Today, growing food insecurity is emerging as a major concern after two years of coronavirus-induced uncertainty, coupled with the ongoing Russia-Ukraine war; disrupting economic supply chains, leaving agriculture production in haywire, and largely affecting livelihoods.
Even as the agricultural activities were reported to have been least affected during the covid-induced lockdowns, the food production came under severe stress following the steep rise in crude oil prices.
This directly impacted the cost of energy, pesticides and fertilizers and pushed the farmers on the back foot. The Russia-Ukraine armed conflict choked the channels of food supply and further aggravated the shortage of food items across geographies.
Apart from this, it’s the continuing climate change around the globe which has further impacted agriculture production. As rightly picked by the analysts having a close eye on the growing food insecurity, the major players in wheat production, China and India, faced weather vagaries.
China’s production received jolt due to untimely rains, while India was hit by a never-seen-before heat wave. If heavy rains spoiled wheat production in China, it was insufficient rain that badly hit the production of wheat in the US and France.
African belts too witnessed drought and this led to dwindled production of wheat and maize. Data from reliable sources reveals that globally the wheat is today sold 60% higher than the normal price and this price escalation is majorly going to hamper access to food for tens of millions of people falling in the economically poor category.
Sharp rise in cost of energy, fertilizers and pesticides will obviously squeeze profit margins and at the same time, their use will be minimized. This will lead to lower agricultural yields. In the end, the crisis will prove a tsunami for agriculturalists, particularly poor farmers in countries like India, Pakistan, Bangladesh and other geographies in the vicinity.
This entire situation loudly sounds that a global food shortage is not far away. Here, a hair-raising statement from the United Nations’ Secretary General, Antonio Guterres, is worth mentioning.
He said, “Global hunger levels are at a new high. In just two years, the number of severely food insecure people has doubled from 135 million to 276 million. The present situation threatens to tip tens of millions of people over the edge into food insecurity, followed by malnutrition, mass hunger and famine, in a crisis that could last for years.”
In the context of growing food insecurity, the statement of Nomura’s Holdings Inc. also merits a mention: “Asia’s red-hot food prices will likely heat up further in the coming months.
The inflation is already spreading beyond cereals and edible oils to other categories like meat, processed food and even dining out.” Notably, amid an unprecedented surge in wheat prices, the Indian government had imposed a ban on wheat exports on May 13 to bring stability in the prices and ensure food security. Nomura has picked India’s food inflation at 9.1% due to rising feedstock costs.
Meantime, amid the rising cost of wheat to uncomfortable levels, it’s the price of rice which has maintained stability, so far. Since rice is considered the most important grain for human consumption in Asia, the stability in the price of rice for now is to be relished.
However, a unique situation in the context of rice consumption is on cards. There is every possibility of a shift in consumer behavior. Most of the analysts are showing their apprehension of the chances of consumers shifting to rice in a bid to opt for cheaper food options.
In this kind of situation, price rise in rice is inevitable. Even as stocks are plenty, the shift of consumers from wheat to rice for consumption can trigger price rise to unprecedented levels and there will be a run on the stockpiles.
Here experts call this substation situation scary as it is loaded with further broadening of food price inflation. Here again, Nomura’s outlook on the situation is worth quoting:
“If rising wheat prices lead to substitution towards rice, this could lower existing stocks, trigger restrictions by key producers for domestic food security reasons and lead to higher rice prices over time. World rice exports, at 52.6mn tonnes in the latest season, were only 10.3% of total rice production (512.8mt); so a restriction by any one exporter can have an outsized impact on world rice markets.”
If the public consumption shifts from wheat to rice, there are chances to witness export of rice controlled in India, the way export of the wheat and sugar has been handled. Remarkably, India is the biggest exporter of rice. Presently, as per the reports, India’s rice exports account for almost 41% of global shipments.
To be precise, food insecurity is going to be one of the biggest challenges to confront in the coming times owing to the kind of economic upheaval triggered by the virus and the ongoing Ukraine war.
The good thing is that the Government of India has already engaged itself on many fronts. Realigning its policies around food security, for instance bringing the exports of certain food commodities under control, indicates the government’s anticipation of a large-scale global food crisis.
The special focus needs to be on the vulnerable segment of population and bridge the gaps denying the otherwise guaranteed food security to this deserving segment of the population.
In the context of our own region (J&K), let me reiterate that we are fast losing our food resources. Uncontrolled conversion of the agriculture and horticulture land for non-agriculture purposes including setting up of commercial complexes, residential houses and colonies has come up as a serious issue.
During the last two decades, we have lost over half-a-lakh acres of agricultural land to these non-agricultural activities. This has direct bearing on our food security as this conversion of arable land is threatening our self-sufficiency in food grains.
Today, we are importing more than 40% of food grains and over 25% of vegetables to meet our requirements.
From a rural point of view, land conversion is simply loss of prime agricultural land, reduced agricultural jobs and wasted investment in irrigation infrastructure. This simply translates into dwindling agricultural production and ultimately all this leads to a threat to food security.
Precisely, in a situation like ours, where diversion of agricultural land has been serving as a direct threat to our food security, the virus and war driven economic upheavals have further complicated our food security issues. At the moment, no end to unprecedented food inflation and expensive food imports is in sight.
This situation suggests only weakening of the food security supply chain and mounting inflationary pressures as the price of food items will continue to push up considerably on a long term basis.
At the moment we cannot afford a slow response to these threats to our food security. We have to anticipate our weakening agrarian economy. Remember, we spend a major portion (up to 70 per cent) of our income on food. That means even a modest rise in food prices can turn into a life-threatening proportion.
Meanwhile, in the fight against food insecurity it is the governance mechanism which should be enabling in nature to proactively roll out the transformation pathways.
It’s the time to anticipate the threat in the right perspective, act and take the challenge head-on. Otherwise, the intensity of growing levels of food insecurity will give us a shock of the century even when a pandemic and war is not there.
(The views are of the author & not the institution he works for)
Disclaimer: The views and opinions expressed in this article are the personal opinions of the author.
The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.