Ukraine war, food insecurity and the need to restore market confidence with information transparency

According to IRNA on Monday, the wars are generally considered a threat to food security in the affected areas, but the war between Ukraine and Russia, both important producers and global exporters of grains and oilseeds, caused a serious food crisis in the world. . The crisis occurred in developed or developing countries in the form of rising grain prices, but created a worrying situation for poor countries in need of help from international organizations.

News Network “R. ت. B. In an interview with Olivier de Schutter, a former international law professor and current United Nations Special Rapporteur on food law, Belgian F. looks at the issue from the perspective of extreme poverty and human rights. He believes that one way to deal with the food insecurity crisis is to clarify information on global grain reserves and accurately report harvests from arable land. He even offers a short-term solution to improve the situation, which is the release of blocked wheat in ports. Two shooters also warn of a famine in a number of poor countries in the next few weeks.

Market control by rebuilding trust and transparent information

“In the medium term, what is needed is to rebuild trust in the markets,” says Olivier de Shooter. One of the reasons for this tremendous rise in prices since February is that there is a lot of speculation on the part of market participants, especially grain traders. For example, there is talk of a continuing upward trend in grain prices, with traders stockpiling grain in hopes of selling it at a higher price.

He added: “They are speculating about the risk of grain shortages in the market, and this speculation is physically affecting the grain market.” That is why we need to rebuild trust and provide governments with clear information about stock levels and harvest quality. Unfortunately, market transparency is not perfect.

According to the UN Special Rapporteur; Since 2011, the Agricultural Markets Information System (AMIS) has been activated, which is supposed to inform governments and private traders about the level of stocks and the quality of harvest at the appropriate time. But it does not include the information system of private traders. These trading groups, which hold the bulk of the world’s grain reserves, do not share stock information.

Two shooters added: “This lack of transparency in market information opens the door to speculation.” This is followed by sharp reactions from market participants who do not know exactly how much reserves are available to meet the needs of the coming months, and therefore listen to speculation. Therefore, information transparency is a big step in building trust and dealing with the effects of food insecurity.

Humanitarian corridors for wheat?

Olivier de Shutter supports the maintenance of normal food supply chains around the world, citing the blockade of some eight million tonnes of wheat in Black Sea ports and the opening of “humanitarian corridors” to allow this amount of blocked grain to enter the market. Suggests as a short-term solution.

“Just as we need humanitarian corridors to allow people under bombardment to leave conflict zones, so we need to bring grain to market,” he said. This should also be the subject of negotiations between Russia, Ukraine and the international community.

The latest United Nations figures show that 276 million people worldwide are experiencing severe food insecurity. This number has doubled in the last two years, in other words, since the beginning of the Corona virus epidemic. Today, despite the effects of the Ukraine crisis, it is very likely that food insecurity will affect many more people.

These are people who simply do not have access to food because they do not have enough income or because there is no food in the area they occupy. This is the case when the supply chain is broken. And so, these are people who are dependent on humanitarian aid.

Will Eritrea, Yemen and Ethiopia enter a famine soon?

When humanitarian aid does not reach people with acute food insecurity, a famine ensues. According to two shooters, this situation forces people to move to food aid distribution centers to find food.

According to him, this exacerbates the problem, because when these people are forced to leave, they give up their livelihoods, albeit a small one. They leave the farms and sometimes leave their livestock, so it becomes very difficult to save them because they are completely dependent on humanitarian aid.

According to the United Nations, at least 49 million people in 43 countries are currently on the brink of starvation. According to this expert, this statistic is increasing every day and will soon exceed this figure.

“In countries like Eritrea, Yemen or Tigris in northern Ethiopia, the situation is spiraling out of control because these countries are heavily dependent on wheat imports, especially from Ukraine and Russia,” he said. For example, 90% of Eritrean wheat imports come from the two war-torn countries and they are currently unable to help Eritrea. I think there will probably be a famine in these countries in the coming weeks.

Defining plans to help with famine is time consuming

When a famine is declared, it generally takes three to four months to mobilize humanitarian aid. “We do not have an effective international system that allows, for example, the United Nations World Food Program to intervene immediately,” de Shotter said. The World Food Program, like other institutions, must first call on international donors to help. They have to buy several tons of food, such as cereals or rice, to distribute to the affected population, which can only be achieved after the delivery logistics problems are resolved and aid reaches the needy.

According to the report, the period of three to four months is extremely long for a population facing food insecurity and famine. Therefore, it is unacceptable that we do not create an efficient and emergency military at the international level that would allow the World Food Program to meet the food needs of people in distress quickly.

Aid that has also become difficult for international institutions to provide

Olivier de Shotter points to another problem facing prosperous countries today: The Ukraine crisis has prolonged the reaction time of these countries. According to him, countries that have traditionally been charities and suppliers of the World Food Program’s humanitarian needs are now, like other countries, facing the consequences of the Ukraine war and are no longer necessarily more willing to help than others.

He added: “It is clear that we are not in situations such as earthquakes, droughts or floods where the crisis is limited to this or that land. The crisis is now widespread because grain prices have risen sharply in all countries of the world, making it much more difficult to receive and distribute aid.

“The United States, Canada and the European Union have traditionally been generous in helping people affected by problems such as conflict or the effects of climate change when prices were low,” he said. But as prices rose, so did their willingness to help. In addition, the United States, like countries such as Australia or India, has announced a relatively low grain harvest for 2022. Therefore, the power of assistance is less than usual. Therefore, given the general nature of the crisis, it is expected that assistance to international agencies will be more difficult.

Will prices increase by the end of 2023?

The UN Special Rapporteur on extreme poverty and human rights is also not optimistic about the future of the current situation and believes that the problem is facing prices that will surely remain high until the end of 2023. Cereal harvests are expected to be low from August to September (fertilizers and September) because fertilizers are more expensive and therefore higher production costs. Another reason for this situation is the significant droughts in countries such as India or Pakistan, which have reduced the harvest in these regions of the world. So we expect prices to rise in the next 18 months, and we will see that governments will not be able to afford food imports. These governments must increasingly rely on humanitarian aid. Therefore, we will face a very difficult situation in the coming months.

World Bank on the way to changing priorities

In the face of this growing food name, the World Bank will provide $ 12 billion over the next 15 months to help countries that are predominantly African, followed by countries in the Middle East, Eastern Europe, and Central and South Asia. . The purpose of this aid is to implement projects in favor of agriculture. Another goal of this institution is to promote “social support to reduce the effect of increasing the price of cereals.” If we consider the 18 billion and 700 million dollars of unused credit that can be allocated for the same purposes, the amount of assistance from this institution will reach 30 billion dollars.

“We also need help today from countries that are heavily in debt and cannot afford to buy grain at very high prices in international markets and feed their own people,” said the UN Special Rapporteur. These countries must be helped quickly by taking steps to support the public financial system and reduce debt.