Food Price Increase Exacerbates Hunger
Between 2020 and 2022, food prices rose dramatically. Due to the war in Ukraine, they reached their record level in March 2022. Since then, a downward trend has been discernible. But this provides little relief for those who suffer most from the high prices. The situation is particularly dramatic in countries of the Global South – climate-related crop failures and conflicts further endanger food security for millions of people.
+++ Latest News: Black Sea Grain Initiative halted by Russia +++
Russia has rejected an extension of a deal that allowed the export of more than 35 million tons of Ukrainian grain to 45 countries in the past year. The agreement, which the countries had previously extended several times, allowed Ukraine to send cargo ships out of Ukrainian ports and safely pass through the Black Sea controlled by the Russian fleet until July 17. However, Russia is now insisting on sanctions relief on its food exports before agreeing to another deal extension.
As a result, food prices worldwide could rise sharply again, causing more hunger, especially in countries of the Global South that rely directly on grain imports from Ukraine. This increase has a particularly dramatic impact on countries already affected by hunger due to armed conflicts or droughts and other consequences of climate change. These include Yemen, Sudan, Somalia and Kenya, among others. "Renewed price increases will exacerbate the food situation for millions of people in these countries," says Welthungerhilfe (WHH) Secretary General Mathias Mogge.
Russia's war in Ukraine had already caused prices for energy and agricultural products to skyrocket dramatically. Both countries are among the leading suppliers of maize, wheat and sunflower oil globally.
The FAO Food Price Index (FFPI) consists of five commodity groups: Meat, Dairy, Cereals, Vegetable Oils and Sugar. These commodities have been selected because they are of high strategic importance for global food security and for global trade. The Food Price Index tracks monthly changes in international prices for the most traded food commodities.
Food remains expensive
Since the UN Food Price Index (FFPI) peaked in March 2022, the international level for food prices has been falling again. Prices have fallen not only for cereals but also for vegetable, oils and dairy products. In February 2023, the UN Food Price Index stood at around 130 points, below the record level of almost 160 points caused by the war in Ukraine – but still well above the September 2020 level, when the FFPI stood at just under 100 points.
Forecasts for cereal harvests are good. The Food and Agriculture Organization of the United Nations (FAO) forecasts global wheat production of 784 million tons in 2023, which would be the second highest since records began. In North America, farmers have increased their acreage in response to high grain prices, and the outlook for corn plantings in Brazil is also favorable.
Nevertheless, the high production level can only just keep up with the increased global demand. And the strong crop yields do not translate to better access to food. In Ukraine, the arable land can produce good yields and the country can export much of this, but there too the lack of clarity about the continuation of the Black Sea Grain Initiative is causing uncertainty. In addition, Ukraine is one of the countries that require food aid due to the war. In other world regions, the lack of purchasing power and the still very high food prices are major problems.
In addition to the war in Ukraine, there are other price-driving factors: climate-related crop failures, expensive fertilizers, high energy prices and transport costs, and logistical problems. All these factors mean that low- and middle-income countries have difficulty securing and paying for their imports. In many countries, there is extreme inflation in food prices. More and more people can no longer afford food and must reduce the number or variety of meals. Their food security is at risk.
The high world market prices primarily affect countries dependent on imports and already had difficulties supplying their populations with sufficient food. The situation remains very strained – especially in sub-Saharan Africa.
Food price increases cause hunger
The effects are serious: According to FAO, 45 countries worldwide depend on external food aid, 33 of which are in Africa and nine in Asia. Up to 828 million people are going hungry worldwide, with famine looming in some regions. The high price of food, along with other factors such as the effects of the climate crisis, armed conflicts and wars, and the consequences of the COVID-19 pandemic, are making efforts to end hunger immensely difficult.
Price increase, food, famine – how is it all connected?
Agricultural commodities cost a total of 31% more on the world market in 2020, the first year of the COVID-19 pandemic, than a year earlier (FAO). Oilseeds such as rapeseed cost twice as much. The price of corn has also nearly doubled. Wheat and soybeans have become significantly more expensive. One reason for this was the cost of storage during the pandemic.
In addition, trade disputes, including those in the pandemic, between countries can lead to supplies being halted. Extreme weather events lead to fewer harvests, causing prices to rise. Energy prices, for example for crude oil, which have risen significantly in some cases, also have a major influence on price increases. The difference: In industrialized countries, price increases usually have only a moderate impact – people only have to spend around 12% to 30% of their income on food. But in countries of the Global South, the figure is between 50% and 100%. For many households in poorer countries, higher food prices mean that they can no longer buy food and have to go hungry. There is simply nothing left for other important things such as housing, health or schooling for children.
At the same time, as food prices rise, aid organizations need more financial resources to buy it. And if farmers in the Global South can no longer afford seeds and fertilizer because of rising prices, cultivation and harvests will shrink – and poverty and hunger will grow as a result. This is a vicious circle that must be avoided at all costs.
Healthy nutrition is a human right Global agriculture produces enough food for everyone, but it is extremely unequally distributed.
