Indonesian Finance Minister Sri Mulyani Indrawati delivers a speech during the opening of the meeting of the Group of 20 Finance Ministers and Central Bank Governors in Nusa Dua on the Indonesian resort island of Bali July 15, 2022.
Senegalese Economy Minister Amadou Hott has urged the global food industry not to boycott trade in Russian and Ukrainian food products as the food crisis rages on in vulnerable countries.
Speaking at the Group of 20 financial leaders meeting in Bali last week, Hott said that without an immediate solution, the crisis – which brings with it both food shortages and high prices – would kill more people “than it did in the days of Covid”.
The war has resulted in many countries such as the US and those of the European Union sanctioning the use or trade of Russian goods. But while staples like groceries and fertilizers are exempt from these sanctions, grocery sectors are preemptively avoiding these transactions to protect themselves, Hott added.
“We understand that food and fertilizer are exempt from sanctions. However, market participants, whether retailers, banks or insurers, are reluctant to participate if the products come from certain locations because they fear sanctions in the future,” he said.
“Can you say, whenever you buy fertilizer, food from Russia or from Ukraine or from anywhere in the world, there are no sanctions today, no sanctions tomorrow… so that we can stabilize the market?”
“We are not responsible for this crisis, we are [Africa] Suffer.”
Food security and rising food prices dominated discussions at last week’s G-20 meeting as disruptions caused by the pandemic and war in Ukraine upended food supply chains around the world.
Food inflation and shortages were already increasing before the war. But since Russia and Ukraine are two of the biggest exporters of staples like wheat, the war has exacerbated those problems in countries like Africa and the Middle East.
The problem is acute for African countries, which account for a third of the world’s people suffering from malnutrition, Hott added.
Africa, for example, is short of about 2 million tons of fertilizer this year, which equates to a $11 billion loss in food production that year, he said.
When Africa and other countries can no longer rely on food imports, investments are needed to accelerate local food production.
“Like in Covid times, the world came together and made extraordinary decisions in a very short time,” he said.
“All partners have changed procedures and policies to really meet the challenge. Like the IMF, World Bank and ADB, they all changed their policies to help countries.”
“It’s the same this time. If we don’t get fast, we’ll have more victims than we did during the Covid times,” he added.
Worse, it will cost governments more money to buy food supplies and provide aid to the population at a time when interest rates are rising, Hott said.
A bleak picture for poor countries
Fighting for scarce food supplies also means poorer countries will miss out, World Trade Organization director-general Ngozi Okonjo-Iweala said during the same discussion at the G-20 meeting.
“Amid intense competition for food and essential inputs such as fertilizer, there is a risk that supplies will be diverted from poorer countries to richer ones, repeating the experience with Covid-19 vaccines,” she said, urging countries to work together rather than against each other to solve the food crisis.
The G-20 must lead by example, urging other countries to avoid counterproductive measures such as stockpiling food and essential supplies and imposing export restrictions that “could distort markets and drive prices further up,” US officials said. Treasury Secretary Janet Yellen same discussion.
The statistics paint a bleak picture, the Food and Agriculture Organization also said during the same discussion.
FAO Director-General Qu Dongyu said the FAO’s food price index has hit an all-time high and recommended a four-point plan with more investment in the hardest-hit countries.
Kristalina Georgieva, executive director of the International Monetary Fund, said the G-20 countries need to dig deep and find better solutions.
“We must use all our capacities against trade restrictions and raise our collective voice that not only is it immoral but also harmful when food does not get where it needs to go,” she said at the same session.
“We want international food supplies to increase, including negotiations to get grain from Ukraine to where it’s needed, and we need to support food production, storage and distribution.”
During the G-20 meeting, Georgieva, Qu of the FAO, Okonjo-Iweala of the WTO, as well as World Bank Group President David Malpass and World Food Program Executive Director David Beasley issued a joint statement urging global Called for action against the food crisis.
“By June 2022, the number of people with acute food insecurity whose access to food is so limited in the short term that their lives and livelihoods are at risk,” the statement said.
Not just the war and Covid
But Georgieva also warned the world community not to blame the food crisis solely on current challenges such as the war or the pandemic.
Climate change has also contributed to the problem over time.
“The current crisis existed before the war. Why? Because of climate shocks that dramatically reduced food production in many places,” she said.