Tages-Anzeiger. And Süddeutsche Zeitung seconds this: ‘Hunger will increase.’ Countries such as Bangladesh, Sudan, Pakistan, Lebanon, Syria and Egypt will be hit particularly hard. The population is already starving in Afghanistan, where the UN World Food Programme is distributing food, according to a recent report on Heute Morgen on SRF radio. The Horn of Africa is being ravaged by one of the worst droughts in recent history. About 10 million people in Ethiopia and Somalia – including large numbers of women, children and elderly people – are facing an existential threat caused by severe food shortages. All in all, wheat in the form of bread is a vital source of energy for the poorest people. It is healthy and able to provide much needed minerals and vitamins. Above all, it stands out as an abundant source of vitamin B and also provides vitamin E, potassium, calcium and magnesium. ‘Do not underestimate the significance of wheat’, Corinne Fleischer, Director of the UN World Food Programme for the Middle East told the NZZ.
The question for Bayer CEO, Werner Baumann, is not whether there will be a food crisis but how bad it will be. ‘We are already in the midst of a grain shortage,’ he emphasises to the NZZ. In fact, the situation was already precarious before the war started. Supply chain issues during the pandemic, drought in North Africa, Brazil and Canada and floods in China have all affected crop yields.
2021 was also a bad year for grain in Switzerland. The poor harvests were caused by wet weather. There was also a proliferation of fungal diseases. This resulted in 30% less grain for making bread than normal. For this reason, industry organisation Swiss Granum is now calling for more import quotas. This comes at the exact moment when there is a grain shortage worldwide. The President of the Farmer’s Association, Markus Ritter, is demanding increased domestic production – at the very least, out of solidarity with poorer countries. The war in Ukraine is forcing us all to look at the bigger picture. But, clearly, the federal government has not yet got this far, as their answers to parliamentary questions in the spring session demonstrate.
All things considered, a perfect storm is looming in terms of food supply. Exports from Ukraine and Russia are essential in supplying food worldwide. Global market data for the global wheat trade is represented in graphics by the Observatory of Economic Complexity (OEC). The dependencies are evident. The region surrounding the Black Sea is a central hub for the global supply of grain and sunflower oil. A great deal is reliant on the agricultural production of Russia and Ukraine. The two countries account for 29% of global wheat exports, 19% of global corn exports and 80% of global sunflower oil exports. Russia is also the world’s biggest producer of fertilisers. The country is the primary producer of commercial nitrogen, phosphorus and potash fertilisers. Producing fertilisers requires a great deal of energy and, with rising energy prices, the cost has sky-rocketed. Massive increases in energy prices are also having an effect on supply in a variety of ways. If Russia stops exporting fertilisers, this will substantially restrict agricultural production in other regions.
It is said that truth is the first casualty of war. The war in Ukraine is no exception. Logistics is another casualty of the war. This is made clear in a report about Moritz Stamm, a farmer from Schaffhausen who emigrated to Ukraine 18 years ago and built up farm covering 2900 hectares a three-hour drive south of Kyiv. Half of last year’s harvest is still stored in warehouses. The corn, wheat and sunflower seeds were supposed to be shipped to Odessa by May, but that is no longer possible. Not only because the ports are blocked but also because there is a shortage of lorry drivers. As well as production itself, the war is also threatening agricultural supply chains and crop distribution logistics.
According to the FAO, the coming months are critical for agricultural production in Ukraine. Normally, the farmers prepare the land for production in the spring. The harvests are seriously jeopardised by the war. There are shortages of labour, spare parts, seed, fuel and fertiliser. And the war makes work impossible. The wheat sown in back in autumn 2021 could be ready to be harvested from June onwards. Barley, corn and sunflowers are usually sown between February and May. According to the Financial Times, the hardship felt in Ukraine would be all the greater if farmers in the west of the country were also unable to grow crops. There is a tremendous amount of uncertainty and along with it is the risk that the conflict could lead to global famine, writes The Guardian.
The FAO has identified a whole series of risks to global food supply:
- Commercial risks: due to closed ports, closed processing plants, export restrictions and uncertainty over future exports of agricultural products and fertilisers from Russia and Ukraine.
- Price risks: there is the threat of a sudden price increase of up to 20%.
- Logistical risks: because of the destruction and obstruction of the infrastructure used to export goods, trade routes are blocked.
- Production risks: farmers can no longer attend to their fields. It is expected that up to 30% of agricultural land in Ukraine is directly affected by the war.
- Humanitarian risks: more people are relying on food aid. This is the case in both Ukraine and the countries taking in refugees.
- Energy risks: Russia is an important energy provider and increases in energy prices are also making energy-intensive agricultural production more expensive.
- Exchange rate, debt and growth risks: There are longer-term questions over investments into the agriculture sector.
The best solution to these risks is an end to the war. In order to mitigate the consequences for the global food supply, it is important to keep markets open for food and agricultural equipment. If protectionism becomes more prevalent because of the risks, the shortages will get even worse and this is something representatives from the most important industrial countries agree on. Maintaining the logistics and the financial solvency of operations in Ukraine is key to production. Countries should also be dipping into their reserves to mitigate the shock to the agricultural markets.
In the medium term, along with open markets, a sustainable increase in productivity in all forms of agriculture is the answer. This is the belief of Joachim Braun, Chair of the Scientific Committee for the UN Food Systems Summit among others (UNFSS), which took place last autumn. There have also been calls from the German FDP to step up agricultural production on a sustainable basis.
We often talk about the precautionary principle in order to avoid risks to the environment. However, the precautionary principle has now mutated into a principle of prevention: Extensive use of the right of appeal makes registration of new crop protection products nearly impossible. As a result, farmers have fewer and fewer products available to help fend off diseases and pests. ‘With the dwindling list of active ingredients, it is becoming more difficult to prevent resistance,’ fears Markus Hochstrasser from the Plant Protection Service in the Canton of Zurich, according to Schweizer Bauer.
So the precautionary principle could suddenly be taking on a new meaning. Instead of searching for residues that are harmless to humans or the environment, it is now a question of agriculture based on solidarity. It requires a primary production that is resource-efficient and makes a substantial contribution to feeding its own population in order to disburden other countries. The Swiss precautionary principle needs to be a clever mix of imports, domestic production and exports. This is based on a sustainable intensification and, at the same time, protecting the climate and biodiversity. This can only be done on a scientific basis.
Or as Bayer CEO, Werner Baumann, says in an interview with NZZ: ‘We have no other choice but to transition to sustainable agriculture with a low environmental impact and reduced CO2 emissions.’ And also: 'We need to reduce our consumption of natural resources and feed 25% more people. This can only be achieved based on sustainable intensification of farming, i.e. reducing land consumption at the same time as increasing crop yields.’
The swiss-food editorial team
