By Dr. Sheikh Selim
Social food protection schemes and local government initiatives can help ensure sustainable food distribution
The Covid-19 crisis is certainly an opportunity to reflect and realise where we stand in terms of the bare necessities of life; and one of these is global food security.
The World Economic Forum’s (WEF) recent analysis identified that with the current state of agriculture and food practice, the world would have to meet 60 percent more food demand in 2050. However, with the 2019 rate of productivity growth, India and China, two large agricultural producer-consumers, will not be able to meet 41 percent and 39 percent of their own food demand by as early as 2030, respectively.
With the ongoing pandemic crisis, these projections raise an important question; what impact will food shortage in large producer-consumer countries have on regions that are net importers of food (eg the MENA)?
Unfortunately, India and China are the most vulnerable to challenges of sustainable agriculture. India accounts for 30 percent of global greenhouse gas emissions and 70 percent of global freshwater withdrawal.
China feeds 22 percent of world’s population, but even with one of world’s largest workforce in agriculture, China is importing grain and soybeans.
While urbanisation, agricultural policy and transition of workforce remain the commonly argued key socio-economic challenges underlying the projected food shortage in China and India, challenges in sustainable agriculture, such as loss or misuse of arable land and acute shortage of water, require immediate attention.
The global pandemic will make this scenario even more complex and may force the projected food shortage in India and China (and consequently in the region) to strike earlier than 2030.
The lockdown policies of countries will result in an economic recession soon. Global trade on service and manufacturing will suffer low or no growth. Coupled with the projected food shortage, this is very likely to have a knock-on effect on the import price of food.
Many countries of the MENA region which are net importers of food are likely to pay the additional premium. This concern is more serious if the entire food supply chain is adversely affected. In that case, food importing regions will bear the dual cost of agricultural as well as agri-business related import price hike.
The recession-led loss in industrial trade will therefore create the scope of an implicit tax on inelastically demanded agricultural and agri-business import. With imminent food shortage in the domestic economy, India and China (who are also exporter of industrial products and may be forced to import food in large volumes) will seek and exploit the undue incentive … i.e. a moral hazard in food trade may not be far from us.
In the most recent G20 Agricultural Ministers’ Meeting, the FAO chief highlighted that the impact of the Covid-19 pandemic on food security can be mitigated by building local resilience around food distribution and management and avoiding measures that disrupt the food supply chains.
The meeting recommended ensuring public-private partnership and innovation that may include the diffusion of e-commerce tools, development of newer business and trade models and strategic policy cushions to strengthen and protect food supply chains.
For some parts of the GCC, the importance of these has been identified before the crisis, on which countries like UAE, Kuwait and Saudi Arabia already initiated the FAO-partnered local process of structural adjustment.
However, IFPRI’s Global Food Policy Report 2020 argues that the ongoing local challenges in many parts of the MENA region continue to be the main obstacles to achieving inclusive food security. The report prescribes inward-oriented approach (such as social food protection scheme) and local government initiatives to ensure sustainable food distribution.
To what extent the MENA region countries can make use of these advices, however, remains another challenge.
Dr. Sheikh Selim, programme director of economics; programme director of money, banking and finance; head of education, University of Birmingham, Dubai.