Food Crisis…Between Reality and Efforts to Address its Growing Challenges

The world is facing an unprecedented food crisis that intensified in 2023, as global food supply chains witnessed increasing fluctuations after the Russian-Ukrainian war, which caused disruption to the global food system, whose repercussions extend beyond the borders of the conflict zone. Food, especially wheat and fertilizers, has become unable to guarantee food security for many countries of the world in light of the loss of nearly a quarter of their agricultural lands, and the decline in crop productivity by 40%.

The war led to a decrease in Ukraine’s grain exports to about 23.6 million tons in the 2022-2023 season from 33.5 million tons in the 2021-2022 season, rising food commodity prices around the world, inflation rates and worsening hunger around the world, where about 345 million people suffer from acute food insecurity, which is more than double the number recorded in 2019, according to estimates by the UN World Food Program.

The Strategic Forum for Public Policies and Development Studies “draya” issues a research paper aimed at analyzing the causes and repercussions of the food crisis, presenting the state of food security and nutrition globally and in the Arab world, then dealing with the efforts of international organizations to confront this crisis, and finally reviewing the efforts of the Egyptian state to address it:

1-domestic food price inflation is still high in most low -, middle-and high-income countries, where the inflation rate exceeded 5% in 70.6% of low-income countries, 81.4% of the lower middle-income countries, and 84% of the upper middle-income countries.

2-about 80.4% of high-income countries suffer from high food price inflation.

3-food price inflation in the Middle East and North Africa this year will slow growth to 3%, compared to 5.8% last year.

4-inflation accounts for between 24% to 33% of the food insecurity expected in 2023.

5-some 258 million people in 58 countries or territories faced severe food insecurity in 2022, up from 193 million people in 53 countries and territories in 2021.

6-about 53.9 million people suffered from severe food insecurity in the Arab region in 2021, an increase of 55% since 2010, and an increase of 5 million from the previous year.

7-more than half of the population of the Arab countries, i.e. 162.7 million people, could not afford to adopt a healthy diet in 2020.

The Egyptian state seeks to confront the food crisis by exerting more efforts through the following:

1-reclamation of more agricultural lands, as the area of cultivated lands in Egypt increased by about 9% to reach 9.7 million acres in 2021, and it is targeted to increase the area of the agricultural patch to about 3.3 million acres by 2030, to reach the total area of the agricultural patch to 13 million acres.

2- Expanding the activity of the stock exchange for commodities, and trading wheat on the stock exchange for the first time, which contributed to controlling and stabilizing prices in the local market, in light of the decrease in the price of a ton of flour extracted by 72% to 13.5 thousand pounds instead of 15 thousand pounds, and the decrease in the price of bran by 2000 pounds per ton.

3- Signing a $40 million grant agreement from the European Union, implemented by the Italian Agency for Development Cooperation, to enhance food security efforts in Egypt.

4- Implementation of the “European Union support for food security in Egypt” program funded by a grant of 100 million euros. The current development cooperation portfolio between Egypt and the European Union has amounted to about 3 billion euros.

5- Providing maximum support to the agricultural sector and farmers, and continuing to develop the contractual farming system to encourage the expansion of the cultivation of strategic crops, in addition to efforts to develop Egyptian breeds of livestock to enhance their production.

First: Analyzing the causes and repercussions of the food crisis

According to the latest update on the state of food security in the world on the World Bank website on June 1, 2023, domestic food price inflation is still high in most low-, middle- and high-income countries, as information for the period between January 2023 and April 2023 shows an inflation rate of more than 5% In 70.6% of low-income countries, 81.4% of the lower bracket of middle-income countries, and 84% of the upper bracket of middle-income countries, in addition to the suffering of about 80.4% of high-income countries from high food price inflation.

According to the report, the countries most affected by the rise in food prices are located in: Africa, Latin America, South Asia, and Europe, as shown in the following figure:

Figure No. (1) Food price inflation map

Source: IMF, Havre analytics, trade economics

The World Bank stated in a report entitled “When Destinies Change: The Long-Term Effects of High Prices and Food Insecurity in the Middle East and North Africa Region” issued in April 2023, that food price inflation in the region this year will lead to a slowdown in growth to 3%, compared to 5.8%. , last year. The bank thus lowered its growth forecasts for the region, after its previous estimates, published in October 2022, that the growth rate reached 3.5% in 2023.

The report of the food and Agriculture Organization of the United Nations (FAO) indicates that its food price index reached 143.7 points in 2022, an increase of 14.3% over 2021, the highest level since records began in 1990. The global food crisis has worsened for several reasons, including the increasing number of restrictions on food trade imposed by countries in order to increase domestic supplies and reduce prices, where 22 countries applied 28 bans on the export of food until March 13, 2023, and 10 countries applied 14 measures to limit exports.

A Moody’s report also indicated that global food prices have declined from their record levels recorded in March 2022, following the Ukrainian-Russian war, but it is likely that prices will remain at high levels throughout the current year. Moody’s identified the factors that lead to higher food prices, most notably the ongoing risks to crop production in Ukraine, the problems faced by the Black Sea initiative to transfer grain from Ukraine to the world, in addition to the scarcity of global supplies and climatic fluctuations.

It should be noted here that the prices of wheat and corn have declined in the recent period due to allowing Ukraine’s agricultural exports to resume within the Black Sea Initiative, which allowed the flow of Ukrainian agricultural exports, which contributed to a decline in crop prices by 10-15% from their record levels with the onset of the Russian-Ukrainian crisis.

According to the World Economic Forum’s Global Risks 2023 Report, the food crisis – along with the energy crisis – risks undermining efforts to address long-term risks, particularly those related to climate change, biodiversity and investment in human capital, and this crisis is expected to continue Over the next two years, the risks of a recession, mounting debt distress, and an ongoing cost-of-living crisis are increasing, driving a hole in climate action, and potentially triggering a geo-economic war.

