2023-Public-Sector-Perspectives

A perfect storm According to a special United Nations task force created in early 2022 to address rising food insecurity, more than 60 countries around the world are struggling to afford agricultural imports. A so-called “perfect storm” — driven by a variety of short and long-term factors — has hit the global food system. These challenges threaten to undermine decades of progress in the fight against malnutrition. 1. The impact of war in Ukraine Russia’s invasion of Ukraine in February 2022 has put global food systems under severe strain. Wheat exports from Russia and Ukraine accounted for 25% of the world’s total food exports before the invasion, making them a key part of the global breadbasket. The impact of the war on agricultural markets is expected to continue next year, regardless of whether the conflict remains ongoing. In Ukraine, farmers have nowhere to store their 2022 harvest, which may lead to the spoilage of grains. Meanwhile, Russia is unable to access supplies of the seeds and pesticides that it usually buys from the European Union; the country may continue to be subject to sanctions in the medium term even if fighting ceases. It is important to note that while the war in Ukraine has intensified challenges facing the food sector, many of today’s problems predate the invasion. 2. Fertilizer crisis In 2021, sanctions were imposed on Belarusian potash exports, which at that time accounted for 20% of the global market. Russia, the world’s largest exporter of fertilizer, unilaterally began to restrict exports in November 2021. The result was a near tripling in fertilizer prices during that year. Following Russia’s invasion of Ukraine and the imposition of sanctions, Russian fertilizer exports were cut by 40% while further restrictions were placed on Belarusian potash given its role in supporting Russia’s war efforts. 2020 2019 2018 2016 2014 Severe Food Insecurity Moderate Food Insecurity 8.3 14.3 22.6 8.3 15.3 23.6 9.6 16.3 25.9 10.1 16.5 26.6 11.9 18.5 30.4 2020 2019 2018 2016 2014 17.7 29.6 47.3 19.8 31.1 50.9 20.6 32.0 52.6 21.9 32.3 54.2 25.9 33.7 59.6 2020 2019 2018 2016 2014 7.7 11.5 19.2 6.9 12.0 18.9 8.6 13.6 22.2 9.0 13.7 22.7 10.2 15.7 25.9 2020 2019 2018 2016 2014 7.7 17.2 24.9 9.0 22.3 31.3 9.6 22.0 31.6 10.1 21.9 32.0 14.2 26.7 40.9 2020 2019 2018 2016 2014 7.9 9.3 7.5 8.8 6.6 7.6 6.6 7.6 7.4 8.8 70 60 50 40 30 20 10 0 World Africa Asia Latin America & the Caribbean North America & Europe Figure 1: Moderate or severe food insecurity has been climbing slowly for 6 years and now affects more than 30% of the world’s population 22 Emerging Markets Need Food Crisis Support and Long-Term Solutions