December 6, 2023

Food City

The Best Darn Food City Uou Can Get

A global food crisis looms amid the war in Ukraine. But there’s a way Canada can help

The world’s breadbasket is cracking. Ukrainian land is being shattered by bombs, its sea ports disrupted by blockades, and its working-age population increasingly focused on burying enemy soldiers instead of seeds.

The ripple effects of this will hit the world’s poor the hardest, with high wheat-importing regions like North Africa especially vulnerable.

Food prices were already high. Now, two countries that produce more than one-quarter of the world’s wheat are at war, and one crisis is compounding another. 

With Ukraine under attack, Russia sanctioned, energy prices soaring and inflation blowing up the cost of other commodities, it’s a metastasizing series of price shocks — and food policy analysts warn the worst is still ahead. 

“It’s difficult to overstate the magnitude of our concerns,” said Caitlin Welsh, director of the global food security program at Washington’s Center for Strategic and International Studies.

Ukraine’s deputy minister of agriculture policy says even in normal times a small supply disruption might have a global ripple effect. 

Imagine now, Taras Dozba says.

The report from Ukrainian farms

The government has surveyed Ukraine’s farmers and the numbers are bleak, according to Dozba: just 20 per cent say they have the fuel they need to run their farms, and they have lost 10 per cent of land usage to the effects of war.

“This is war. Pure, brutal war,” Dozba said, speaking by video at a think-tank event in Washington hosted by the Center for Strategic and International Studies.

“[Ukrainian citizens are] like in medieval times having to go to war to defend their own country. … This, all together, creates a big, big mess.”

Destruction from the war in Ukraine has hit fields, ports, food warehouses and disrupted the flow of goods used in agriculture. Seen here: Ukrainian servicemen carry containers after a bombing this week on the outskirts of Kyiv. (Vadim Ghirda/AP)

All this in a region that last year exported one-quarter of the world’s wheat, 10 per cent from Ukraine and 16 per cent from Russia. 

Ukraine is an even bigger exporter than Russia of corn, barley, sunflower seed and rapeseed oil, and Russia is a top fertilizer producer, the second-largest in the world after Canada.

Hunger was already on the rise

Things weren’t easy last year: numerous countries had already been forced to cut wheat imports because of high prices. 

The UN had already estimated world hunger hit a 15-year high because of the pandemic and now says it’s about to get worse.

Hunger and food prices are rising. Food riots broke out in numerous countries the last time prices were this high, including in Haiti’s capital, seen here in 2008. (Eduardo Munoz/Reuters)

The deputy director-general of the UN’s food and agriculture organization, Beth Bechdol, told the Washington panel that her organization’s monthly food-price index hit a record in February and will grow further for March: “[With] another record being set.”   

Egypt is especially vulnerable, food policy researcher Joe Glauber said.

Why food experts worry about North Africa

Like its neighbours in North Africa, Egypt is a massive wheat consumer, for staple dishes like couscous, and it relies on imports more than anyone, importing nearly triple the volume brought in by Nigeria, the next-largest consumer.

He said this rolling crisis won’t be easy to turn around. Especially not amid war. 

North Africa’s diet relies heavily on imported wheat, a key ingredient in staple dishes including couscous, seen here in Morocco in 2016. (Mosa’ab Elshamy/AP)

“If you’d asked me three weeks ago, I’d say, well, ‘Farmers will start to plant crops, and we’ll see those prices start to moderate.’ Assuming good weather,” said Glauber, a former U.S. official, now senior research fellow at the International Food Policy Research Institute.

“Ukraine was [supposed to be] a big part of that [solution].”

How Canada can help

He said very few countries are in a position to make a difference, because most of the world’s wheat for this year was already planted last fall; only 40 per cent of the world’s wheat is planted in the spring.

He mentioned one notable exception: Canada. He said Canada’s heavy production of spring wheat means it can still adjust its production with planting season weeks away.

Projections released by the Canadian government on Friday remain modest: After a miserable, drought-plagued year, volumes are expected to rebound somewhat.

Fertilizer is also affected. Canada is now expected to boost production of potash, seen here at a Saskatchewan mine in 2017. (Liam Richards/CP)

Canadian farmers are projected to seed six per cent more spring wheat than last year and supply 20 per cent more harvest, but that’s after a particularly bad year; it would still leave Canada slightly below its longer-term production average.

“Positive, relative to last year,” is how Daniel Ramage, director of market access and trade policy at the industry group Cereals Canada, describes the output forecast.

There’s another agricultural commodity Canada’s Prairies are renowned for and it appears production might jump: potash, used in fertilizer.

One potash company, Saskatchewan-based Nutrien, says it will hire more workers at mines and increase production by almost one million tonnes, to 15 million. 

All of these remain projections.

A problem with one commodity spills into another and it ripples internationally. Italian farms, like this one near Naples, are struggling as feed for livestock is impacted by inflation and a global supply crunch. (Guglielmo Mangiapane/Reuters)

Next fear: More disruptions, more protectionism

For wheat, Ramage warned that unforeseen problems can still arise, with bad weather being the perennial threat to farmers.

One imminent fear for him is the prospect of a labour stoppage at Canadian Pacific Railway, with a looming strike notice and a lockout notice set for this weekend.  

“People are depending on Canadian agriculture,” Ramage said. “[There are] preventable challenges that need to be avoided.”

Global food experts have another fear: food protectionism.

Wheat prices, already high, surged after the invasion of Ukraine. (U.S. Congressional Research Service)

Russia has temporarily banned some grain exports, Algeria has restricted exports — and the UN’s Bechdol worries about a domino effect.

“I very much hope that’s not a slippery slope,” she said.

These kinds of actions, Glauber said, would drive up prices everywhere on the global market and make it more expensive to feed livestock.

And at the end of the day, vulnerable people would suffer most, he said.

He urged politicians to remember the principle of medicine’s Hippocratic oath: “Do no harm,” Glauber said.

“Because there’s a lot of policies that can make matters a whole lot worse. … Don’t do anything that’s going to distort markets further.”

A possible labour stoppage at CP Rail could add to the woes. Seen here: grain and oil cars pass by a grain elevator in Rosser, Man., in 2014. (John Woods/Canadian Press)