Regions like the Middle East and northeastern Africa already have dangerously low food inventories. The world will soon discover that the pandemic was just a dress rehearsal for what’s about to happen.
The circumstances are the result of the Russian invasion of Ukraine. Russia and Ukraine together export over a quarter of the global supply of wheat and one-fifth of the world’s corn supply.
Saying that Ukraine is Europe’s breadbasket is an understatement. Half of Africa’s wheat imports come from Ukraine and Russia, which is also a major fertilizer exporter.
Because of sanctions, Russia can’t sell to anyone except perhaps China. And with limited or no access to fuel, farmers in the region can’t even think about putting seeds in the ground.
To make matters worse, the United Nations World Food Programme (WFP), the largest such operation in the world and winner of the Nobel Peace Prize in 2020, has lost one of its most significant contributors. Last year, Ukraine was the largest single source of food for the program, providing nine per cent of the total food provisions managed by the WFP, which was already carrying a deficit due to pandemic-related complications.
Countries in need may not be able to rely on the WFP this year. So the almost eight billion people in the world face unprecedented food shortages.
All eyes are on North America to make up for the losses generated by the conflict and subsequent sanctions.
Many observers expect, or at least hope, that farmers will plant more this year. But relying on specific quantities planted by farmers can be problematic. Input costs like fertilizers and fuel are going up even more than the price of grains like wheat.
If the Ukraine conflict ends in the next month, it would be good news for the world. But farmers may end up losing with prices plummeting. They’re keenly aware of this agonizing possibility.
Mostly unknown in Canada is the fact that Canpotex, a Saskatchewan-based company, is mandated to sell fertilizers to the rest of the world for export markets. It’s owned by Nutrien and Mosaic, two industry powerhouses.
Canpotex helps both companies collude and inflate fertilizer prices on world markets. This archaic model is perilous to global food security and this year’s predicament makes this painfully obvious.
For decades, Canada and Saskatchewan have supported a supply-side economics scheme that drives fertilizer prices higher. Production has been adjusted based on market prices, which is why Nutrien opted to increase its production by 20 per cent recently. But if prices drop, potash mines would close. That’s simple but incredibly irresponsible.
Canpotex was set up to counter another cartel in Belarus that no longer exists. The issue will eventually need to be addressed.
But some things can be done now. To give Canadian farmers immediate help, the industry needs a complete rollback of taxes and adjustments to emission reduction targets. Both federal and provincial governments can do something about this.
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It’s unreasonable and irresponsible to continue honouring our environmental objectives when many could die from hunger in months. Farmers need all the help they can get.
The food-to-fuel issue is another lingering challenge. About 65 per cent of corn grown in North America is used for biofuel production. This year, food should be considered a priority for businesses and governments involved.
It’s highly unlikely Canada will experience severe food shortages. Nonetheless, many countries – including Canada – will face a real and harsh dilemma in the coming months. We must try to balance our nation’s food security needs while helping other regions.
The WFP and other organizations will come to Canada asking for more help.
Food affordability will continue to be a growing issue. Many families are falling behind as wages can’t keep pace with rising food prices.
But ultimately, we should just feel lucky we have food on grocery shelves. This is how bad it will get.
Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.
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