- Hunger has been rising for a number of years,
well before the Ukraine crisis
and even well before COVID.
The number of hungry people in 2020 was already
about 800 million and rising, unfortunately.
A hundred million more than we had the year before.
(upbeat music)
- On this episode of "Expert Answers,"
we're looking at the impact of the war in Ukraine
on global food security.
While the most immediate
and obvious effects are taking place
in and around Ukraine,
disruptions from the war could have far reaching effects
beyond the region, especially on food prices.
What does this mean for the poorest and most vulnerable
and what should be done to promote food security?
For answers to these questions and more
let's talk now to the World Bank's Vice President
for Sustainable Development, Juergen Voegele.
(upbeat music)
So Juergen, thank you so much for being here
and taking the time to chat with us today.
One thing that I found interesting was that even before
the war in Ukraine, food insecurity was rising.
Can you explain the pre-existing drivers
to the rising food insecurity
and how this invasion is likely to make those worse?
- Yeah, it's good to be here, Paul.
Great to see you.
And thanks for having me.
As you said, hunger's been rising for a number of years,
well before the Ukraine crisis
and even well before COVID.
The number of hungry people in 2020 was already
about 800 million and rising, unfortunately.
A hundred million more than we had the year before.
And this is probably because
of the impacts of the COVID pandemic, but it's also because
of the long standing drivers of food insecurities,
such as conflicts, extreme weather events,
and pests and diseases.
Conflicts are a big issue and we need to look
at two elements of what it does, right?
It's the number of hungry people,
but it's also the acute food insecurity
and acute food insecurity is horrible
because it really puts people at immediate risk.
Defined as when a person's life
or livelihood is in immediate danger
because of lack of food and a staggering 388 million people
across 42 countries experienced acute huge food insecurity
which is more than 5% higher than in 2020.
So, this is an issue
that we really need to focus on right away.
- The conflict in Ukraine is obviously dominating
the headlines right now.
Can we sort of zoom in onto that?
And is it possible to say
which products are particularly affected?
Are there certain foods
that are particularly affected by the conflict in Ukraine?
- Sure, I mean, the commodities most affected
by the conflict are wheat predominantly,
to some extent maize, edible oils,
and very importantly fertilizers.
Actually wheat is the primary commodity affected
by the war.
Russia is the world's largest exporter of wheat,
accounting for about 18%,
nearly 20% of global exports in 2021.
And Ukraine accounts for another 10%.
Now they're both not the largest producers of wheat,
that's India and China, but they are the largest exporters.
And so, around 35% of the world's population relies
on wheat as the primary staple in their diet.
So, it's a very significant shock.
As of March, about a week ago, the price of wheat
on global markets was about 50% higher
than in February and almost 80% higher than a year ago.
Maize prices also increased following the invasion,
little rising about 25 to 30%,
above February levels and about 37% year on year.
So, those two commodities really have gone up.
Now, other commodities such
as rice are not affected for the moment
which is quite different from the situation we had 14,
15 years ago during the last food price crisis.
Globally price is still about 17% lower
than it was in January, 2021.
So, that there is a little bit of good news there.
Now, when you look at shipping through the Black Sea
it's at a standstill,
and high global wheat prices,
we can expect other countries to sell more wheat.
Fortunately, again, the stock levels are not bad
so we should not get a sense
that we have a global wheat shortage overall.
There is enough wheat
on the planet and planting more wheat this spring
and summer will make up of shortfall to a significant extent
if the exports remain blocked out of Ukraine and Russia.
So it's not really a total supply issue,
but the problem is that those countries that are used
to importing from those countries now have to adjust
and that will not be painless and it will be very costly.
Then you have the impact of the war on fertilizer cost
and that's significant because it could really translate
into production problems for the next season across crops.
If yields crash because the farmers cannot afford
or even access enough fertilizer.
We need to understand that Russia and Belarus
account for 20% of global fertilizer exports,
and again, fertilizer prices were already very high before
the war because of high oil prices and the price of urea,
for instance, actually tripled last year already.
These are the sort of the two main buckets.
It's the wheat export and it's the fertilizer export.
- And you're talking about the exports there.
Let's look at the other side of the equation there.
Countries that are importing,
maybe it's wheat, maybe it's other crops,
but which countries are most likely to be affected
by the conflict in Ukraine?
- So, as I was saying, right, countries
with a high share of wheat imports
from Ukraine and Russia are the highest immediate risk,
especially those who are still awaiting shipments
for the second half of the year, such as Egypt,
they're still waiting for 6.6 million tons.
Turkey is a major wheat importer, 4 million tons.
Bangladesh is close to 4 million tons.
And Iran is 1.7 million tons.
But also Lebanon, Tunisia, Yemen, Libya, and Pakistan.
You can see it's the countries in the region.
I mean, the main are the Middle East
and North African countries depend on wheat
from the Black Sea region for geographic regions, right?
The ships only have to cross the Mediterranean.
And wheat is a staple in that region's diet.
Egypt is the world's largest wheat importer, by the way.
Now, this also threats humanitarian operations
since the World Food Programme depends on this wheat.
So the compounding shock if you want,
of the war in Ukraine,
may cause severe outcomes for vulnerable people
in several Middle East, North African countries
if the humanitarian and development decisions
are not scaled up.
So again and again, whenever we have these crisis
it is the poor that suffer the most.
- And one of the ways we've seen countries respond
to this is with export restrictions.
Is that an effective strategy?
If a government official from a country were
to phone you up and say, "What should we do?
