Food Geopolitics: Another War in the Making?

Welcome to a new age of food wars. In the current times of tightening food supplies and increasing inflation worldwide, the capability to secure sufficient food is increasingly becoming a new form of geopolitical leverage. Food protectionism is on the rise, and governments worldwide are scrambling to safeguard their local interests at the expense of the common good.

The food shortages have become worse especially since the Russian invasion of Ukraine which resulted in the global food supply chains being disturbed. This rise in protectionist moves threatened food security and access to basic nutrition levels resulting in widespread trade wars.

Ranking 71 among 113 countries in the Food Security Index, India alone has about 195 million undernourished people with roughly 43% of India’s children being malnourished. India has accused the West of hoarding and raising food prices to “unjustifiably high” levels, reminding them that food is not to be treated like Covid-19 vaccines.
This tightening of the food supply by different countries is worse than the food price crisis of 2007-08 and the effects have now started to spill over to richer economies too.

When did it all begin?

The first signs of food wars were seen in 2007 when farmers around the world were not able to keep up with the growth in global demand for grain. Exporting countries like Russia, Argentina, and Vietnam tried to control the rise of domestic food prices by restricting exports for several months in 2008, resulting in economic and political instability across the globe. Prices rose as a result of drought and the rising cost of oil and fertilizers was finally corrected in the 2008 recession.

Nations tightening supply

At least 20 countries have started making protectionist policies and have been hoarding food and fertilizers amidst supply shortages resulting in more problems.
India has capped sugar exports at 10 million tonnes and banned all wheat exports as this year’s crop yield is expected to be 8% lower compared to the last year.
Indonesia, the world’s biggest palm oil exporter, has removed the subsidy on bulk cooking oil, replacing it with a price cap on the raw materials for local refiners, after lifting the temporary ban to control domestic shortages and prices.
Malaysia has banned chicken exports creating a problem for Singapore which imports a third of its requirement from Malaysia. 

Wheat Export U-Turn

The Russian attack has shaken the wheat supply chain and Russia, the largest wheat producer, relies on its wheat inventories as another potential weapon to arm-twist its interests. 
Before the war, there was already a food shortage and the prices of food and shipping costs were multiplying.
Wholesale wheat inflation has surged to 14%, the highest in 63 months, pushing countries like Egypt and Turkey to bank on India which is being ravished by a heatwave and is expected to see supply shortages. After exporting wheat worth USD 650 million, India has bowed out of the wheat market.

Battle Against Starvation

At the World Economic Forum at Davos, policymakers are negotiating to prevent a trade war. The estimated number of people on the verge of starvation has risen from 80 million to 276 million over the last five years. The port closure in Ukraine in July-August is expected to further exacerbate the situation.
Worried that the current consumption patterns are not sustainable they are planning how to deal with climate change, food security, and waste.

Developing countries – most vulnerable

The developing counties are the worst hit by this rise in global food prices as the population spends a major part of their income on food, and any spike has a multiplier effect on their cost of living.

Low-income households in US and UK are having trouble keeping up with the soaring food prices. Benchmark wheat futures have gone up by 51% this year, palm oil prices have risen 37%, while dairy prices are up 14%. Protectionism is a problem for farmers who cannot capitalize on the high prices offered at international markets.
Food joints in the US have been planning to reduce portion sizes, while France has resorted to offering food coupons.

Bottomline

The food shortage needs to end and the prices need to stabilize as the people who do not have deep pockets are the ones who suffer the most. With the rising cost of living and soaring prices of commodities, the countries need to stop protecting their interest at the cost of other countries.

As land and water are becoming scarcer, temperatures rising, and world food security deteriorates, dangerous geopolitics is emerging. In this global power struggle for food security, grabbing land and water and securing supplies directly from farmers in exporting countries have become common features.

It is high time we attack the root causes. Focusing on producing higher crop yields and adopting less water-intensive practices is the need of the hour. An accelerated shift toward smaller families to stabilize the world population needs to be done sooner than later.
We need to act and act now before this emerging trade war becomes the new normal.
The world does not need another war!