The world is more connected than it has ever been. Global trade reached a record high in 2021, and global tourism peaked in 2019 before the COVID-19 pandemic. Interconnectivity provides many economic benefits to the world, but it also means that local issues can become global issues. Because of the concentrated nature of food production, this is especially true for food supply lines.
Wheat Crisis Throughout the World
Prior to the Russo-Ukrainian War, the two countries supplied 30% of global wheat and barley supplies. This supply accounted for more than half of 36 countries’ wheat imports. Because of the devastation in Ukraine, not only is wheat and barley production suppressed, but the cost of obtaining the remaining supply has skyrocketed. Due to the impending danger, insurance premiums for vessels transiting the Black Sea have also risen, significantly increasing the cost of transportation for receiving countries.
Because of the insecurity and rising costs of receiving wheat and barley from this region, many countries have turned to other countries for imports, such as Canada or Australia, though these can be just as expensive, if not more so, due to the greater distance, according to the United States Institute of Peace (USIP). In many countries, this has resulted in food scarcity and rising food prices.
Globally, 40 million people could be pushed into poverty, and 20 million people in the Horn of Africa could face starvation by the end of the year. To counteract this, the G-7 leaders have pledged $4.5 billion in short- and long-term aid to address global food insecurity, as part of a total pledge of $14 billion this year.
In the short term,
The majority of the $4.5 billion in aid will be used to address short-term food insecurity issues. According to The New York Times, the United States has pledged $2.7 billion in total funding, with $2 billion going to direct humanitarian intervention. This aid will go to the countries and regions most at risk of starvation and poverty.
According to The New York Times, G-7 leaders are also desperately trying to get grain out of Ukraine by convincing Russia to lift its port blockades. Unfortunately, sanctions appear to have had no effect on Russia at this time. G-7 leaders are still trying to find solutions, but no plans have been made public.
In the Long Run
The remaining $760 million in aid will be used to improve food delivery systems in the United States. These fixes are intended to improve the stability of food supply lines in the coming years. According to The New York Times, this investment will support existing projects created by 47 countries and regional organizations determined to address growing needs across multiple regions.
This may have had a positive impact during the Russo-Ukrainian War, but the majority of its impact is likely to be felt during the next food security crisis. “Shocks like the war in Ukraine put into stark relief that food insecurity challenges are not always related to availability issues,” writes Dr. Arif Husain, Chief Economist of the World Food Programme, in his USIP article. It’s more a matter of accessibility and affordability.”
Addressing global food insecurity will take time. Addressing underlying supply chain issues is a priority in the fight against food insecurity. Of course, the $4.5 billion in aid pledged by G-7 leaders will help to alleviate the immediate suffering of an estimated 323 million people, but leaders must look for a long-term solution to prevent this from happening again.
Fortunately, it appears that this pledge has taken this into account. This will not be the world’s last crisis, but by investing in struggling food delivery systems, the next one may not threaten as many lives.
Original article was published in Borgen Magazine.
