Avoiding hunger and increasing food security

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Credit: EBRD
  • Opinion by Vanora Bennett (London)
  • Inter Press Service

The war has obscured this image beyond recognition.

Despite the conflict, Ukrainian farmers still grow grain at a level estimated at about three quarters of a normal year. But with Russia blocking ports on the Black Sea through which Ukraine would usually export about 5 million tons a month, the country is now struggling to get just 2 million tons a month westward through clogged roads, rail and river routes.

This is an existential problem not only for Ukraine, whose grain exports are one of the biggest contributors to its economy, but also for the millions of people worldwide who would normally import and eat this grain. The World Food Program (WFP) says as many as 47 million people, mostly in sub-Saharan Africa, are at risk of acute hunger.

Addressing this food security risk is a dual challenge for the European Bank for Reconstruction and Development (EBRD), which works in Ukraine and its war-affected neighboring countries, as well as countries in the southern and eastern Mediterranean struggling to secure food. import.

In Ukraine, 18 million tons of grain from last year’s harvest are in silos waiting for export. Space is scarce and the shortage is increasing. The numbers get even more staggering when you add in the winter wheat and barley crops that are being harvested now, and the spring crop including sunflower and corn that will also be lining up in a few months.

“The biggest problem is the storage of the grain. There is some warehouse and silo capacity available, but not enough for the harvest now taking place. We’ve been told they are missing 15 million tons of capacity even before the spring harvest comes in two months,” said Jean-Marc Peterschmitt, EBRD’s director for Industry, Trade and Agribusiness. “It’s not clear how it will play out.”

“For now, the only solution is temporary storage – silo bags or floor storage or even field storage with some basic covers, which will obviously deteriorate the quality of the grain,” said Natalia Zhukova, EBRD director, Agribusiness. “Silo bags can maintain quality for about 12 months because they are hermetically sealed so that infections or pests cannot develop inside. But simple silos without proper drying or ventilation will of course have problems.”

“Getting grain out of the field and being able to store the crop in the field are the mirror image of each other because whatever you get frees up storage capacity for the next crop,” adds Peterschmitt. “It hasn’t been a great experience so far to get it out. But it’s essential to find more ways to do that.”

As the amount of Ukrainian crops waiting to be exported and potentially rotting in silos and fields grows, hopes grew that Ukraine could soon resume exports in something like their usual quantities last week when a tenuous UN brokered deal to lift the blockade on the main Ukrainian port of Odessa was agreed in Turkey on July 22.

Less than 24 hours later, however, Russian cruise missiles hit Odessa. US Secretary of State Antony Blinken, who said the attack cast serious doubts on the credibility of Russia’s commitment to the deal, accused Russia of “starving Ukraine of its economic vitality and the world of its food supply.”

But on July 25, Ukraine said it still hoped to implement the agreement within a week, and was making preparations, including demining essential sea areas and establishing naval corridors for the safe passage of merchant ships and a coordination center in Istanbul.

But for now, amid the uncertainty, it is once again working within the confines of wartime.

Within Ukraine, a significant portion of the €1 billion in EBRD investment pledged for this year will support domestic food security. As part of the EBRD’s Resilience and Livelihoods Framework (RLF), a €200 million multi-instrumental food security guarantee works across the food chain in Ukraine, both to help farmers buy fertilizer and retailers to get food into stores.

And there are other, smaller, freight transport options from Ukraine for grain exports if access to the Black Sea ports continues to be blocked. The Danube River, whether in Ukraine or neighboring Moldova or Romania, could be an option.

Transhipment at the Giurgiulesti port on the Danube in Moldova has already doubled by 2022. Another possibility is to support improvements in road and rail exports to move more freight over land.

In the Southern and Eastern Mediterranean region (SEMED), where the EBRD is also active, all countries are now dependent on imports to make sufficient food energy available domestically. The dependence on Russian and Ukrainian grain is unusually high.

Food prices are currently unprecedentedly high, making purchasing scarce imports from elsewhere ruinously expensive.

As the UN Food and Agriculture Organization senior economist Katya Krivonos told a panel discussion at the EBRD annual meeting in May, Egypt, which has 5.4 million malnourished people, usually gets more than 40 percent of its calorie intake. import from Russia and Ukraine.

“Due to the climatic conditions in SEMED, they cannot really grow grain. In dry countries, the question is how we can become food-safer in a more sustainable way in the longer term. We are looking for ways to help these countries find the raw materials they need,” said Iride Ceccacci, head of Agribusiness Advisory at the EBRD.

In this region, the Bank aims to expand its agribusiness and food security work beyond its current focus on the private sector to support SEMED countries in securing grain imports in this context of unprecedentedly high prices.

In Tunisia, 50 percent of all food calories are imported. Jordan imports about 90 percent of its wheat and barley, which are essential commodities and water-intensive crops to produce. Morocco, which is generally less dependent on imports, is facing one of its worst droughts in decades.

In May, the EBRD joined forces with other international financial institutions – the Asian Development Bank (ADB), the African Development Bank (AfDB), the International Fund for Agricultural Development (IFAD), the Inter-American Development Bank (IDB), the International Monetary Fund (IMF) and the World Bank Group – to develop an IFI action plan to tackle food insecurity.

“People at SEMED are very frustrated that they have emerged from the COVID-19 pandemic, coping with great resilience, and looking forward to positive growth.

But instead they are now getting this huge new hit, mainly from high food prices, but also high energy prices, which will affect fertilizer prices and thus will also have an impact on domestic food production,” said Heike Harmgart, Managing Director, SEMED, at the EBRD.

She adds: “Now the middle class people in Egypt buy less meat because food price inflation in the supermarket has been so high. And governments are concerned because high food prices were one of the causes of the Arab Spring in 2011, and there is a very clear link between political unrest and high bread prices.”

“What everyone wants to avoid is social unrest. The EBRD has been working on urgent food security projects to support SEMED countries, with a first transaction now approved by the Council for Tunisia. These investments include technical assistance designed to promote sustainable solutions for grain supply chains in the region.”

Gérald Theis, chairman of CereMed UK Ltd, a major grain merchant, vividly describes how he worked first on the supply problems of the Covid era, which increased prices and the threat of protectionism, and then the war on Ukraine, which began on February 24. .

“February 24 was like 9/11, or a tsunami,” he told the food security panel at the EBRD annual meeting. “We haven’t slept much for a while. In eight days, we saw a movement of almost US$200 a ton – a 160 percent increase in percentage.”

When asked about his sense of where food security would go next season, he replied: “I’m sorry to say I don’t know, if we’re talking about the long term. Today I would say a day is like a month before. No one knows when this war will end or how it will end.”

“Even if it stops tomorrow, we traders don’t think things will go back to normal – there are too many problems with logistics, broken bridges and railways, silos and sanctions. In this environment, we think prices will remain at a high level and it will be extremely volatile.”

Source: EBRD

Vanora Bennett is EBRD Green spokeswoman / Ukraine, Moldova, Romania, Georgia and Armenia

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© Inter Press Service (2022) — All rights reservedOriginal source: Inter Press Service





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