1.7 billion people are facing heightened exposure to spiking food, energy, and fertilizer costs
by UN News, FAO, WFP, Oxfam, agencies
3:14pm 11th Apr, 2022
1.7 billion people are facing heightened exposure to spiking food, energy, and fertilizer costs. (UN News)
UN Secretary-General Antonio Guterres has presented the first policy briefing issued by the Global Crisis Response Group on Food, Energy and Finance (GCRG), which was set up to examine the impacts of the war in Ukraine on the world’s most vulnerable.
The Global Crisis Response Group on Food, Energy and Finance is a 32-member group, which includes heads of UN agencies, development banks and other international organizations. It was launched in March, in response to concerns over the potential consequences of the Russian invasion of Ukraine, as well as the continuing wide ranging impacts of the COVID-19 pandemic. The group is tasked to advance collaboration across governments, the multilateral system and a wide range of sectors, to help vulnerable countries avert large-scale crises.
Speaking at the launch of the brief, Mr. Guterres pointed out that, whilst most attention is focused on the effects of the war on Ukrainians, it is also having a global impact, in a world that was already witnessing increased poverty, hunger and social unrest.
“We are now facing a perfect storm that threatens to devastate the economies of developing countries”, said the UN chief.
The Ukraine crisis risks tipping up to 1.7 billion people — over one-fifth of humanity — into poverty, destitution and hunger.
Ukraine and the Russian Federation provide 30 per cent of the world’s wheat and barley, one-fifth of its maize, and over half of its sunflower oil. Together, their grain is an essential food source for some of the poorest and most vulnerable people, providing more than one-third of the wheat imported by 45 African and and least-developed countries. At the same time, Russia is the world’s top natural gas exporter, and second-largest oil exporter.
The war has compounded the challenges many developing countries are facing as a result of the COVID-19 pandemic, as well as historic debt burdens and soaring inflation.
Since the start of 2022, wheat and maize prices have increased by 30 per cent, oil prices have gone up by more than 60 per cent over the last year, and natural gas and fertilizer prices have more than doubled.
At the same time, the UN’s humanitarian operations are facing a funding crunch: the World Food Programme (WFP) has warned that it does not have enough resources to feed hungry people in desperate situations. The agency urgently needs $8 billion to support its operations in countries in humanitarian crisis.
The report, said Mr. Guterres, “shows that there is a direct correlation between rising food prices and social and political instability. Our world cannot afford this. We need to act now”.
The policy brief underlines the importance of global cooperation in tackling the crisis, which, it says, “will leave deep and long-lasting scars”. The report calls on all countries – as well as the private sector, NGOs and other actors – to recognize that “the very nature of increasingly common global shocks is such that countries are not individually responsible”, and that solutions need to be based on the global, rather than national, risk.
In light of the soaring cost of food, fuel and other commodities, all countries are urged to keep their markets open, resist hoarding and unnecessary export restrictions, and make reserves available to countries at the highest risk of hunger and famine.
The report calls on international financial institutions to release funding for the most vulnerable countries, help governments in developing countries to invest in the poorest and most vulnerable by increasing social protection, and work towards reforming the global financial system so that inequalities are reduced.
Humanitarian appeals, says the policy brief, must be fully funded, and major reform of the international financial system is needed to, in the words of the UN Secretary-General, “pull developing countries back from the financial brink”.
The policy brief acknowledges that, in the short term, strategic reserves of fossil fuels need to be released in order to stabilize prices and ensure sufficient supplies. However, a ramped-up deployment of renewable energy would help to ensure that the kinds of energy prices rises currently being seen are not repeated in the future, whilst hastening progress towards a cleaner, low carbon, energy future.
http://news.un.org/en/story/2022/04/1116152 http://news.un.org/pages/global-crisis-response-group/ http://www.wfp.org/publications/unprecedented-needs-threaten-hunger-catastrophe-april-2022 http://www.oxfam.org/en/press-releases/terrifying-prospect-over-quarter-billion-more-people-crashing-extreme-levels-poverty
7 Apr. 2022
UN Food and Agriculture Organization calls for special assistance fund for food importing countries - A Global Food Import Financing Facility (FIFF): Responding to soaring food import costs and addressing the needs of the most exposed.
To soften the impact of Russia’s invasion of Ukraine on nations that import most of their food needs from both countries, 80 FAO Members on Friday appealed for for the creation of a $25 billion fund to help them in the short term.
“This conflict severely aggravates the already considerable food security challenges exacerbated by the COVID-19 pandemic, including already-high price inflation of food and agricultural inputs,” said FAO Member States who called for an Emergency Special Session of the UN agency’s Council.
To cover the most immediate needs, $6.3 billion is required for the Global Food Import Financing Facility to get off the ground, FAO said, noting that more funding could potentially be made available from other sources, such as Special Drawing Rights issued by the International Monetary Fund.
“The basic idea is just to alleviate the food import costs, the food import bills for net importers with high net import requirements and low income levels,” said Mr. Schmidhuber. http://www.fao.org/3/cb9444en/cb9444en.pdf
http://www.dw.com/en/un-warns-of-great-finance-divide-as-covid-shocks-debt-hits-poorest-hardest/a-61461015 http://www.un.org/en/desa/great-finance-divide-amid-covid-19-poses-major-setback-sustainable-development http://bit.ly/3jAzhJN http://bit.ly/3roOKko
Soaring prices putting poor countries at risk of debt default: IMF
The IMF says sharply higher global food and energy prices due to the war in Ukraine are hitting developing countries hard, and better mechanisms for dealing with sovereign debt stress will be needed to stave off defaults.
