Major topic at the G7 summit in Elmau , the food crisis is likely to worsen. This is the fear of Mathias Cormann, the Secretary General of the Organization for Cooperation and Development (OECD). “Without peace in Ukraine, global food security challenges will only get worse […] “, he indicated during the publication, Wednesday, of the report of the organization on the agricultural perspectives of the next ten years.
Russia and Ukraine are indeed among the most important producers and exporters of arable crops in the world (wheat, barley, maize, sunflower seeds and rapeseed). But the war upsets this architecture.
In Ukraine, sowing of the 2022 spring crops, which is nearing completion, shows levels that are expected to be around 20% lower than last year, in particular for sunflower seeds, maize and spring barley. Overall, a lower harvest is expected.
The OECD suggests reductions of more than 30% compared to the 2021 harvest. Production will nevertheless exceed national needs. However, exports will be difficult. The sea route is excluded for the moment. And the other export channels ‒ roads, rails and river ports ‒ do not have the capacity to handle the same quantities. As a result, current exports can only reach 20% of normal export quantities.
🌾What could be the evolution, in the coming 🔟 years, of national, regional & global markets for agricultural, fisheries & aquaculture products❓
— OECD (@OECD_fr) June 29, 2022
On the Russian side, the 2021 wheat harvest was below average due to unfavorable weather conditions during the growing season. And Moscow restricts its wheat exports.
The impact on prices
Therefore, different scenarios are considered by the OECD. According to his calculations, the complete loss of Ukraine’s export capacity would lead to a 19% increase in the world price of wheat. In an extreme scenario where Russia and Ukraine jointly exported 36 million fewer tons of wheat, wheat prices would increase by more than a third of what they would have been without the conflict.
In a separate analysis, the OECD predicts an increase in undernourishment of around 1% globally in 2022-2023, or the equivalent of 8 to 13 million people depending on the extent of the reduction in Russian and Ukrainian exports. In the worst-case scenario, the Director-General of the Food and Agriculture Organization (FAO), Qu Dongyu, warned that “an additional 19 million people could find themselves in a state of chronic undernourishment. in 2023”.
Productivity in question
What is worse is that this conflict in Ukraine is taking place in an already fragile global context. World population is expected to increase from 7.8 billion people in 2021 to 8.6 billion in 2031. Sub-Saharan Africa, India and the Near East and North Africa would be responsible for two thirds of this increase. As a result, global food consumption is expected to increase by 1.4% per year over the next decade.
Over the same period, world agricultural production is expected to increase by 1.1% per year, with the increased production expected to come mainly from developing and poor countries. With the war in Ukraine, a prolonged rise in the prices of energy and agricultural inputs – such as fertilizers – would increase production costs and limit productivity and output growth in coming years, the EU fears. organization.
However, for her, average agricultural productivity will have to increase by 28% over the next decade if the international community is to achieve one of the sustainable development goals it has set itself, namely the eradication of hunger. in the world. This is more than three times the increase in productivity recorded over the past decade. The bet is far from won. Especially if the war drags on like most military experts predict.