The Russian war in Ukraine is an abominable humanitarian catastrophe, and it poses many risks for the region and the wider world. Among those is the growing risk that the chaos up-ends agriculture on a large scale—affecting markets for oil seeds, wheat, and other cereal grains, as well as fertilizers derived from natural gas, with effects that ripple across the world. It is too early to tell whether the disruption will be enough to cause a global food calamity, though there are ominous signs. And even as governments seek to avert looming food crises, they must also recognize that today’s food and farming systems are highly vulnerable to disruption.
A food crisis may begin in Ukraine, but it won’t end there
Ukraine is a major producer of several agricultural exports, including corn and oil seeds (chiefly sunflower), but the wheat crop is the country’s most important contribution to the world food supply, accounting for 7 percent of global wheat exports. When combined with Russia’s 18.4 percent share of global wheat trade this means that up to a quarter of the world’s traded wheat could be compromised by the war, through a combination of production losses, trade restrictions, and international sanctions. We are already seeing farmers unable to plant, and if fighting spreads across more of Ukraine this spring, the problem will only worsen.
Most of the world’s commodity grains are used in the country or region where they are produced. Major producing countries typically hold back some reserves to buffer against year-to-year variability in production. Only a fraction of what is produced goes on the global market. For example, 19% of the world’s annual wheat supply (production plus stocks) is on the international market. Wheat traded by Russia and Ukraine makes up just 4.7% of total global wheat supplies. That is important to know to estimate how much the global supply must compensate in the event that all Russian and Ukrainian wheat exports are lost.
This is not to say that Russian and Ukrainian agricultural exports are insignificant. In fact, we can expect grievous localized humanitarian crises due to their disruption. Those most closely and immediately affected will be the citizens, farmers, and the food and agriculture and export industries of Ukraine. As of this posting, 8.6 percent of the population have left as refugees of war, and those remaining to defend and operate the country will experience disruptions in all basic systems and services, including agricultural production, food processing, and distribution. Ukraine’s government has already restricted exports to maximize domestic food supply, and farmers are committing to repurpose agricultural land from industrial and export crops to short-season food crops to both feed the population as well as to minimize their financial losses. The nation’s Agriculture Minister has announced that spring crop planting area could be reduced by as much as 50 percent.
A second food-related humanitarian crisis is already affecting Middle East and Northern Africa nations (MENA) that are heavily dependent on food imports from Russia and Ukraine. Egypt, for example, depends on Russia and Ukraine for 69.2 percent of its wheat imports. The Arab Spring uprisings of a decade ago were heavily influenced by spikes in food costs due to complex causes, which underscored the grave economic inequality in the region and its great dependence on imported food.
Though the region’s governments may be quite mindful of the lesson that food cost spikes can lead to social upheaval, they will have to bid on a global supply of wheat that will be pricier due to already constrained supplies. These are the result of droughts in major production areas in the western United States and Argentina. If import-dependent states are unable to maintain current wheat prices, we’ll see a repeat of the pattern that the world’s most economically vulnerable people experience the brunt of war and disruptions in global supply chains elsewhere. There are 49 countries that depend on Russia and Ukraine for at least 10 percent of their wheat imports (ranging from Mongolia at 100% to Myanmar at 11.1%), and their combined populations total 1.9 billion, or 24% of the globe’s population. More important than their numbers, however, is that several of the affected countries and regions include some of the more politically fragile and/or embattled in the world (e.g., Bangladesh, Egypt, Sudan, Turkey, Yemen.) Fifteen countries, with a combined population of over half a billion, depend on Russia and Ukraine for more than 50% of their wheat imports.
It will be challenging for the world’s farmers to adjust
Because there is recent precedent for price spikes and disruption in global grain supplies comparable to, and exceeding, those we have seen so far, we know that the supply of food and feed grains will not be as limiting in determining access to cereal grains as the price of these items will be.
It could be up to other major wheat producing countries—chiefly the United States, Canada, France, Argentina, and Australia—to keep bread on many tables around the world this year. The world’s top wheat producers, China and India, which produce 2.7 and 2.2 times as much wheat as the United States, respectively, are not major exporters and are unlikely to significantly open up their significant strategic reserves of wheat and rice as that would risk their future food security and political stability. Russia is a major exporter, but that country’s diminished wheat exports will be constrained to allied nations that can politically resist the economic sanctions applied by the rest of the world.
The problem is that in all major wheat producing basins, large-scale wheat production is usually locked in about a year in advance. Farmers secure their inputs (seeds, fertilizers, chemicals) as bulk purchases as far in advance of planting as they are able, seeking the best prices (the later they wait, the lower the supply, and the higher the prices). Similarly, they seek the best prices possible for their harvest by speculating on how global supply and demand will be affected by production conditions in all other producing regions. They can opt to sell their harvests in advance as “futures” contracts to obtain guaranteed prices. If they’ve invested in on-farm storage, they can also opt to hold back some portion of their harvest to take advantage should favorable conditions develop on spot markets. Farmers, processors, traders and speculators in the other wheat-producing basins see major market opportunities as a result of the war and have driven up the price of wheat since hostilities broke out.
