The United Nations Security Council. Today, the US accused Russia of using food as a weapon in its war against Ukraine and in turn creating a global food security crisis.
From flying to driving to eating, life is suddenly a lot more expensive.
Global food costs are police of climb even further on soaring wheat prices after India curbed exports. Droughts, floods, and heat waves are threatening production worldwide, just as Russias were in Ukraine, throttle supply from one of the largest growers.
Across the globe. Rising inflation, growing trade tensions, extreme weather, and war have led to ever higher food prices and in many places, shortages of once plentiful staples like wheat and rice. Bloomberg's Agneshka Desuza reports that this problem of food insecurity has now become a top issue in election campaigns in Europe, Asia and South America and even in the US.
More than two billion people will head to ballot polls between October and May or June. And it's some of the most populous countries, you know, India, Indonesia, Mexico, Egypt, Argentina and so on.
And later I talked to Chatham House food security expert Tim Benton.
It's not just low income countries and climate vulnerable countries, it's also the rich world. Across the European Union, for example, five million people a year die from dietary related ill health.
I'm Westcasova today on the big take. Food is on the ballot, Aggie. You're right that we are starting to hear about food and food insecurity and food politics in elections all around the world. Why has food become such a big election issue now?
I guess we can just go back a little bit and try to understand and look at the global picture right now. I mean, we've had almost two years of inflation, started with developing countries and spilled over to developed countries. It's something very sticky. Central banks have managed to control and extend core inflation. But it's the food inflation that is just not going away. It may be easy, but it's not going away. It is a big issue, and
it's something that's visible on supermarket shelves. It's something very very close to anyone. There are so many food risks out there that politicians will need to pay attention to. And I would summarize it in a couple of words, war, the weather and export bands and essentially I mean erratic weather from heat waves, hail, floods have an impact on key crops around the world, anything from wheat, rice, to
olive oil, tomatoes, even even livestock. You know, at the end of the day, livestock needs water, it needs food, it needs grass, and even something like milk supply could be affected. And it just depends where you go. You're gonna see the impact, you know. At the same time, war, the war in Ukraine restricted flows of key crops out of the country. Sunflower oil. Ukraine is absolutely a dominant player producer in that market.
Prior to Russia's invasion of Ukraine, that country exported nearly half the world supply of sunflower oil. Now grocers in the UK and up are limiting how much people can buy as those supplies dwindle.
Wheat or corn. You know, all of that has been affected by the conflict and an agreement that was meant to facilitate the flow, the safe passage of those crops out of the Ukraine has largely came to an end because of the Russian rudrawal from.
It in Ukraine are accusing Russia of grossly violating international obligations. That comes after the Russian Defense Ministry said all ships sailing into ports in the Black Sea would be considered military ships.
So that's especially affecting countries that were dependent on Ukraine for their imports. And then you know, we've got risks from the return of El Nino.
For three years, officially, El Nino has developed down in the Pacific. We always watch Al Nino and l Nina based on how they affect our hurricane.
We haven't seen it play out completely in terms of the true impact. We are seeing little by little the impact from Elino, but we know there will be more. There would be more of it, and countries are nervous, and we see countries in Self East Asia, for example, being nervous about it. You know, all that nervousness, what's going to happen to El Nina, What's going to happen
to the weather? Inflation? That need to control food inflation is making governments nervous, so they are trying to do something, and that's when protectionism comes in. So they need to control the exports. Let's keep our foods at home so our prices are not too high, you know, let's control the prices through the flow of goods. That's what governments are trying to do as well, and we are seeing
it happen in India, the world's biggest rice exporter. The government of A. Narendra Modi is clearly nervous about food. India introduced restrictions on experts of rice.
Russian missiles are hitting Ukraine and the impact is being felt all the way here in India. Udaila has been forced to make some tough goals. India has banned the export of rice and it's a very big deal because India is the world's biggest exporter of rice and now it has stopped. This has led to panic in the global markets.
And you're right that something as simple as the humble onion has huge political effects.
Yes, and you wouldn't expect that from the humble onion, something that people take for granted, but governments don't. And just look to India, where onions are ubiquitous, such an important component of people's diet, and it's something that soaring prices of onions have the power to shake up government.
They actually can cost politicians their seats and we've seen that play out in the past and clearly It's something that the government in India is very sensitive too, and we've already seen even this year modes government introducing a special export duty on onions so then to keep more onions at home. It has battled soaring tomato prices. I mean, at some point tomato prices have gone up by something like seven hundred percent. I mean it was crazy a month.
Restaurant chains like McDonald's couldn't even get hold of them. Inflation is still high. It has come down. They have managed to keep it somehow under control, so we're seeing the signs of easing. But we are seeing prices of staples, of spices of grains very very high compared with a
year ago. So this is something that for people were in a country that there's still play plenty of food insecurity of malnutrition, you know, it's still something that needs to be addressed, and the government is clearly trying to do that.
You also write that in twenty twenty three, in twenty twenty four, there are a lot of elections around the world, which is another reason why food has become such an issue. Where are some of the countries where we're seeing this happen.
