Food security in 2023: EU response to an evolving crisis

Food security in 2023: EU response to an evolving crisis

Global food security was already under strain before Russia’s invasion of Ukraine.

Food security in 2023: EU response to an evolving crisis

© DOERS / Adobe Stock

Written by Antonio Albaladejo Román.

Food insecurity remains one of the most pressing global challenges. The COVID-19 pandemic and Russia’s invasion of Ukraine have made the food crisis significantly worse in recent years, threatening millions of people worldwide. Despite some promising trends, food inflation remains consistently high, and it depends on a volatile environmental and geopolitical context. The EU has devoted substantial resources to tackling the immediate effects of the crisis. However, in the long run, the key to food security will be sustainable agri-food systems.

2021: Hunger on the rise

Global food security was already under strain before Russia’s invasion of Ukraine. The disruptions caused by the COVID-19 pandemic and the subsequent economic rebound led to severe bottlenecks in global agri-food chains and skyrocketing energy prices in the second half of 2021. In addition to fuelling inflationary pressures on consumers and food producers, the rising cost of energy also affected the price and availability of fertilisers, a critical input for agriculture whose manufacture is heavily dependent on natural gas. As global food prices surged, the number of people facing hunger worldwide rose to 828 million in 2021 – 150 million more than pre-pandemic levels. Nearly 2.3 billion people (30 % of the world’s population) were facing moderate or severe food insecurity. Acknowledging the gravity of the situation, United Nations (UN) Secretary-General António Guterres warned during the UN Food Systems Summit in September 2021 that hunger was ‘on the rise again’. The disruptions felt across the world also hit the EU. In January 2022, annual inflation in the euro area reached 5.1 % (3.5 % for food, alcohol and tobacco), up from 0.9 % in January 2021 (1.5 % for food, alcohol and tobacco), and basic products such as bread became more expensive for EU consumers (7.3 % year-on-year increase in January 2022, up from 1.7 % in January 2021).

2022: Russia invades Ukraine

Russia’s unprovoked attack on Ukraine in February 2022 exacerbated existing challenges to global food security, pushing energy and food prices to historic heights. Before the war, Russia and Ukraine accounted for 34 % of global exports of wheat, 27 % of barley, 17 % of maize and 55 % of sunflower oil. Russian and Ukrainian agricultural exports are particularly important for many African and Middle Eastern countries, where food security was already unstable. Moscow’s exports of natural gas and mineral fertilisers influenced global agricultural markets, and Russia was the world’s largest exporter of nitrogen-based fertilisers, second largest of potassium and third largest of phosphorus (the three most important mineral substances for fertiliser production). To prevent the food crisis from worsening, the EU, the United States and other like-minded countries avoided imposing sanctions on agricultural and food products; Moscow meanwhile weaponised its energy, grain and fertiliser exports. Russia deliberately targeted agricultural production facilities, blockading Ukrainian Black Sea ports for months to prevent Kyiv’s agricultural exports (of which 80 % were seaborne) – until the UN–Türkiye-brokered Black Sea Grain initiative and EU solidarity lanes allowed exports to resume.

The repercussions of Russia’s war for international agricultural markets were swift and severe. In March 2022, the UN Food and Agriculture Organization (FAO) reported an all-time peak in global food prices, which would remain high despite subsequent easing. Fertiliser prices rose sharply as well; this was due to export restrictions in several countries and production cutbacks owing to high energy costs. Humanitarian and non-governmental organisations reported increased difficulties in assisting food-stressed regions on account of rising costs and higher numbers of people in need. Although food availability was never at risk in the EU, European farmers faced higher costs for their main inputs (such as energy, fertilisers and animal feed), which aggravated food inflation. EU fertiliser prices jumped by 149 % in September 2022, following a 70 % fall in European ammonia production owing to high energy prices. The EU also imports large quantities of Ukrainian maize (an average of 11 million tonnes annually) and oilseeds, which are critical for animal nutrition. Finally, extreme weather events in Europe caused significant reductions in key crop yields. As a result, euro area inflation rose to 7.4 % in March 2022, and continued climbing to a 10.6 % peak in November, with food, alcohol and tobacco seeing the highest inflationary increase over 2022 after energy, reaching 13.8 % in December.