Additionally, the globe’s industrial “breadbaskets” rely heavily on specialized production, processing, and transportation infrastructure for particular commodities, and their farmers have specialized knowledge. It can be difficult, therefore, to quickly shift production plans at the scale of the globe’s industrial commodity agricultural systems. Well-intended discussions about the ability to rapidly convert land currently devoted to conservation or biofuel purposes toward food production have been dampened by the limited viability of such schemes. And under these conditions, grain producers and exporters will vie for the highest prices possible.
This creates another problem to ward against, in that opportunists on all sides—those who sell fuel and fertilizers to farmers, and those who process and sell food containing wheat and seed oils—are likely to exploit rising costs due to tightened global supplies to profiteer, contributing to an inflationary spiral. (We have seen such profiteering, most recently by meat industry giants.)
Those with more purchasing power will adjust and pay for necessities, but disrupted supply and unaffordable supply of food are precisely the major drivers of hunger for those who cannot. For example, 37 percent of Egyptian household expenditure is for food, and any food price increases will be much more heavily felt by them than by the typical Israeli household, which spends 16 percent of its household income on food. This is also a domestic issue. Fifty million people in the United States are food insecure. The lowest quintile of households by share of income spend 27 percent of their average annual income of $14,589 on food. These households will be just as sensitive to food price increases as Egyptian households.
And there are other problems.
Today’s farming relies on another Russian export—natural gas
The world’s industrial agricultural systems are heavily dependent on fossil fuels — you can think of most industrial crops as embodied petroleum. The higher cost of fossil fuels will add to food costs due to more expensive fertilizers, chemicals, processing, transportation, and insurance expenses. Buyers, whether countries, industries, or humanitarian programs such as the United Nations World Food Programme, will be able to cover these prices, but they will be bidding against countries and organizations without that capacity.
An additional dimension of this dynamic is that countries that have been historically dependent on Russian imports—or may become new trading partners as a result of redirected exports resulting from sanctions against Russian exports—will be beholden to the political interests of the Russian Federation as a trade-off for their food security and political stability. Fifty-two members of the United Nations General Assembly opposed or abstained in that body’s vote to condemn the Russian invasion as a result of such considerations.
Clearly, the world’s agriculture and food production systems are highly vulnerable to disruption. With multiple disruptions stemming from the war in Ukraine, the likely result is that the number of the world’s hungry, currently standing at 815 million (one in 10 people), will rise—and that the major cause will not be lack of food supply, but will continue to be disruptions due to war and conflict.
What should be done to address the next food crisis?
We do not yet know whether this is a short-term crisis, or a permanent disjunction in the world’s geopolitics, energy, and food flows. In any case, there is the acute emergency at hand, with millions under attack in Ukraine and millions more displaced. In addition to supporting the nation’s defense and humanitarian efforts, a good food-specific support effort is that of World Central Kitchen, a nonprofit that provides meals to refugees at no cost, by supporting the local economy through working with farmers, distributors, restaurants, and chefs to buy food and employ people locally.
More food crises are surely coming, and systemic reforms would address or prevent them better than emergency responses. Future crises may be triggered by increasingly erratic weather and shifting growing conditions driven by climate change, or by future military conflicts or pandemics. Whatever the causes, our food systems need to be nimbler and more resilient to deal with such scenarios. Two approaches would go a long way to that end.
Countries should work urgently to boost food sovereignty. Governments and civil society around the world must rethink their food systems so that events at a distance have less of a chance to shock the stability of national food supplies. This means investing in diverse and sustainable local and regional production systems that prioritize local food security while also taking part in more diverse trade networks. For example, the MENA block should invest more in creating vibrant national farming and marketing sectors so that they minimize their dependence on imports and repurpose their investment in subsidizing staple food costs. For that matter, that would be a good formula in the United States as well.
The world—and especially the United States—must wean agriculture off fossil fuels. The rise in fossil fuel costs, and the vulnerability of nations that depend on natural gas and oil from Russia (or on products such as fertilizers that depend on minerals and fossil fuels mined in the Russian Federation) have prompted oil industry interests to argue that US policies must double-down on the fossil-fuel economy, including in agriculture. Instead, this is a time to draw the lesson that dependence on climate-warming fuels makes all of us vulnerable—to global petropolitics as well as to creating a planet that will be uninhabitable for everyone. For example, the droughts that have constrained wheat production in the western United States and in central and western Argentina are driven in part by human-induced climate change.
Investments in decarbonizing our economy will create better futures for all of us. Just as there are viable and lower cost alternatives to the dead-end fossil fuel economy in the energy and transportation sectors, the agricultural sector has better options too. Agroecological approaches should replace extractive agricultural systems with systems that regenerate the basic resources of agriculture while providing equitable livelihood and a supply of nourishing food for all. National policies should prioritize these strategies.
Experts called on the European Union this week to take action in this vein. And here in the United States, policy proposals including the Agriculture Resilience Act would dramatically increase investments in a more resilient and sustainable agriculture system.