Multiple crises: fatal for food insecure countries
The Famine Early Warning Systems Network (FEWSNET), FAO and WHH are warning of further price rises, including of staple foods, and worsening hunger crises, particularly in Ethiopia, South Sudan, Yemen, Kenya and Somalia – but also in many other countries. The combination of climate change, global conflict, high food prices and lack of investment in agriculture in food-insecure countries may push millions more people into hunger. This is compounded by the increased cost of energy supplies, which can lead to further shortages in production and also transportation. Countries already hit by climate disasters and conflict are more likely to experience further price increases as value chains break down more easily there.
Thus, there is a higher risk that these price increases will further exacerbate hunger and conflict. Dr. Rafaël Schneider, Deputy Head of Policy at WHH, has this to say about the development: "We are observing with concern that prices for staple foods such as cereals, dairy products or cooking oil currently know only one direction: up. All the warning lights are flashing red because persistently high food prices simply mean that poor people can no longer afford healthy food and have to do without entire meals. 735 million people worldwide are already going hungry today."
Climate protection to secure livelihoods
But in Europe as well, the effects of production bottlenecks and climate-related crop failures are increasingly being felt. Schneider says of this development: "The fact that a cucumber costs two euros means that many people in Germany can no longer afford it. The next stage is what we are seeing in Africa, where many people not only have to do without healthy foods such as fruit and vegetables but can no longer afford the increasingly expensive staple foods."
Therefore, it is of fundamental importance for sustainable food security in a global context to invest in climate protection and adaptation to climate change, and in agriculture, especially in food-insecure regions. For example, this includes further training of farmers, better irrigation and plowing methods, and adapted seeds, but also new technologies and, depending on the region, approaches specific to the climate, soil conditions, and water availability. In this respect, supporting farmers in regions affected by hunger is a measure that can be implemented immediately.
Rise in food prices exacerbates hunger in Africa
Although the FAO's price warnings are manageable and world cereal harvests in 2022 were only slightly below 2021 levels, the situation in low- and middle-income countries remains dramatic. According to the Global Information and Early Warning System on Food and Agriculture (GIEWS), the crop outlook for regions already experiencing hunger is gloomy and import requirements are high.
Conflict in East Africa and West Africa, for example, and poor weather conditions have led to widespread crop damage. 2021 saw production declines in many countries. In some regions, there have been huge increases in food prices. In Mozambique, for example, where armed conflict in the north of the country further drove price increases. The country saw a price increase of 45% for cassava flour between March and May 2021. These increases have had a serious impact on millions of families whose incomes were already severely weakened by the COVID-19 pandemic. In parts of Uganda food prices in the markets have doubled or even tripled. Prolonged droughts have led to crop failures, and people are dependent on buying food – but many cannot afford this and suffer from hunger.
The following examples show the impact of rising food prices on people in different countries:
Global Hunger Index 2022 No relief in sight: In many countries, the hunger situation is 'serious' or even 'alarming'.
Ethiopia
In Ethiopia, food prices have risen by up to 74% in the past 13 years. There are various causes for this. For example, developments in the world markets (great demand pressure in urban areas and economically developing countries such as China, India, etc.) play a major role. World market regulations such as protectionist measures and foreign trade deficits weaken the national currency and cause imported inflation.
These developments have dramatically worsened in the last two years. For example, crop failures, fragile supply chains due to COVID-19, and war in the north of the country have led to economic collapses. The forecast does not look good. An average annual inflation rate of over 35% is to be expected, as well as a permanent significant increase in the price of food. About 25% of the population has to get by on less than USD 1 per day, and about 80% on less than USD 2 per day.
The conflict in Ethiopia's Tigray region has led to the displacement of nearly two million people. Trade, access to humanitarian aid, and livelihoods have been severely affected.
Zimbabwe
In Zimbabwe, corn is the staple food. The national dish Sadza, a porridge made of maize flour, is usually served with vegetables or (if one can afford it) meat. The price of a kilo of maize flour in urban markets in December 2021 is up 30% from the previous year. Beans and cooking oil have become even more expensive – and that is despite the fact that Zimbabwe had a good harvest in 2021. But crops have not been enough to replenish empty stocks after two years of drought. Increased gasoline and transportation prices are also making food more expensive. On average, households in Zimbabwe spend 55% of their income on food.
At the same time, there is a lack of job opportunities: During the lockdowns of the COVID-19 pandemic, many companies in the cities shut down production or went bankrupt. Day laborers in the informal sector also lost their income opportunities during lockdowns. Because of the poor economic situation, there are few new jobs. As a result, more and more families are forgoing varied and nutritious diets. About one in seven families in 2021 say they are changing their behavior because they don't have enough to eat; the most common response is to buy cheaper and unhealthier food. Then they have plain sadza, without side dishes or vegetables. It fills you up, but it's not healthy.
Burkina Faso
In Burkina Faso, rising food prices are a major issue. Above all, violence and terrorist groups in the north and east are causing price increases. After the rainy season starting in October 2021, there were more attacks. Food was destroyed by burning fields and camps or slaughtering livestock.