Should we stop the export of some of these crops?"
What would you tell them?
- Well, this is exactly the wrong thing to do.
So, really thanks for asking this question
because right now this is probably the most important thing
that we all can do.
Having a conversation around how to keep
the trade of food commodities open
and how to keep the goodies flowing.
So when they call us, we will say,
"Absolutely not a good idea.
If you want to support your own population,
do it in a different way,
but do not block the flow of food."
It's tempting, you know?
It's tempting to restrict export to avoid local shortages,
but it has very, very detrimental implications.
As we saw when we went through the 2007,
2008 food price crisis.
The trick is really to move food from places of surplus
to places of need and that's what needs to happen.
- So, that's what government shouldn't do.
What should they do?
What should governments, the national community do,
to support those that are most at risk of food insecurity?
- Right, so of course they need to act.
They need to react and they need to put measures in place.
In general it's much better to protect the purchasing power
of the poorest households
to well-targeted, nutrition-sensitive,
social protection programs, rather than
maintaining prices artificially low for everyone.
So for instance, subsidizing bread across all income levels
it's only very expensive for governments.
It's regressive.
It encourages food waste and poor diets
and it can be very hard
to politically correct once a crisis is over, right?
So, really supporting these social safety nets
at a time of crisis is the right way to go.
The same caution applies
to helping farmers access fertilizers, right?
The knee jerk reaction is often,
well let's subsidize it, okay?
It's gotten more expensive to help the farmers,
but if you apply these subsidies indiscriminately
it risks increasing demand and fertilizer prices worldwide
and it doesn't help in the end.
Removing input trade barriers,
focusing on more efficient user fertilizers,
investing in bio fertilizers,
repurposing these public policies and expenditures
to better support farmers.
A much better way of doing this.
Again, this is in addition
to the export restriction conversation.
What you do domestically is actually very,
very important as well.
And we know now from many,
a couple of decades of experience what works
and what has a beneficial effect overall
and what doesn't work
and what should be avoided in a situation like this.
- And we spoke a couple months ago about supply chains
and what that meant for food prices and food security.
A few months ago, most of us couldn't imagine
a war like the one that's happening in Ukraine.
What can countries do to improve their resilience kind of
across the board over the long term to shocks?
Whether it's something like a pandemic
that was quite hard to predict,
a conflict that was hard to predict.
How can they strengthen their food security
and boost nutrition over the long term
and create that resilience that they need?
- Right, I think it's a very important point
that we don't just focus on the immediate crisis
and the short term measures,
but every country going forward needs
to continue to transform its food systems
and make it more resilient in the long term.
It's really crucial to stay that course.
The food systems, as I said, were already reeling
from multiple crisis prior to the Russian's invasion
of the Ukraine.
Governments, private businesses, and international partners
really need to work towards more productive,
more resource-efficient, more diverse,
and more nutritious production systems to ensure
that food and nutrition security is there
in the face of rising climate conflict and economic risks.
I think this is absolutely clear to everyone.
It's just, we forget during times of crisis
that we can't take our eyes off the medium to long term.
So it's really important to better target
the public spending.
We talked about the subsidies before.
Right now the spending is in the order
of three quarters of a trillion dollars a year.
And a lot
of that money is not doing what we've just discussed
and it needs to be repurposed.
It needs to be redirected
in a way that actually achieves
those more resilient, more nutritious,
and less climate damaging outcomes.
Important to mobilize private funding and investing
in innovation and research and development will be key
because everybody needs to do more with less, right?
We produce more nutritious, more diverse,
more high value food for growing population.
And to do this with less water and fertilizer
while limiting the land use
and greenhouse gas emissions, climate smart agriculture,
is the word to remember here.
Now research suggests that investing
in stronger food systems is also an investment in peace.
I think this must be clear to everyone.
If the food systems are wobbly,
as we see in many countries right now,
this leads to conflict,
it leads to migration, et cetera, et cetera.
- And I asked you earlier about
what would be your advice kind of hypothetically
if government officials started reaching out
to you or the World Bank.
My last question for you is have countries reached out
to the World Bank Group for help?
And what kind of support is being offered
in this area of food security?
- Yes, definitely.
I mean, we have been in touch with a number of countries
in East Africa, West Africa, North Africa, Middle East,
several other parts of the world, even before the pandemic.
But, now it's really been ramping up.
A lot of countries are asking
for support and we've responded
with a whole set of emergency financing and new projects.
And we actually expect to do more with this additional shock
and just the World Bank has provided significant support
just in the last two years, about 17 billion annually
in combined IDA and IBRD lending.
This is up from about 12 billion
on average in the previous three years,
primarily for agriculture
and the social protection measures.
And in the last couple of years
we've allocated about half a billion
across 11 countries from the crisis response window.
And there will be a lot more coming.
And let's be clear,
this is not the last crisis we are facing.
So whatever we do, we need to immediately help those
in acute need, but we should never take our eyes off
that there was a much deeper and much more fundamental issue
that we need to address with our support in our programs.
- Juergen, this is brilliant.
Thank you so much for taking the time today.
I really appreciate it.
- It's my pleasure.
(upbeat music)
- A huge thanks to Juergen Voegele for his time.
You can find out more about how the World Bank is responding
to the war in Ukraine, by heading over to our website.
That's worldbank.org.
And a quick reminder that the World Bank-IMF spring meetings
are just around the corner.
We're planning several important events
and we want you to take part, find out the full schedule
and more details at live.worldbank.org.
Until next time, goodbye.
(upbeat music)