As the food crisis continues to worsen in vulnerable nations, the Minister of the Economy of Senegal, Amadou Hott, has encouraged the global food sector not to boycott the trade of food goods that are produced in Russia and Ukraine.
At a summit of world financial executives held in Bali the week before last, Hott warned that if the current crisis, which is characterized by both a lack of available food and high costs, is not resolved quickly, it may result in the deaths of more people “than during the times of the Covids.”
As a result of the conflict, various nations, including the United States and the members of the European Union, have placed restrictions on their citizens’ ability to use or trade Russian goods. However, despite the fact that essential commodities such as food and fertilizers are excluded from these penalties, many who work in the food industry are proactively avoiding these transactions in order to safeguard themselves, as Hott said further.
“We understand that food and fertilizers are exempt from sanctions. However, the market participants, whether it’s traders, or the banks, or the insurers, are reluctant to participate if the products are coming from certain locations because they’re afraid to be sanctioned in the future,” he said.
“Is it possible to say, whenever you’re buying fertilizer, food from Russia or from Ukraine or from wherever around the world, there will be no sanctions today, no sanctions tomorrow … so that we can stabilize the market?”
“We are not responsible for this crisis but we [Africa] are suffering.”
At the G-20 summit that took place the week before last, the primary topics of discussion were food security and rising food costs. This was due to the fact that the epidemic and the war in Ukraine had disrupted food supply networks all over the world.
Even before the conflict started, there was an increase in both food prices and food shortages. However, given that Russia and Ukraine are two of the largest exporters of agricultural staples such as wheat, the war made the difficulties that were already present in regions like as Africa and the Middle East even worse.
According to Hott, the problem is particularly severe in African nations, which account for one-third of the world’s population that is suffering from malnutrition. According to him, Africa is suffering from a shortage of around 2 million tonnes of fertilizer this year, which would result in a loss of 11 billion dollars’ worth of food production in this year.
In order for Africa and other regions to stop being dependent on food imports, investments must be made to speed up the production of food on the local level.
“Like during Covid times the world came together and made extraordinary decisions in the shortest period of time,” he remarked. “All the partners changed procedures and policies to really meet the challenge. Like the IMF, the World Bank, the ADB, everybody changed their policies to help the countries. This time, it is the same. If we don’t get fast, we’ll have more casualties than during Covid times,” he continued.
Worse still, according to Hott, it will cost more money for governments to purchase food supplies and assist populations with help during a period when interest rates are increasing.
A bleak outlook for underdeveloped countries
During the same discussion at the G-20 summit, Ngozi Okonjo-Iweala, the director-general of the World Trade Organization, expressed her concern that less developed nations would be disadvantaged as a result of the competition for limited food supplies creating the potential for a food crisis.
“Amid intense competition for food, and key inputs like fertilizer, there is a risk that supplies may be diverted away from poorer countries to richer ones, repeating the experience for Covid-19 vaccines,” she said while urging countries to work together rather than against each other to resolve the problem of food security.
U.S. Treasury Secretary Janet Yellen stated during the same discussion that the G-20 must set an example for other nations to follow and urge them to refrain from engaging in actions that are counterproductive. These actions include stockpiling food and key supplies and imposing export restrictions, both of which have the potential to “distort markets and further drive up prices.”
During the same conversation, the United Nations Food and Agriculture Organization (FAO) mentioned that the numbers present a bleak picture.
Qu Dongyu, director-general of the FAO, stated that the organization’s food price index had reached an all-time high. He also advocated a four-point approach, one of which included increasing expenditures in the countries that have been most badly affected.
The executive director of the International Monetary Fund, Kristalina Georgieva, stated that the G-20 countries need to delve deeper and come up with better answers.
During the same session, she made the following statement: “We need to employ all of our capacity against trade restrictions, raise our collective voice that it is not only immoral but harmful if food doesn’t get to where it must.”
“We want to see the international supply of food increase including negotiations to get the grains out of Ukraine to where it is needed, and we need to support food production, storage and distribution.”
During the meeting of the G-20, Georgieva, FAO’s Qu, and WTO’s Okonjo-Iweala, along with World Bank Group president David Malpass and World Food Programme executive director David Beasley, released a joint statement in which they called for immediate global action to be taken on the food crisis.
According to their statement, “By June 2022 the number of acute food insecure people whose access to food in the short term has been restricted to the point that their lives and livelihoods are at risk.”