More than two billion people will head to ballot polls between October and May or June, and it's some of the most populous countries, you know, India, Indonesia, Mexico, Egypt, Argentina and so on. What we're seeing is governments or political parties, opposition parties trying to address two issues. One thing is how do we appeal to consumers, anyone that buys food. But then how do we appeal to farmers,
still a very powerful political force in many countries. I think Wes we spoke a year ago or so and we talked about how powerful farmers can be because there are millions of them, and there are lobby groups, and they're quite vocal about their discontent. If there's discontent, farmers will go and protest and show it. One key example is Poland. We've seen that in the elections this year.
This content among farmers was brewing for months. They weren't happy about the inflow of grains and other foods from Ukraine. They were concerned it was staying in the country and pushing down the prices and creating competition to them, and the government had to eventually had to respond. So in Poland, the ruling party it tried to restrict the imports of grains from Ukraine, making sure that it does not stay within that country. So we've had an update since we
wrote the story. The Law and Justice, the ruling party in Poland, in fact has lost the elections. They did manage to attract the farmer vote, but in this case, consumers, the city population turned up. The turnout was really huge compared with any previous collection, and they lost the vote. So in the end, the farmer vote was not enough to make Lawn Justice win.
Aggie, you mentioned that when we last talked, we were talking about how powerful farmers were, and at that time it was about the Netherlands, and farmers were very upset about government requirements to reduce emissions from cows in order to meet climate goals, and that too had really big effects across the country.
More than a year ago, the Dutch government's decision to curb nitrogen emissions and close many polluting farms led to countrywide protests. Farmers got really, really angry. They went to the streets, they burnt things, they blocked roads, they went to the Hague, they protested. We did see changes as a result in a Dutch political scene, and in fact there were elections held and that party known as BBB got most votes.
After the break. Who's most affected by this turmoil in global food markets, Aggie. In other country you write about that's facing these questions about food in their elections is New Zealand.
New Zealand is an interesting one because they were viewed as this very progressive country with the first ever tax on agriculture, you know, the first ever cow tax. So it was seeing whow you know, you know, there is something happening in farming and finally we're seeing climate impact
from agriculture being addressed by a government. But it wasn't something popular among farmers and as the election started to get closer, politicians started to you know, voice their opinions about it, and the opposition party in fact, during the campaign was that clear we want to push this emissions goal, this the missions tax back until twenty thirty. So the government could not stand still. They had to come up with their own delay. They proposed emissions pricing being delayed
towards the end of twenty twenty five. Now the opposition party won the elections and so we are likely to see a further delay in this part of it shows that implementing those climate policies in agriculture is not going to be easy.
Aggie.
You said earlier that a lot of countries want to try to keep their own crops, what they produce in the country instead of exporting it. But in the case of Argentina, you write, politicians are promising to do exactly the opposite.
Argentina is kind of an outlier in my piece because we've noted that food has become a more common issue, Addressing farmer needs have become more common theme in upcoming elections, but Argentina is one of those countries who are actually food and farming has mattered for decades. So in typically in those exporting crop exporting countries like Brazil or Argentina, farmers, farming, food production do matter for governments, and they do matter
for elections. But in this case, what's interesting is that the candidates, especially the shock front runner during the election campaigns, A. Xavier Malay, was actually pushing for the opposite, was pushing for liberalizing farming, which would actually be quite positive from a global point of view because that would mean more supplies coming out of Argentina. So we're not talking here
about protectionism and restricting supplies. We would be potentially talking about more soy meal, more corn, more beef coming out of Argentina.
What are we to take away from all of this?
I think the fact that there are many different food risks, food inflation is not going away, it's very sticky. The fact that elections are coming likely to lead to policy changes. All of that points to a very unstable food security situation in the world.
Aggie, I was great talking with you. Thanks for coming on the show.
Thank you so much.
Now let's hear from someone who's studied this problem for years. Professor Tim Benton leads the Environment and Society Program at Chathamhouse in London, and he's worked on food insecurity issues with UK governments, the EU and the G twenty. Tim is someone who thinks about food and food insecurity for a living. Can you paint us a picture of the world's food supply right now?
Well, we've created a globalized food system over the last forty or fifty years, predominantly since the late eighties, which is predicated on producing a very large amount of a relatively small number of highly traded grains so rice, wheat, maize, soy and palm oiland things like that. So we have a global system upon which almost everybody relies in some way, shape or form. So we've got this food system which
is normally very efficient. But as the climate changes and as the demand for food grows and we're undermining the ability to produce that food, the global food system is also getting more volatile. So shocks from the climate is disrupting supplies. We have seen over the last fifteen years or so significant fluctuations in prices, fluctuations in availability, and of course all of those interact with what else is
going on in the world. So in a sense, the climate environmental degradation is making the supply tighter and more volatile at a time where the world is getting tighter and more volatile.
And tim Where are you seeing this most acutely right now?