“With sovereign debt risks elevated, a global cooperative approach is necessary to reach an orderly resolution of debt problems and prevent unnecessary defaults.”
Spikes in food and energy prices were hitting low-income countries particularly hard, and they need more grants and highly concessional financing. Some 60 percent of low-income countries were already in, or at risk of, debt distress, the IMF said. Rising interest rates in leading economies could well make it more costly for them to borrow.
Actions taken by major economies were insufficient, the IMF said, noting that a freeze in official bilateral debt payments adopted at the start of the pandemic had ended, and no restructurings had been agreed under a framework set by the Group of 20 industrialized nations. Options were needed for a broader range of countries, now not yet eligible for debt relief.
Policymakers need to take a cooperative approach to ease the debt burdens of the most vulnerable countries, foster greater debt sustainability, and balance the interests of debtors and creditors.
“Muddling through will amplify costs and risks to global stability and prosperity”.. “In the end, the impact will be most sharply felt by those households that can least afford it.”
"In advanced economies, economic activity, the primary balance, spending, and revenues are projected to return close to pre-pandemic projections by 2024. But the situation in developing countries is much more concerning. Both emerging and low-income economies face persistent GDP and revenue losses. This implies that primary spending will be persistently lower as a consequence of the pandemic, pushing countries further back from reaching the Sustainable Development Goals. That is a matter of global concern".
"Sharp increases in energy and food prices are adding to these pressures for the poorest and most vulnerable. Food accounts for up to 60 percent of household consumption in low-income countries. These countries face a unique confluence of factors: dire humanitarian needs intersect with extremely tight financial constraints. For low-income countries that rely on imported fuel and food, the shock may require more grants and highly concessional financing to make ends meet while supporting those households in need".
http://jubileedebt.org.uk/press-release/growing-debt-crisis-to-worsen-with-interest-rate-rises http://www.hrw.org/news/2022/04/14/imf/world-bank-targeted-safety-net-programs-fall-short-rights-protection http://www.oxfam.org/en/press-releases/imf-must-abandon-demands-austerity-cost-living-crisis-drives-hunger-and-poverty http://onlinelibrary.wiley.com/doi/10.1111/1758-5899.13028
Over a quarter of a billion more people could crash into extreme levels of poverty in 2022 because of COVID-19, rising global inequality and the shock of food price rises supercharged by the war in Ukraine, reveals a new Oxfam brief today.
“First Crisis, Then Catastrophe”, published ahead of the World Bank and IMF Spring Meetings in Washington DC, shows that 860 million people could be living in extreme poverty — on less than $1.90 a day — by the end of this year. This is mirrored in global hunger: the number of undernourished people could reach 827 million in 2022.*
The World Bank had projected COVID-19 and worsening inequality to add 198 million extreme poor during 2022, reversing two decades of progress. Based on research by the World Bank, Oxfam now estimates that rising global food prices alone will push 65 million more people into extreme poverty, for a total of 263 million more extreme poor this year —equivalent to the populations of the UK, France, Germany and Spain combined.
“Without immediate radical action, we could be witnessing the most profound collapse of humanity into extreme poverty and suffering in memory,” said Oxfam International executive director Gabriela Bucher. “This terrifying prospect is made more sickening by the fact that trillions of dollars have been captured by a tiny group of powerful men who have no interest in interrupting this trajectory.”
As many people struggle now to cope with sharp cost-of-living increases, having to choose between eating or heating or medical bills, the likelihood of mass starvation faces millions of people already locked in severe levels of hunger and poverty across East Africa, the Sahel, Yemen and Syria.
The brief notes that a wave of governments is nearing a debt default and being forced to slash public spending to pay creditors and import food and fuel. The world’s poorest countries are due to pay $43 billion in debt repayments in 2022, which could otherwise cover the costs of their food imports. Global food prices hit an all-time high in February, surpassing the peak crisis of 2011. Oil and gas giants are reporting record-breaking profits, with similar trends expected to play out in the food and beverage secto
People in poverty are being hit harder by these shocks. Rising food costs account for 17 percent of consumer spending in wealthy countries, but as much as 40 percent in Sub-Saharan Africa. Even within rich economies, inflation is super-charging inequality: in the US, the poorest 20 percent of families are spending 27 percent of their incomes on food, while the richest 20 percent spend only 7 percen
For most workers around the world, real-term wages continue to stagnate or even fall. The effects of COVID-19 have widened existing gender inequalities too — after suffering greater pandemic-related job losses, women are struggling to get back to work. In 2021, there were 13 million fewer women in employment compared to 2019, while men’s employment has already recovered to 2019 levels.
The report also shows that entire countries are being forced deeper into poverty. COVID-19 has stretched all governments’ coffers but the economic challenges facing developing countries are greater, having been denied equitable access to vaccines and now being forced into austerity measures.
Despite COVID-19 costs piling up and billionaire wealth rising more since COVID-19 than in the previous 14 years combined, governments — with few exceptions — have failed to increase taxes on the richest. An annual wealth tax on millionaires starting at just 2 percent, and 5 percent on billionaires, could generate $2.52 trillion a year —enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.
“We reject any notion that governments do not have the money or means to lift all people out of poverty and hunger and ensure their health and welfare. We only see the absence of economic imagination and political will to actually do so,” Bucher said.