The 2023 Risk Report indicates that failure to cooperate more effectively in mitigating and adapting to climate change would lead over the next ten years to continued global warming, an increase in natural disasters, loss of biodiversity and environmental degradation in general.

Second: the state of food security and nutrition

The global report on food crises 2023, published on the FAO website and released on 3 May 2023, indicates that 258 million people in 58 countries or territories faced acute food insecurity at crisis or worse levels in 2022, up from 193 million people in 53 countries and territories in 2021. This figure is the highest in the history of the report, which was first released seven years ago.

The report added that individuals in 7 countries (Afghanistan, Burkina Faso, Haiti, Nigeria, Somalia, South Sudan and Yemen) have faced catastrophic levels of food insecurity, which indicates the risk of famine and very dangerous levels of malnutrition in several regions of these countries. . Acute food insecurity occurs when a person is unable to consume enough food, which would put their life or livelihood at grave risk.

The “Regional Overview of the State of Food Security and Nutrition 2022” issued by the Food and Agriculture Organization and the International Fund for Agricultural Development confirms that hunger and malnutrition have reached critical levels in the Arab region, especially after the COVID-19 pandemic and war in Ukraine has access to basic foods.

The report reveals that an estimated 53.9 million people experienced severe food insecurity in the Arab region in 2021, an increase of 55% since 2010, and an increase of 5 million over the previous year. The report also warned that moderate or severe food insecurity negatively affected about 154.3 million people in 2021, an increase of 11.6 million people from the previous year.

He also explained that half of the population of Arab countries could not afford the cost of adopting a healthy diet in 2020. The cost of adopting a healthy diet has been increasing in the Arab region every year since 2017, as the cost in 2020 reached $3.47 per person per day.

Third: the efforts of international organizations to confront the food crisis

In April 2022, as part of a comprehensive global response to the existing food security crisis, the World Bank announced the availability of up to $30 billion over 15 months, including $12 billion in new projects. The goal of this funding is to scale up short- and long-term responses along 4 focal points to enhance food and nutrition security, reduce risks, and strengthen food systems: (1) support producers and consumers, (2) facilitate increased trade in food and inputs, and (3) support the most needy families, and (4) investing in sustainable food and nutrition security.

The Bank achieved its commitment target of $30 billion for the food and nutrition security response. Between April and December 2022, the Bank’s food and nutrition security commitments under the new loans exceeded $12 billion, almost half of which was provided to Africa, one of the regions hardest hit by the food crisis. Examples include:

-At a cost of USD 766 million, the strengthening the resilience of food systems in West Africa program is increasing
food insecurity preparedness and improve the resilience of food systems in West Africa.

-An additional USD 150 million grant for the second phase of the food security and Resilience Response project in Yemen, which will help address food insecurity, strengthen resilience, and protect livelihoods.

– A USD 300 million project in Bolivia will contribute to increasing food security, market access, and the adoption of climate-smart agricultural practices.

-A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness for food insecurity and improve the resilience of their food systems.

– A USD 130 million loan to Tunisia aimed at reducing the impact of the war in Ukraine by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy and seed production for small farmers for the upcoming planting season.

-The $3 billion Enhancing Food Systems Resilience in Eastern and Southern Africa program is helping countries in both regions increase the resilience of their food systems and their ability to respond to rising food insecurity.

Fourth: The Egyptian state’s efforts to confront the food crisis

The Egyptian state seeks to confront the food crisis by exerting more efforts through the following:

1- Reclaiming more agricultural lands, as the cultivated land area in Egypt increased by about 9% to reach 9.7 million acres in 2021, compared to 8.9 million acres in 2014. The 2023/22 plan aims to increase the agricultural area by half a million acres within the scope of projects Horizontal expansion, which includes the Mostaqbal Egypt and the New Delta project on the Dabaa axis in the northwestern coast, the Toshka development project south of the New Valley, and the East Owainat project in the southwestern part of the Western Desert.

2- Increasing the self-sufficiency of some strategic crops by expanding agriculture and reclaiming more land, as the state aims to increase the area planted with wheat by about one and a half million acres over the next two years to reach self-sufficiency to 65% by 2025.

3- Providing maximum support to the agricultural sector and farmers, and continuing to develop the contract farming system to encourage the expansion of strategic crop cultivation.

4- implementation of a number of projects in the field of livestock development and maximization of its products. These projects are represented in the establishment of several farms for breeding and fattening cattle of meat breeds and other farms for raising dairy cattle and the establishment of integrated modern automated slaughterhouses in addition to factories for various dairy products.

5-the implementation of giant projects for the development of fish resources in Ghalioun, Fayrouz and Dibba, made Egypt ranked first in Africa in the field of fish farming, and the sixth globally, as the output from fish farming areas in the country has been increased from 1.1 million tons in 2014 to 2 million tons so far.

6-Implementation of the “European Union support for food security in Egypt” program funded by a grant of 100 million euros. Projects related to the remaining amount, estimated at 60 million euros, are being agreed upon. This is to meet the challenges of food security resulting from the Russian-Ukrainian war, in addition to strengthening national efforts in the field of grain production and storage, stimulating climate resilience and increasing strategic grain storage capacities.

7- The current development cooperation portfolio between Egypt and the European Union has amounted to about 3 billion euros. These projects are financed through European financing mechanisms within the framework of bilateral and regional cooperation, and the Blended Finance mechanism.

8– Three phases of the debt swap program for development between Egypt and Italy have been implemented, at a value of 350 million euros, through which 106 projects will be financed in the following sectors: food security, education, agriculture, civil society, environment and cultural heritage.