Well everywhere really. I mean it's not just low income countries and climate vulnerable countries, it's also the rich world. I mean, across the European Union, for example, five million people a year die from diet related ill health, and many of those are people who are really economically marginalized, eating the worst sorts of diets, lots of calories but
not enough nutrition. So given the post Ukraine post COVID cost of living crisis, everywhere in the world has suffered significant food inflation, and whether you're a poor person in a poor country or a poor person in a rich country, that really matters. And inflation of food prices of running
over five percent is happening in all countries. Sixty to eighty five percent of all countries are suffering high food price inflation at the moment, and six percent of lower middle income countries are having significant food price inflation.
The world's two largest economies, the US and China, drive a lot of decisions around the world. How important is that to the global food supply?
Pretty big, but not the only determinant, because the major determinant of the kind of globalized food system comes from the major bread basket region, So production in the US, in Latin America, in Europe, in Indonesian Manasia for palm, oeraland in China and Asia and Southeast Asia for rice and so on. So we got five major bread baskets responsible for maize, soy, wheat, rice, and oil the major commodities.
So all of those countries have a significant leverage on the debate, but nominally at least they are governed by the World Trade Organization, and you know the rules put in place in the late eighties for trade liberalization. But as the World Trade Organization and other multilateral bodies are undermined by governments swinging to the right and pandering to protectionist reasons, the ability to circumvent the trade rules is growing.
And the US has played a part in undermining the WTO and the production and in those bread basket regions and the power of China to dominate some of the markets. They're all part and parcel of the situation. But there isn't one central brain. That's part of the issue with the food system that it's literally a complex system that the behavior emerges from every single farmer, every single trader, every single food company, every single consumer making individual choices,
and it's very difficult. It has no central brain, it's not governed, and it is very subject to events such as wars, trade wars, you know, protectionism, COVID interruptions, port infrastructure getting flooded, and a whole range of other things. Any One of these things can lead to a kind of domino effect that creates a risk that reverberates around the world because of a supply chain interruption.
When we come back, what can be done to stabilize the global food supply Given the way the structure of the world in various trading relationships have changed recently, are there policies that can actually help this?
That's the question for which we could debate for a very long time. There is a need increasingly to think about food security, whether you're in a rich country or a port country, in terms of if the global market falls apart, where does your food come from? Because over the last forty years or so, there has been a lot of a country saying, well, we're really good at growing this, we'll grow an excess of it, we'll export the excess, and we'll buy in what we're not growing.
So trade on comparative advantage. That only works if the world is stable, and if you're a country, a liberalized trading country like the UK, you rely on the global market to supply your feet. So if something goes wrong, you have to have a plan. B are thinking about their plan bias. How do you build resilience? Do you trade with your enemies, do you onshore and develop your
local growing capacity or whatever. So however you kind of square that circle in terms of the world becoming more fragmented, trade becoming more difficult. There are trade offs, and this is why again this becomes politically really important. If you want greater self sufficiency, feed availability might go down and prices might go up, but it might support your local farming and if your farming community is really important for you politically, that might be a route in to that debate.
But the reality of your answer is we want a calm world that is rules based, where everybody plays nicely. But we're not in that world at the moment, and we're not in that world, both because of the geopolitical tensions but also because of climate change.
As you say, there's a lot of facets to this, and it paints a very complicated picture. Is there one thing that you're a specially concerned about right now?
Well, in the short term, I'm especially concerned about the next twelve to eighteen months. Twenty twenty three has been obviously a year of different character when it comes to the weather, on top of which we have a growing at al Nino, which typically impacts a swathe of countries
in the middle of the world. And if you look at the swathe of countries in the middle of the world, whether it is Venezuela, Columbia, DRC, Democratic Republic of Congo, South Sudan, Somalia, Ethiopia, Pakistan, all of those countries are
teetering on the edge of state fragility. So if we have an al Nino that creates floods and droughts on top of already a super hot world in twenty twenty three, hottesst year in record, who knows what the food supply impacts will be and what their impacts will be on migration flows, human displacement, on global food prices and so on.
Are there any politicians or countries that you think are doing it right or are proposing an alternative that could help the situation.
No, but there are emerging shoots I think of hope. So the biggest political challenge is to move to a food system that supplies healthy diets in a sustainable way, and that implies shifting the demand side, so shifting what people eat and how much they eat, rather than producing an oversupply off some grains that end up contributing to dietaral health and getting thrown away, particularly in the rich world.
But within the climate change negotiations, particularly the recognition that food or food systems in general contribute about a third of greenhouse gases means that as we are grappling with the carbon debate, so we have a sectoral plan or vision for transports, we have a sectoral plan or vision for energy generation, we're having to get us start to grapple with a sectoral vision for food systems.
Tim, thanks so much for your time. This was really fascinating. Thank you.
Wes lovely to speak to you.
Thanks for listening to us here at The Big Take. It's a daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen, and we'd love to hear from you. Email us questions or comments to Big Take at Bloomberg dot net. The supervising producer of The Big Take is Vicky Ergalina. Our senior producer is Katherine Fink. This episode was produced by Zenob Sidiki and Federica Romanielo Kilde Garcia
is our engineer. Our original music was composed by Leo Sidrin. I'm Wes Kasova. We'll be back tomorrow with another Big Take.