G20: FAO says global threats to agrifood systems need complex approach

The challenges undermining global food security call for a complex approach embracing investment, policy reforms and better use of resources, QU Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO) told a key meeting of the G20 today.

“Recent global events, from the COVID-19 pandemic to the climate crisis, multiple conflicts around the world and the war in Ukraine, have all heavily affected agrifood systems in multiple ways,” Qu told the G20 Sherpa meeting of senior government representatives.

Qu cited the recently launched 2022 edition of the State of Food Security and Nutrition in the World (SOFI) Report, which confirms that world hunger has increased again in 2021, reflecting growing inequalities across and within countries. It says 828 million people suffered from hunger in 2021, an increase of 46 million from 2020, and 150 million from 2019 before the pandemic.

Ukraine conflict deepens challenges

The war in Ukraine has added to an already challenging situation and could lead to an increase of 13 million more chronically undernourished people this year, and 17 million more in 2023, according to FAO estimates.

Another global challenge is rising inflation, with world food prices increasing since mid-2020 due to many factors. The FAO Food Price Index at 160 points, reached an all-time high in March 2022.

Last month, the index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, averaged 154.2 points, down 2.3 percent from May, but it remained 23.1 percent higher than in June 2021, Qu noted.

FAO calculates that the increase in the food import bill for the 62 most vulnerable countries amounts to 24.6 billion US Dollars in 2022, and it affects 1.79 billion people.

In response to this growing challenge, FAO has developed a proposal for a global Food Import Financing Facility, which aims to assist countries in financing their food purchases to minimize any risk of social unrest. “This proposal should be implemented by the IMF (International Monetary Fund) under their balance of payments financial mechanism,” the FAO Director-General urged.

Among the other challenges, average fertilizer prices have also increased significantly, almost tripling since mid-2021, together with rising energy prices. Changes in trade routes and current constraints will further increase the global fertilizer price. If countries producing major food staples, such as rice, are not able to get enough fertilizers in the upcoming planting season,  this could affect the global supply of food.

Trade reduction and interruption of the supply chain are of major concern, the Director-General said. At the end of May, 22 countries had implemented export restrictions through 39 measures ranging from bans to export taxes affecting almost 16 percent of agricultural exports, on a kilocalorie basis.

Package of measures needed

To address these challenges, Qu said the international community needed to implement a package of measures:

-Invest in countries most in need that are most affected by the increase in food prices. In addition to providing timely food aid, we must also focus on boosting productivity by paying more attention to producing nutritious food locally. Currently only 8 percent of all food security funding in emergencies goes to assist agricultural production. Investing in agriculture and rural livelihoods is strategic, and 7 to 10 times more cost-effective than traditional assistance.

-Put policies in place that both increase productivity and protect natural resources, and that are specific to regional needs. Transforming agrifood systems to deliver healthy, nutritious diets, and with more equitable outcomes, will require significant financial investment, estimated at 8 percent of the size of the agrifood market. We also need to accelerate the African Continental Free Trade Area by speeding up the normative work on food safety standards, and by reducing tariffs and non-tariff barriers. Intraregional trade as well as investment should be accelerated in all regions of the world.

-Ensure better and more efficient use of available outputs and inputs to produce more with less.  This must include water, as water stress remains a priority, with 1 billion hectares of agricultural land facing severe water constraints; 800 million hectares of rainfed cropland and pastureland severely affected by recurring drought. We need to use the best available technologies and regulations for efficient gains in the way we use water in agriculture. Reducing food loss and waste is key, as the current high amounts of loss and waste could feed around 1.26 billion people per year. Fertilizers also need to be used more efficiently, with the aid of technology and science based re-distribution of applications across the production process, supported by fast implementation of detailed soil maps to assist the most vulnerable countries to use their fertilizers efficiently.

The FAO Director-General said key accelerators for all these points are innovation, science and technology. Investment in research and development is the highest marginal utility for profits.

Technological and social innovation can reduce market failures and improve market functioning.

Digital agrifood systems should be scaled up to help the transformation of family farmers. Coordinated action within the G20 as well as beyond, “is critical to facilitate the smooth functioning of global food markets and to secure food supply for all,” Qu said.