People fled their villages and took refuge in the cities. Since the displaced are mostly producers and the cultivation and harvest of food is drastically decreasing, there is a shortage of food, especially fresh vegetables – both in the villages and in the cities. As a result, the prices of rice and millet, for example, are rising.
The COVID-19 pandemic has also contributed to price increases as well as reduced availability of fertilizers. Demand is increasing, but at the same time there are fewer income opportunities. Traders are taking advantage of supply pressures. Imports from Benin, Niger or Mali are decreasing because of the security situation.
Many people are going hungry. An additional drought in the north has made the situation even worse. According to the FAO, 2.6 million people were expected to be severely food insecure during the peak season between June and August 2022.
Sierra Leone
In the last four years, the price of rice has increased by 75%. As it is a staple food, the impact on people's food and nutrition security is enormous. In the last two years, restrictions imposed due to COVID-19 pandemic have severely limited the trade and importation of food products, resulting in a drastic price increase.
Neighboring markets in Guinea and Liberia have seen the same price fluctuations, spreading the problem to the entire West African region. Food security has declined, and households are feeling the high inflation of food prices. The decline in food security appears to be most severe in urban areas, where consumption has also declined the most and households do not have access to homegrown food.
In July 2020, nearly a quarter of households reported that they were unable to buy rice – the most important staple food – due to a rise in prices or a decline in household income. In some regions, people spend 70% of their income on food.
Rising prices lead not only to poverty, but directly to hunger: families forgo meals and buy cheaper and less healthy food. Child labor increases when parents have to send their children off to earn money instead of going to school.
Dr. Rafaël Schneider Deputy Head of Policy at WHHOther global factors that can lead to a food price crisis and thus hunger:
- Rising energy costs
- Climate effects
- Increasing transport costs, transport failures
- Rising fertilizer prices (rising agricultural production costs overall as energy costs, labor costs, agrochemicals, etc. rise)
- Political saber rattling
- Some countries (e.g. Russia, Mali) are already restricting their agricultural exports (another price driver, which was already fatal in 2008/9)
Impact of rising food prices in the Global North
The multiple crisis situations of climate change, war and high food prices must be addressed carefully in order to prevent the situation from worsening. In addition to expanding grain cultivation, as is already happening in North America, for example, agriculture strategies adapted to climate change are particularly important.
Since fertilizer prices have risen enormously, farmers in the USA, for example, are increasingly growing soy instead of corn and wheat. In many coffee-growing regions, however, climate change is leading to reduced harvests, which, together with increased transportation costs, is causing coffee prices to skyrocket. Together with uncertainty about future grain supplies from Ukraine, further price increases and shortages of some foodstuffs must be expected in the future.
Counteracting the effects of climate change at a global level is an elementary approach to ensure sufficient production of cereals and staple foods as well as other foodstuffs: "The Global North must reduce its climate emissions. It also needs to implement adaptation strategies, especially in regions where there are many crop failures. This means that agriculture must be designed to be more resilient to climate shocks," says Dr. Rafaël Schneider.
More expensive food, more hunger & higher aid costs
The harvest outlook for famine regions in Africa and Asia, in particular, remains bleak, Schneider said. "The affected countries must quickly prepare social security measures to ensure that people can be fed. In the medium term, they need to invest more in their agriculture, because now it is taking its revenge that too little was done after the last crises," Schneider demands. Countries like Germany need to step up their support for hunger reduction and rural development. Short-term export stops for agricultural products should be avoided.
Food price increases: how WHH provides support
To tackle poverty and hunger around the world, as well as the effects and consequences for people, food systems must be made sustainable and poverty-reducing, and disasters must be better prevented. There is a particular need for rapid action locally, such as building strategic reserves of food, ensuring the availability of adapted seeds, sustaining the promotion of innovative farming methods, advancing comprehensive risk management, or promoting measures to adapt to climate change.
Measures in Response to Food Price Increases
WHH's demands for the implementation of sustainable and resilient agriculture, which can prevent possible famines caused by the rise in food prices:
Short-term
- Avoid export freezes – in the event of impending crop failures in famine regions, it is important that the global agricultural market remains stable and can compensate for undersupply.
- In crisis regions, adequate food supplies must be ensured even if food prices rise. Affected states should prepare for sharply rising prices and prepare social security measures (e.g. cash assistance).
- Donor countries must adapt their services to food price increases.
Medium-term
- Governments should develop and implement a policy agenda for agricultural consultation that focuses on food security and income generation for the rural poor.
- Agriculture should maintain and further expand the high priority given to it by national governments and international development agencies, and its resources should be increased accordingly.
- The promotion of sustainable and resilient agriculture is a key component of the food system and an important tool for fulfilling the human right to food.
- Countries in the Global South need to implement integrated, transparent and participatory regional policies that focus particularly on the agricultural sector and its linkages.
- Activities and initiatives that create new jobs beyond agriculture should be particularly strengthened.
- Vocational training and continuing education, especially for young people and women, are urgently needed, as is the transfer of know-how and adapted technologies.