“Now more than ever, with such scale of human suffering and inequality laid bare and deepened by multiple global crises, that lack of will is inexcusable and we reject it. The G20, World Bank and IMF must immediately cancel debts and increase aid to poorer countries, and together act to protect ordinary people from an avoidable catastrophe. The world is watching”.
Oxfam is calling for urgent action to tackle the extreme inequality crisis threatening to undermine the progress made in tackling poverty during the last quarter of a centur
Introduce one-off and permanent wealth taxes to fund a fair and sustainable recovery from COVID-19. Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ that has brought in around $2.4 billion to pay for pandemic recovery.
End crisis profiteering by introducing excess profit taxes to capture the windfall profits of big corporations across all industries. Oxfam estimated that such a tax on just 32 super-profitable multinational companies could have generated $104 billion in revenue in 2020.
Cancel all debt payments for developing countries that need urgent help now. Cancelling debt would free up more than $30 billion in vital funds in 2022 alone for 33 countries already in or at high risk of debt distress.
Boost aid and pay for Ukrainian assistance and the costs of hosting refugees with new funding, rather than shift aid funds earmarked for other crises in poorer countries.
Reallocate at least $100 billion in Special Drawing Rights (SDR), without burdening countries with new debt or imposing austerity measures. The G20 promised to deliver $100 billion in recycled SDRs but only $36 billion has been committed to date. A new SDR issuance should also be considered and distributed based on needs rather than countries’ quota shares at the IMF.
Act to protect people from rising food prices, and create a Global Fund for Social Protection to help the poorest countries provide essential income security for their populations, and maintain these services in times of severe crisis.
* The OCHA Global Humanitarian Overview 2022:
"Last year’s warnings of unprecedented levels of global food insecurity have been confirmed. Up to 811 million people worldwide were undernourished in 2020, an approximate rise of 161 million from the previous year". The Oxfam/World Bank estimation: "undernourished people could reach 827 million by the end of 2022" is likely to be a most significant under-estimation of the real figure. Further the World Bank estimations of the number of people living in extreme poverty is also a significant under-estimation of the real figure. See UNU report - Above or below the poverty line, by Andy Sumner and Eduardo Ortiz-Juarez.
"Rapidly escalating energy prices will drive up the cost of basic food commodities,” said Gabriel Ferrero, chair of the Committee on World Food Security (CFS), a top-level UN forum. “This is not just a problem between Russia and Ukraine; it is a problem for all of us, worldwide.”
Food security implications of the Ukraine conflict. (WFP)
The main expected effect of the conflict on global food security comes through the impact on global grain and energy markets. International food and fuel prices have increased sharply since the onset of the conflict; this will ultimately affect local food prices and, because of this, access to food. At the same time, grain and oil price hikes increase the cost of WFP’s operations, reducing the ability to serve those in need just when it is most required.
Adding to the challenges, the Ukraine conflict does not happen in a vacuum. New COVID-19 variants and supply chain issues have disrupted the global economic recovery, while rising inflation and record debt constrain countries’ ability to address renewed problems.
Poorer countries are struggling the most to recover from the pandemic’s economic fallout, left behind by a lack of access to vaccines and lower capacity to finance stimulus measures. About 60 percent of low-income countries are currently in, or at high risk of, debt distress, compared with 30 percent in 2015. Despite sluggish economic growth, inflation has been on the rise – and with it the risk of stagflation.
Global grain markets in turmoil
Both Ukraine and Russia are critical players in global wheat and maize markets, ranging among the top five exporters globally for both commodities. Together, the two countries supply 30 percent of wheat and 20 percent of maize to global markets. In addition, Russia and Ukraine are key exporters for sunflower oil and barley, accounting for more than three-quarters and one-third of supplies to international markets, respectively.
The Russian military invasion has brought shipments from Ukraine to a halt and paused Russian grain deals, amidst uncertainty around sanctions. An estimated 13.5 million tons of wheat and 16 million tons of maize are frozen in the two countries – 23 and 43 percent of their expected exports in 2021/22.
Movements in international grain prices reflect these disruptions, with major export quotations for wheat up by 28 percent on average within two weeks – US No 2 Soft Red Winter Wheat increased by 52 percent between 21 February and 7 March. FAO’s Food Price Index reached a new all-time high in February 2022.
Export disruptions in the Black Sea have immediate implications for countries such as Egypt, which heavily rely on grain imports from Russia and Ukraine. Beyond countries sourcing Black Sea grain, those dependent on grain imports more broadly are the first in line to experience domestic food price increases, following rising prices on global grain markets. In more than 40 countries with WFP operations, imported cereals such as wheat and maize account for 30 percent or more of dietary energy.
Upheaval in global energy markets
Russia is the world’s third-largest producer of crude oil and its second-largest exporter. Europe and China import around 60 percent and 20 percent of Russia’s oil, respectively. Russia is the largest natural gas exporter in the world. European countries heavily depend on Russia’s natural gas imports, as 32 percent of their total consumption is supplied by Russia.
Following the Russian invasion, crude oil prices soared to a 14-year high. The conflict also significantly elevated European gas prices, which have been highly volatile throughout the current heating season in Europe.
Russia’s oil supply to global markets is severely disrupted. Even before western countries imposed sanctions on Russian oil exports, high shipping costs and uncertainty about potential buyers reduced traders’ willingness to order oil from Russian ports.