2023: What outlook for food security?

Although global food prices fell for the 10th consecutive month in January 2023, food inflation remains consistently high in many countries, reaching 14.1 % in January in the euro area. This mismatch is the result of both a reduced price pass-through from global to consumer prices, and ongoing geopolitical uncertainty fuelling price instability despite some positive trends. Energy prices, which affect farmers and fertiliser producers, already started to decline in the second half of 2022. In addition to containing inflationary pressure on agri-food chains, lower energy prices might influence the use of fertilisers by farmers in 2023, with direct effects on future crop yields. The EU solidarity lanes and the Black Sea Grain initiative have continued to facilitate the safe export of Ukrainian foodstuffs to international markets. The initiative had allowed over 18 million tonnes of grain and foodstuffs to be exported as of January 2023 (of which over 50 % to developing countries) and the agreement is due for renewal in March, after the latest extension. Should Russia refuse to renew the deal, Ukrainian seaborne exports could again be at risk, with dire implications for international markets and food-stressed countries. Even if Ukrainian grain exports were to continue, the country’s agricultural output is likely to be significantly smaller compared with the 2021-2022 season. Indeed, many of the positive trends are highly dependent on geopolitical and environmental factors, and could change abruptly. Weather shocks during 2023 also warrant special attention. Persistent drought, which has severely affected food security in east Africa, is forecast to continue. In Europe, a repetition of the water and heat stress experienced in 2022 could lead to diminished crops yields again this year, affecting EU consumers and global food security, given the bloc’s role as an agricultural exporter.

EU action to strengthen food security

EU concerns over food security are not new, but Russia’s war on Ukraine has made them top political priorities. The current food crisis is the result of several drivers, some of which are circumstantial and already addressed by the EU and the international community. Following the EU leaders’ March 2022 Versailles Declaration, the European Commission put forward a series of measures to ensure global food security and food affordability. Internationally, EU solidarity lanes have allowed Ukraine to export over 23 million tonnes of agricultural products to global markets. The EU has earmarked €8 billion between 2020 and 2024 for global food security, and will further support the food systems of around 70 countries under the 2021‑2027 multiannual financial framework. Acting multilaterally, the Commission is a key partner in eight global coalitions to strengthen food security, and has actively advocated lifting agricultural export restrictions.

Domestically, the Commission has pursued the double objective of mitigating the war’s immediate impact on EU farmers and consumers while boosting agricultural production to meet global demand. This support for farmers affected by higher input costs included advances of direct payments, a €500 million package, and temporary State aid measures. The Commission also permitted the temporary use of fallow land to increase food and animal feed production, and an easing of import requirements for animal feed. Member States were also encouraged to reduce value added tax rates for staple foods, and use the Fund for European Aid to the Most Deprived to cushion the effect of food inflation on lower-income households.

To increase the EU’s agricultural resilience to external shocks, the Commission aims to reduce Europe’s dependency on imports of critical inputs, in particular fertilisers and plant-based proteins for animal feed. Over the long term, the decisive challenge for food security in Europe and the world will be the transition to sustainable and resilient food systems capable of feeding a growing population. This objective is at the core of the farm to fork strategy, which aims to make EU food production more resilient and environmentally neutral while remaining competitive and able to provide EU consumers with affordable and nutritious food. To that end, in a March 2022 resolution, the European Parliament called for a reinforced European strategic autonomy in food, feed and fertilisers. In a July 2022 resolution, Parliament encouraged the EU to make the global transformation to sustainable food systems a central objective of its international financial instruments.

Source :https://epthinktank.eu/2023/03/02/food-security-in-2023-eu-response-to-an-evolving-crisis/

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