FAO puts forward proposals to tackle food shortages

The HEAD of the Food and Agriculture Organization of the United Nations (FAO) called on G7 countries to help prevent future food shortages as the Ukraine crisis cuts food supplies, raises prices to record highs and threatens already vulnerable countries in Africa and Asia.

“We need to actively seek and find ways to fill potential future gaps in global markets by working together to promote sustainable productivity gains where possible,” CEO Qu Dongyu told G7 agriculture ministers at a meeting in Stuttgart, Germany.

Qu was invited by Germany, which chairs the G7, to discuss the implications of the Ukrainian crisis for global food security.

Already in 2021, an estimated 193 million people were severely food insecure and in need of urgent assistance, nearly 40 million more than in 2020.

RUSSIA and Ukraine are important players in global commodity markets, and the uncertainty surrounding the conflict has caused price spikes, especially for wheat, corn and oilseeds, and fertilizers. This increase comes on top of already high prices driven by robust demand and high production costs as a result of the covid-19 pandemic .

In March, the FAO Food Price Index reached its highest level (160 points) since its inception in 1990 and fell only slightly in April.

Wheat EXPORT forecasts for both Russia and Ukraine have been revised down. And while other market players such as India and the European Union have increased their offerings, supply remains tight and prices are likely to remain elevated in the coming months, Qu said.

Countries that rely heavily on wheat imports include Egypt and Turkey, as well as a number of sub-Saharan countries such as Congo, Eritrea, Madagascar, Namibia, Somalia and Tanzania. Meanwhile, countries heavily dependent on fertilizers imported from Russia include major exporters of grains and high-value commodities such as Argentina, Bangladesh and Brazil.

Suggested Solutions

According to FAO, market transparency is critical. That is why FAO welcomes any effort to strengthen and expand the Agricultural Markets Information System (AMIS), an inter-agency platform designed to improve the transparency of food markets, launched in 2011 by the G-20 Ministers of Agriculture following the global food price shocks of 2007/08 and 2010 years. 

FAO has also proposed the establishment of a global food import financing facility to help countries cope with rising food prices. This mechanism, which is strictly needs-based and limited to low- and lower-middle-income countries, net food importers and selected beneficiaries of the International Development Association, could benefit nearly 1.8 billion people in the world's 61 most vulnerable countries.

This mechanism was designed with intelligent conditions in mind to act as an automatic stabilizer for future funding. Countries will commit to additional investment in agriculture, thereby reducing future import requirements.

In his G7 address, the FAO Director-General also urged governments to "refrain from imposing export restrictions that could exacerbate rising food prices and undermine confidence in world markets."