With global oil supply at its limits, Russian supply disruptions could keep global oil prices elevated.The invasion has so far not severely disrupted Russian natural gas supply to Europe but the EU has published plans to cut Russian gas supplies by two-thirds in 2022.
High global energy prices can lead to increasing food insecurity around the world. By pushing up local inflation, high costs of imported energy reduce purchasing power and poor households’access to food.
Soaring international fuel prices increase already-pressured global grain prices, thereby aggravating the repercussions for food security. In addition, Russia is one of the world’s most important exporters of the three major groups of fertilizers – nitrogen, phosphorus and potassium. Rising input costs in turn could impact the next season’s harvest, leading to elevated food prices in the longer run.
Ripple effects for food security – and the world in a difficult place to brace them
The conflict unfolds in one of the world’s breadbaskets. In addition, Russia is among the world’s most important energy exporters. Global grain and energy markets are in turmoil, reflected by sharp price rises; while these increases are currently in international markets, they are likely to trickle down to domestic markets, especially in import-dependent countries, with implications for access to food for the most vulnerable.
At the same time, grain and oil price hikes increase the cost of WFP’s operations, reducing the ability to serve those in need just when it is most required.
Adding to the challenges, the Ukraine conflict does not happen in a vacuum. New COVID-19 variants and supply chain problems have disrupted the global economic recovery, while rising inflation and record debt constrain countries’ abilities to address renewed challenges.
After working-hour losses equivalent to 258 million full-time jobs in 2020 and 125 million in 2021, labour markets struggle to recover, with lost working hours still estimated to reach the equivalent of 52 million full-time jobs in 2022.
Poorer countries are struggling the most to recover from the pandemic’s economic fallout, left behind by a lack of access to vaccines and lower capacity to finance stimulus measures. About 60 percent of low-income countries are currently in, or at high risk of, debt distress, compared with 30 percent in 2015. Despite sluggish economic growth, inflation has been on the rise, stoking fear of stagflation.
A total of 27 countries currently face annual food inflation of 15 percent or more, including five countries – Lebanon, Venezuela, Sudan, Yemen (Internationally Recognized Government) and Cuba – with three-digit rates. An additional 20 countries have experienced food price rises between 10 and 15 percent over the past year; and 45 countries between 5 and 10 percent.
* Access the full report (19pp): http://bit.ly/3uErhMR
Mar. 2022 (Plan International)
The devastating crisis in Ukraine and the need to prevent it from becoming a conflict-hunger and nutrition crisis means we must not wait until Ukraine reaches food security emergency levels to react. At the same time, we must ensure the global hunger crisis is not further aggravated - particularly in the 20 hunger hotspots.
Ethiopia, Nigeria, South Sudan, Central African Republic and the countries in the Central Sahel, among others, are facing alarming levels of food insecurity. With a third of world wheat supplies coming from Ukraine and Russia, hunger could increase across the world. Popularly known as the ‘bread basket of Europe’, and home to the world’s most fertile soil, Ukraine has for years supplied the world with sunflower oil, barley, maize, and wheat, as well as fertilisers.
Knock-on effects on food crises
“The Sahel region of West Africa, already stricken by hunger, relies on wheat supplies from Ukraine,’ says Sven Coppens, Director, Plan International, Coastal West Africa. “The conflict in Europe will trigger even higher food prices, meaning it can only worsen the hunger crisis in countries here such as Burkina Faso, Mali and Niger.
Now, just at the start of the spring harvest season, the war in Ukraine means fields won’t be prepared, crops won’t be planted, fertilisers won’t be available; bringing potentially devastating consequences not only for children caught up in the conflict, but for the entire world, particularly those places already crippled by hunger.
Furthermore, according to the UN, sanctions on procurement from and transaction with Russia could have a ripple effect on humanitarian operations in West and Central Africa, while operations relying on imports transiting through Russian territory might also be disrupted.
Global food prices are rising
Before last week, global food prices were already rising at an alarming rate, and a spiralling hunger crisis currently envelopes huge swathes of West and Central Africa, East Africa and other countries such as Bangladesh, Haiti and Honduras.
Conflict and the COVID-19 pandemic are contributing to a dramatic escalation in food insecurity, and it is estimated that an unprecedented 283 million people may already be acutely food insecure or at high risk in 80 countries. The crisis in Ukraine will mean disrupted supply chains and even higher prices, which could have far-reaching and long-lasting consequences for people who are already acutely hungry.
“Many of these nations that are food insecure are already dealing with conflict, and the combination of hunger, conflict and COVID-19 make the humanitarian impacts very serious. The increasing violence and insecurity in the region, large-scale population displacements due to active hostilities with deteriorating socio-political and armed conflicts, climate change.”
Number of food insecure people continues to rise
In 2022, over 61 million people were already projected to require assistance and protection in the West and Central Africa region. The number of food insecure people has been on the rise there, with more than 22 million people food insecure, and 2021 saw a drastic increase in humanitarian needs in the Central Sahel.
On the other side of the continent, more than 20 million people in Ethiopia, Kenya and Somalia are in urgent need of food and water. Millions of families’ harvests have failed, while thousands of their livestock - which pastoral families rely upon for sustenance and livelihoods - are emaciated or dead.
In East Africa, food prices have for many months been rising in drought-affected areas, due to a combination of macro-economic challenges and below-average harvests, leaving families unable to afford even basic items. Meanwhile, many water points are dry, forcing women and girls to walk longer distances to access water and increasing the risk that they may face gender-based violence.
