Some personal background may be helpful as I write this blog for the Food Tank website in addition to my membership. I grew up on a farm in Miami County, Ohio (north of Dayton), worked in a small family-owned tomato cannery for over a decade, and then left to become an economist. I obtained a doctorate from Harvard, specializing in economic history, but I did my thesis on a more esoteric topic (estimating a probabilistic frontier production function for US agriculture). By luck and perhaps a sensitivity to food issues, I ended up as a development economist specializing in agricultural, food and nutrition issues, mainly in Southeast and East Asia. In addition to the academic part of my career spent at Stanford, Cornell, three faculties at Harvard and the University of California, San Diego, I have been deeply involved with national policymakers in Indonesia, China and Vietnam.
I have two main specialties: (1) preventing food crises by stabilizing rice prices, both in individual countries and global markets, and (2) managing structural transformation, reflecting my early experience in Asia with the changing role of rice in economies. households at different stages of development. During the historical process of structural transformation, agriculture as an economic sector plays a progressively smaller role in the macroeconomy, while becoming more productive at the farm level. Both topics present controversial policy issues for the economist profession.
To do this work, it is necessary to understand the “food systems” in which each society operates. In the February 20, 2022, New York Times Book Review of Eating to Extinction: The World’s Rarest Foods and Why We Need to Save Them, by Dan Saladino, Pete Wells, the New York Times restaurant critic, provided very little definition. flattery of “the food system”.
“What we really mean is a profit-driven corporate logic unleashed on a global scale at an incalculable cost to health, economic stability, cultural coherence and joy.”
This definition no doubt resonates with many readers of this blog, but it also resonates with someone who has tried over the past few decades to make various food systems work better for the poor. However, the definition misses essential trade-offs in these efforts, trade-offs that reflect the enormous complexity of food systems globally and locally. In the midst of a global food crisis, it is impossible to know how to successfully intervene to stop it without a clear understanding of these complexities and trade-offs.
Even against this backdrop, it seems unwise to write about the prospects for world food security in these highly uncertain times. In more than half a century of closely watching the world food economy, the future has never looked less clear. I watched the impact of consecutive monsoon failures in India in 1965 and 1966 while I was a graduate student at Harvard. I helped the Indonesian government deal with the world food crisis from 1972 to 1974, when Thailand literally closed the world rice market by banning rice exports. I helped avert a rice crisis in 1996 by showing Indonesia’s need for external supplies of rice after its Food Logistics Agency (BULOG) was unable to keep up with rice stocks in the rush to get rid of previous rice surpluses. In 2008, my colleague Tom Slayton and I helped persuade the US government to persuade a reluctant Japanese government to sell its unwanted “WTO rice stocks” imported high-quality long-grain rice from the US and Thailand to the Philippines. , who were desperately looking for rice imports (“at any price.”) Amid the obviously speculative panic in domestic and global markets, the Japanese prime minister’s June 2008 announcement that his government would begin negotiations with the Philippines to exporting that rice made the bubble burst. Within a month, rice prices had returned to normal levels as international rice farmers, traders, shopkeepers and brokers realized they were sitting on very expensive rice reserves that had suddenly lost half their value. Not a ton of Japanese-owned rice was exported, and world rice prices have remained relatively stable ever since. The lesson has been learned among the leaders of the Association of Southeast Asian Nations (ASEAN) – don’t get p and build up rice reserves.
In 2020, the COVID-19 pandemic disrupted global food supply chains, along with most other economic activities. Food prices rose steadily, but food shortages were localized and tended to occur in regions facing civil strife. The Russian invasion of Ukraine on February 24, 2022 quickly turned this localized but mostly manageable food shortage into the likelihood of global food shortages. Energy and fertilizer markets have also been hit by the war, and since February, the world food community has been on a razor’s edge trying to keep up with rapidly changing circumstances, in the war on the ground and in commodity markets around the world.
As this is written at the beginning of August 2022, what are the prospects for world food security? There are several reasons for hope.
—Indonesia is the chair of the G20 Summit in Bali in November 2022. After initially saying that the impact of the war in Ukraine on food security was not part of the agreed agenda for the Summit, the Indonesian government quickly realized that global leadership was needed to prevent countries and markets from panicking (a lesson from 2008), and is now actively leading efforts to make food security the main item in the G20 discussion and commitments;
—An agreement negotiated by Turkey and the UN between Ukraine and Russia to reopen Black Sea ports to export wheat and other agricultural commodities offers considerable hope that some supplies will reach world markets by the end of the year. Russia’s missile attacks on Odessa port facilities after agreeing to trade opening substantially increased the risks of carrying out such export operations, and great uncertainty remains about the eventual scope of agricultural exports from Black Sea ports;
— Agricultural production prospects are now better than they looked two months ago as weather in key wheat producing regions cooperated and farmers reacted to high prices. Canadian and US wheat crops appear to be recovering from last year’s severe droughts. The Chinese wheat crop is not as bad as feared in the spring, and India’s record heat wave earlier this year appears not to have hurt the wheat crop as much as was originally expected. Globally, the US Department of Agriculture (WASDE) July 2022 commodity report projected wheat exports for crop year 2022/23 at 205.5 million tonnes, a significant increase from 2020/21 and 2021/22.
Why to worry? Prices for wheat, vegetable oil, fertilizers and energy remain markedly higher than before the COVID-19 pandemic. These high prices place a huge burden on poor countries and poor families who need to buy their food from global and local markets. In some ways, the world is lucky to have avoided a significant food shortage, but now the problem is largely financial. The global actors needed to solve these financial problems are different from those needed to solve physical food shortages, but active global cooperation will still be needed to prevent famine and famine.
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Photo courtesy of Raul Gonzalez, Unsplash