Additional risks for girls during crises
The impacts of escalating crises on children and girls, particularly, are disastrous. Gender norms and entrenched gender inequalities mean girls and young women often eat less and last when food is scarce, and their nutritional needs may take a back seat to those of boys and men. When food is scarce, families increasingly resort to negative coping mechanisms to survive. For adolescent girls, this often means that the risk of child, early and forced marriage - and with it, their risk of early pregnancy increases.
Plan International welcomes the rapid support for the humanitarian crisis in Ukraine, and advocates that a food security and nutrition crises in Ukraine and refugee-receiving countries be avoided. All humanitarian funds to alleviate the suffering of people affected by this conflict must be additional, and must not at any time be diverted from already scarce financing for existing crises.
“The humanitarian crisis unfolding in Ukraine and neighbouring countries is having a devastating impact on children, and it is vital we respond,” he says. “At the same time, we must ensure that we continue to support children in other critical and underfunded humanitarian crises taking place globally.”
UNCTAD’s rapid assessment of the war’s impact on trade and development shows a rapidly worsening outlook for the world economy, with the situation especially alarming for African and least developed countries.
An UNCTAD rapid assessment of the war in Ukraine’s impact on trade and development confirms a rapidly worsening outlook for the world economy, underpinned by rising food, fuel and fertilizer prices.
The report published on 16 March also shows heightened financial volatility, sustainable development divestment, complex global supply chain reconfigurations and mounting trade costs.
“The war in Ukraine has a huge cost in human suffering and is sending shocks through the world economy,” UNCTAD Secretary-General Rebeca Grynspan said in a statement.
“All these shocks threaten the gains made towards recovery from the COVID-19 pandemic and block the path towards sustainable development.”
Concern abounds over the two fundamental “Fs” of commodity markets – food and fuels.
Ukraine and Russia are global players in agri-food markets, representing 53% of global trade in sunflower oil and seeds and 27% in wheat.
This rapidly evolving situation is especially alarming for developing nations. As many as 25 African countries, including many least developed countries, import more than one third of their wheat from the two countries at war. For 15 of them, the share is over half.
“Soaring food and fuel prices will affect the most vulnerable in developing countries, putting pressure on the poorest households which spend the highest share of their income on food, resulting in hardship and hunger,” Ms. Grynspan said.
http://unctad.org/news/ukraine-wars-impact-trade-and-development http://news.un.org/pages/global-crisis-response-group/ http://www.imf.org/en/News/Articles/2022/04/13/pr22117-joint-statement-wbg-imf-wfp-and-wto-call-for-urgent-coordinated-action-on-food-security http://www.worldbank.org/en/news/statement/2022/04/22/chair-s-statement-105th-meeting-of-the-development-committee-ms-azucena-arbeleche-minister-of-economy-and-finance-orient http://ipes-food.org/pages/foodpricecrisis http://www.fao.org/cfs/cfs-hlpe/news-archive/en/
http://www.wider.unu.edu/publication/above-or-below-poverty-line http://www.hrw.org/news/2022/04/14/imf/world-bank-targeted-safety-net-programs-fall-short-rights-protection http://www.oxfam.org/en/press-releases/imf-must-abandon-demands-austerity-cost-living-crisis-drives-hunger-and-poverty http://www.eurodad.org/news http://www.socialprotectionfloorscoalition.org/2021/04/video-of-the-event-international-solidarity-to-support-a-robust-and-inclusive-recovery-a-global-social-protection-fund/ http://onlinelibrary.wiley.com/doi/10.1111/1758-5899.13028
* Available funds to meet urgent needs. The Stockholm International Peace Research Institute reported in April 2022 that global military expenditure reached $2113 billion in 2021 a new record high. Tax revenue losses and illicit financing meant anywhere between $450-900 billion was lost to Government revenues in 2021.
It is the viewpoint of the Universal Rights Network that the basline figure most relevant to measure current global poverty estimations is the upper band of the 2020 FAO SOFI report of at least 811 million people. Recent upward revisions to poverty numbers as a result come on top of this figure, and most likely mean those suffering extreme poverty now exceeds 1 billion people.
17 Mar. 2022 (IFAD)
As the war continues to rage in Ukraine, impacts of rising food prices and shortages of staple crops are already being felt in the Near East and North Africa region and spreading to the world’s most vulnerable countries, including in the Horn of Africa, with poorest people at greatest risk, warned the UN’s International Fund for Agricultural Development (IFAD) today. This comes amidst mounting concerns by the international community that the ongoing conflict will escalate global hunger and poverty.
A quarter of global wheat exports come from Russia and Ukraine. Forty percent of wheat and corn from Ukraine go to the Middle East and Africa, which are already grappling with hunger issues, and where further food shortages or price increases risk pushing millions more people into poverty.
Russia is also the world’s largest fertilizer producer. Even before the conflict, spikes in fertilizer prices last year contributed to a rise in food prices by about 30 percent. IFAD’s analysis looks at the impact that the war will have on already poor small-scale producers and rural communities.
“I am deeply concerned that the violent conflict in Ukraine, already a catastrophe for those directly involved, will also be a tragedy for the world’s poorest people living in rural areas who cannot absorb the price hikes of staple foods and farming inputs that will result from disruptions to global trade,” said Gilbert F. Houngbo, President of IFAD. “We are already seeing price hikes and this could cause an escalation of hunger and poverty with dire implications for global stability.”
IFAD’s analysis shows that price increases in staple foods, fuel and fertilizer and other ripple effects of the conflict are having a dire impact on the poorest rural communities. For example:
In Somalia, where an estimated 3.8 million people are already severely food insecure, the costs of electricity and transportation have spiked due to fuel price increases. This has a disproportionate impact on poor small-scale farmers and pastoralists who, in the face of erratic rainfall and an ongoing drought, rely on irrigation-fed agriculture powered by small diesel engines for their survival.
In Egypt, prices of wheat and sunflower oil have escalated due to Egypt’s reliance on Russia and Ukraine for 85 percent of its wheat supply and 73 percent of its sunflower oil.
In Lebanon, 22 percent of families are food insecure and food shortages or further price hikes will exacerbate an already desperate situation. The country imports up to 80 percent of its wheat from Russia and Ukraine, but can only store about one month’s worth of the crop at a time due to the blast in Beirut’s port in 2020 that destroyed the country’s major grain silos.
Central Asian countries that rely on remittances sent home by migrant workers in Russia have been hit hard by the devaluation of the Russian ruble. In Kyrgyzstan, for example, remittances make up more than 31 percent of the GDP, the majority of which comes from Russia. Remittances are crucial for migrants’ families in rural areas to access food, education and other necessities.
IFAD’s experts stress that small-scale producers are already reeling from the impacts of the COVID-19 pandemic, droughts, cyclones and other natural disasters. Their incomes are expected to be affected by the rising cost of inputs, reduced food supplies and disrupted markets. This is also likely to have devastating and long-term impacts on their nutrition and food security.
“IFAD is committed to increasing the resilience of the world’s poorest rural people who are critical for producing a third of the world’s food. We must do all we can to ensure they have the resources to keep producing food and be protected from additional shocks,” said Houngbo. “In the short-term, however, it will be difficult to mitigate the global impacts of this crisis. I join the UN Secretary-General’s call to end the conflict now and restore peace. It is the only solution to avert global catastrophe.”
http://www.ifad.org/en/web/latest/-/impacts-of-ukraine-conflict-on-food-security-already-being-felt-in-the-near-east-north-africa-region-and-will-quickly-spread-warns-ifad/ http://www.wfp.org/stories/ukraine-war-more-countries-will-feel-burn-food-and-energy-price-rises-fuel-hunger-warns-wfp http://www.ids.ac.uk/opinions/why-russias-war-on-ukraine-poses-a-risk-to-global-food-security/ http://www.theguardian.com/global-development/2022/mar/17/hungry-starving-aid-agency-face-dilemma-ukraine-yemen-ethiopia-sudan http://www.ohchr.org/en/press-releases/2022/03/ukraine-un-expert-warns-global-famine-urges-end-russia-aggression http://www.ipsnews.net/2022/04/rising-food-prices-global-risks-vulnerabilities/
Ukraine crisis will worsen global hunger. (New Humanitarian)
From higher prices in nations already struggling with hunger crises – such as Yemen and Lebanon – to reduced harvests in disaster-prone Bangladesh, the food impacts of Russia’s invasion of Ukraine will likely be long-lasting and felt across continents, economists and aid officials warn.
Particularly concerning, they say, is that they’re coming on top of fast-rising global food prices – now at their highest levels in a decade – and with supply chains already stressed as a result of the COVID-19 pandemic and years of growing climate impacts.
Ukraine, often called the breadbasket of Europe, is home to a third of the world’s most fertile soil. It is also a world leader in the production of sunflower oil, barley, and maize, and – together with Russia – provides a third of global wheat supplies.
The invasion has come “just as the growth and planting season starts” in Ukraine and Russia, said Thomas Olholm, a regional food security adviser for the Norwegian Refugee Council (NRC). “Many fields in Ukraine will not be maintained or planted. Many agricultural smallholders will be affected and lose their livelihoods for a period of time, or permanently.”
Beyond the unfolding humanitarian crisis for Ukrainians, the wider fallout – from regional port closures, large-scale displacement within and out of Ukraine, and crippling economic sanctions on Russia – could be far-reaching and devastating, especially for poor consumers in countries dependent on food imports, according to experts.
Encompassing Ukraine, Bulgaria, Romania, and parts of Russia and Turkey, the broader Black Sea region “is critical for the food security in the Mediterranean area but also in the Middle East and North Africa, western Asia, and up to Pakistan,” David Laborde, senior research fellow at the Washington DC-based International Food Policy Research Institute (IFPRI), told The New Humanitarian.
Preventing the humanitarian crisis in Ukraine from setting off a full-blown global food crisis will require channelling more funds into food assistance in the countries likely to be hardest hit, as well as ensuring that the sanctions imposed on Russia do not affect the countries relying on the Russian economy to feed their citizens, experts said.
“Governments need to do everything in their power to ensure food security for Ukrainian citizens, and step up social protections to insulate vulnerable people from rising food prices,” said Olivier De Schutter, co-chair of the International Panel of Experts on Sustainable Food Systems (IPES-Food) and the UN’s special rapporteur on extreme poverty and human rights.
De Schutter said the crisis calls for a re-think of current food production and consumption models. “To build resilience to these shocks, countries ultimately need to reduce their dependence on imports of just a few key agricultural commodities, by diversifying their own local food production and food supply chains,” he told The New Humanitarian.
Impacts on many levels
Jan Douwe van der Ploeg, emeritus professor of rural sociology at Wageningen University in the Netherlands, said the impacts of the invasion will be felt across a spectrum of settings, with effects ranging from the problematic to the disastrous.
Firstly, poor people who generally spend a considerable percentage of their income on food will now find themselves even more stretched. Secondly, although it’s difficult to draw a straight line, Van der Ploeg suggested that rising food prices – layered on top of other economic, social, and political frustrations – could help fuel social unrest, as happened across the Arab world in 2011.
“Thirdly, there are war-stricken areas and countries, like Yemen, eastern Africa, the north of Mozambique, Mali, and Myanmar,” he said. “Here, the combination of violence, hunger, and little or no possibilities to intervene with humanitarian help will be disastrous.”
There could also be longer-term impacts on agricultural productivity due to a lack of fertilisers, warned IFPRI’s Laborde.
Russia is one of the world’s largest suppliers of fertilisers and related raw materials, including natural gas, potash, and ammonia. Belarus, a key Russian ally, accounts for an additional 16 percent of global market share of potash exports, he added. Fertiliser was already in short supply, and costs were soaring, even before the latest crisis.
If fertiliser shortages continue in 2022, it spells trouble for 2023, especially in countries such as Bangladesh, which buys large amounts from the Black Sea for its smallholder farmers, according to Laborde.
Higher costs will lead to less fertiliser use, resulting in lower yields for staple crops such as rice, impoverishing farmers and turning them from net sellers of rice to net buyers, he said, adding: “All these shocks can bring people closer to the cliff.”
‘Food poverty’ in the Middle East
Parts of the Middle East and North Africa are expected to be hit particularly hard by the knock-on effects of the Russian invasion. Drought-affected countries in the region were expected to import record amounts of wheat this year. But these plans are likely to unravel as a result of the Ukraine situation.
Hunger levels in the Middle East and North Africa have already more than doubled since two decades ago, according to the UN’s latest regional overview. In 2020, there were 69 million hungry people in the region, up more than 90 percent since 2000. The latest figure is “close to the peak of 2011 when the region suffered from a major shock due to uprisings”, the report added.
“For some countries in the Middle East region, this conflict could drive millions of people into food poverty,” warned Abeer Etefa, senior spokesperson for Middle East & North Africa for the World Food Programme (WFP).
In particular, countries such as Iraq, which has one of the world’s largest government-run food programmes, and Yemen – which imports 90 percent of its food needs (and half of its wheat from Ukraine and Russia) – face higher costs and worsening food insecurity, she said.
Lebanon, meanwhile, relies on Ukraine for up to 60 percent of its wheat and has only about a month’s worth of reserves, the country’s economy minister has said.
“We don’t have enough food now [in the Middle East]. This is going to compound the situation,” David Beasley, WFP’s executive director, said. “It is going to be, and it is, catastrophic.”
Meanwhile, climate change is affecting food production around the world, too.
In Latin America, where hunger has been rising faster than anywhere, the La Niña weather phenomenon has significantly reduced soybean returns, while droughts have slashed wheat harvests in Iraq, Syria, and other parts of the Middle East, according to IFPRI’s Laborde.
Food production in Europe is also heavily dependent on imported fertiliser, natural gas, and animal feed from Ukraine and Russia, according to EU officials and parliamentarians. For example, 22 percent of corn imported to Spain comes from Ukraine.
“European countries, too, will not be spared – especially by rapidly escalating energy prices that will drive up the cost of basic food commodities,” said Gabriel Ferrero, chair of the Committee on World Food Security (CFS), a top-level UN forum. “This is not just a problem between Russia and Ukraine; it is a problem for all of us, worldwide.”
Time to change the system?
Yet the current crisis is not a surprise, and governments and donors could have been better prepared, said Olholm from the NRC. “All signs were indicating an armed conflict. It was predictable,” he said. “Prepositioning of critical and lifesaving inputs/assets could have been put in place if there was a will to do it and not least fund it.”
For Van der Ploeg, “the fact that most countries in the world depend on food imports for feeding their population” has created “a web of dependencies”.
“This web is basically controlled by a small set of large and powerful food empires,” he said, adding that “food sovereignty comes to the fore as the most important beacon for agricultural and rural development policies” in the future.
Edward Davey, international engagement director of the Food and Land Use Coalition (FOLU), said the Russia-Ukraine crisis – as well as the latest findings of the world’s top climate scientists – both point to the need for a global structure “where nations could come together at the highest level to predict and forestall, and improve the resilience of the food system”.
“I’d like to call for global efforts to try and get ahead of the next 10 crises, conflict, COVID, inequality, climate, vis-a-vis the food system,” he said.
14 Mar. 2022 (FAO)
The world is facing a potential food crisis, with soaring prices and millions in danger of severe hunger, as the war in Ukraine threatens supplies of key staple crops, the UN Food and Agriculture Organization has warned.
Maximo Torero, the chief economist at the FAO, said food prices were already high before Russia invaded Ukraine, owing to the effects of the Covid-19 pandemic. The additional strain of war could tip the global food system into disaster, he warned.
“We were already having problems with food prices,” he told the Guardian in an interview. “What countries are doing now is exacerbating that, and the war is putting us in situation where we could easily fall into a food crisis.”
Wheat prices hit record highs in recent days, though they have fallen back slightly. Overall, food prices have been rising since the second half of 2020, according to the FAO, and reached an all-time high in February, after wheat and barley prices rose by nearly a third and rapeseed and sunflower oil by more than 60% during 2021. The price of urea, a key nitrogen fertiliser, has more than tripled in the past year, on rising energy prices.
At least 50 countries depend on Russia and Ukraine for 30% or more of their wheat supply, and many developing countries in northern Africa, Asia and the near east are among the most reliant.
Poor countries are bearing the brunt of the price increases. Many of the poorest countries were already struggling financially, with some facing debt crises, amid the pandemic.
“My greatest fear is that the conflict continues – then we will have a situation of significant levels of food price rises, in poor countries that were already in an extremely weak financial situation owing to Covid-19,” said Torero. “The number of chronically hungry people will grow significantly, if that is the case.”
The Covid-19 pandemic has reduced developing countries’ capacity to cope said Torero. The war in Ukraine presents multiple threats to food security that will be felt across the world, according to the FAO.
* The importance of Ukraine and the Russian Federation for global agricultural markets - FAO Market/Risk analysis (40pp): http://bit.ly/3t2HyM2
Mar. 2022 (WFP)
“In a year when the world is already facing an unprecedented level of hunger, it’s just tragic to see hunger raising its head in what has long been the breadbasket of Europe,” said WFP Executive Director David Beasley during a visit to a staging hub set up by the organization on the Polish-Ukrainian border. “The bullets and bombs in Ukraine could take the global hunger crisis to levels beyond anything we’ve seen before.”
With reports coming in of severe shortages of food and water in Kyiv, the capital, and the northeastern city of Kharkiv, WFP teams are setting up operations and hubs in countries neighbouring Ukraine. These will both facilitate delivery of food assistance into the country and assist refugees coming over the borders.
The immediate priority is to establish a food lifeline into Kyiv and other conflict hotspots. With consignments of food assistance arriving every day, WFP is in a race against time to pre-position food in areas where fighting is expected to flare.
The Russian Federation and Ukraine are responsible for 29% of the global wheat trade. Any serious disruption of production and exports from the region could push food prices beyond their current 10-year highs. This will erode food security for millions of people, especially those who are already under stress because of high levels of food inflation in their countries.
“This is not just a crisis inside Ukraine. This is going to affect supply chains, and particularly the cost of food,” Beasley warned. “Now we’re looking at a price hike that will cost us, in operational costs, anywhere from 60 and 75 million dollars more per month. And that means more people are going to go to bed hungry.”
At the start of 2022, the world is facing an unprecedented hunger challenge, as conflict and climate shocks compounded by COVID and rising costs drive millions of people closer to starvation -- threatening to increase migration and instability globally. With the numbers of hungry rising, WFP is calling for a step-change in global support for its operations.
http://www.wfp.org/stories/ukraine-war-more-countries-will-feel-burn-food-and-energy-price-rises-fuel-hunger-warns-wfp http://docs.wfp.org/api/documents/WFP-0000137512/download/ http://www.wfp.org/news/wfp-ramps-food-operation-ukraine-and-warns-worlds-hungry-cannot-afford-another-conflict http://reliefweb.int/report/world/impact-conflict-ukraine-global-food-security http://www.ipsnews.net/2022/03/war-ukraine-poised-threaten-global-food-security/ http://www.theguardian.com/food/2022/mar/09/ukraine-war-piles-pressure-on-global-food-system-already-in-crisis
Ripple effects of the Ukraine crisis on children around the world - Save the Children
The global reliance on Russia and Ukraine's wheat supply -- making up more than a quarter of the world's wheat in 2019 -- could end up cutting off this staple to populations in already fragile contexts, such as Yemen and Lebanon, and driving prices to skyrocket. In Lebanon, up to 80% of wheat imports come from Russia and Ukraine.
The world is already facing the worst global hunger crisis this century, with an estimated 45 million people across 43 countries at risk of famine, up from 27 million in 2019. This is having a disastrous impact on children, who are always the most vulnerable in a food crisis. In 2020, almost 50 million children under the age of five were acutely malnourished.
Save the Children said that an immediate end to violence in Ukraine would not only protect children in the country but also prevent the deterioration of an already catastrophic situation for children and families beyond Europe who depend on exports for survival.
Global - in particular, European - reliance on Russian oil and gas has come into sharper focus, as the cost of Brent crude oil has surged to its highest level since 2012, and natural gas contracts have risen by an incredible 35%. Europe is reliant on Russia for 40% of its natural gas supplies.
Save the Children has already warned that these rising prices will add to the already escalating cost of living crisis in many countries.
Dan Paskins, Director of UK Impact at Save the Children, said: "The prospect of energy price rising even more than has already been forecast is incredibly worrying for households on low incomes. Millions of parents will be wondering how they will be able to keep their families afloat in the months ahead.
"We're already seeing families having to make impossible choices between heating their homes and feeding their children. Parents we work with say they just don't know what they're going to cut back on next. A further increase in energy bills will leave even more children going to bed hungry."
* FAO Food Price Index rises to record high in February.
The benchmark gauge for world food prices went up in February, reaching an all-time high, the Food and Agriculture Organization of the United Nations (FAO) reported today.
The FAO Food Price Index averaged 140.7 points in February, up 3.9 percent from January, 24.1 percent above its level a year earlier. The Index tracks monthly changes in the international prices of commonly-traded food commodities. Cereal production in the world’s 47 Low-Income Food Deficit Countries (LIFDCs) is expected to decline by 5.2 percent in the 2021/2022 season compared to 2020/2021.
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