By Gustavo Ferreira and Jamie Critelli
According to the United Nations, Food and Agriculture Organization, global food prices have increased sharply throughout 2020 and 2021 and reached their highest levels in nearly six years. This increase in food prices raises concerns over inflation, food insecurity, and potential unrest in some developing countries because prices are approaching the levels seen during the food crisis of the late 2000s – a period characterized by significant social and political crises. Food inflation will adversely impact Africa more severely than any other part of the world because of perennial problems of food insecurity afflicting this region. The U.S. Army Civil Affairs community must continue to follow this situation closely and identify any emerging food crises that could bring added sociopolitical instability to certain parts of Africa.
Amid the Covid-19 pandemic, global food prices have reached their highest in almost seven years. While prices are not yet at the levels seen during the food crisis of the late 2000s, the current trend raises concerns about food inflation and hunger. The World Bank estimated that the last food crisis pushed 130 million to 155 million people into poverty worldwide in 2008. It also sparked food riots and political unrest that threatened governments and social stability in Africa, Asia, the Middle East, and Latin America and the Caribbean. In Africa, massive public protests erupted in Burkina Faso, Mozambique, Cameroon, Egypt, Guinea, Mauritania, and Senegal. More recently, in 2019, India faced a political crisis sparked by the rising prices of onions. The ubiquitous presence of onions in Indian cooking and its affordability even for poor segments of the Indian population contributed to the widespread impacts.
The current surge in food prices has been driven by market disruptions induced by the COVID-19 pandemic, rising freight costs, and tight global commodity supplies caused by lower than anticipated crop production and massive commodity purchases by China. Chinese authorities are rebuilding their domestic grain stocks, trying to prevent further increases in domestic food prices – note that grain reserve levels in China are a state secret, and the rest of the world can only guess China’s next trade moves. Lastly, previous years of low commodity prices eroded the incentives to expand production and invest more in agricultural research and development. Due to very tight global supplies, many countries limit their trade of agricultural products to preserve their domestic stocks and put a lid on domestic food prices. For instance, the Russian Federation is imposing export taxes and quotas on wheat, corn, barley, and rye. Ukraine is following suit and is setting up an export quota for corn for this year. Unfortunately, such export restrictions will only further limit supplies in international food markets, thus contributing to price increases.
Because of the current global distribution of vaccines, industrial nations will be the first ones to address their pandemic woes. Their economies will likely be the first ones to rebound. The reopening of these economies will lead to higher demand for certain food products and services. (e.g., restaurants, casinos, hotels, school lunches, etc.). This will, in turn, add upward pressure to food prices. On the flip side, developing countries will lag with their vaccination progress and possibly face prolonged economic malaise and rising food prices. This article seeks to bring these issues to the attention of Civil Affairs operators and planners who can incorporate them into their planning process. Consideration of this key metric will allow for the more efficient and targeted allocation of resources and efforts.
Global Food Prices
The FAO Food Price Index (FFPI)* averaged 118.5 points in March 2021, marking ten months of consecutive increases and the longest rising streak in a decade (see figure 1). The FFPI is now registering its highest monthly average since July 2014, driven mainly by sharp price increases for vegetable oils and meat dairy products.
Figure 1. FAO Food Price Index, 1961-2021
Source: The FAO Food Price Index (FFPI).
* Technical Note: The FAO Food Price Index (FFPI) measures the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices weighted by the average export shares of each group over 2014-2016. These categories are (1) cereals; (2) vegetal oil; (3) dairy; (4) meat; and (5) sugar.
Africa is a global buyer of wheat and rice. While Africa produces rice, its demand for it has outpaced local production and has increased imports. On the other hand, Africa has struggled to increase its wheat production and continues to be a net importer of this grain. According to the FAO, the international prices for these two commodities have increased throughout 2020 and 2021 (FAO, 2021). Other sources such as the Economists Intelligence Unit predict significant price hikes for major commodities in 2021. Commodity prices are expected to return to more normal levels from 2022 onwards, assuming no further shocks or disruptions (EIU., 2021).
Who is likely to be most impacted by food inflation?
If this trend continues, higher food prices could: (1) adversely affect low-income consumers that tend to spend larger shares of their disposable income on food; (2) undermine ongoing efforts to reduce poverty; and (3) disrupt political and social stability of food-importing countries. In 2020, the Global Food Security Index ranked 113 countries in terms of food security. Its scores range from 0 (least food secure) to 100 (most food-secure) and are based on the three core issues: food affordability, availability, and quality. The countries with the top three scores were Finland (85.3), Ireland (84.8), and the Netherlands (79.9). Global food supply chains have gone through significant strain during the COVID-19 pandemic. The scores of this index for 2021 may present a grimmer picture.
The Famine Early Warning Systems Network (FEWS NET)
The FEWS NET was created by the United States Agency for International Development (USAID) in1985. This organization is the leading provider of early warning and analysis on acute food insecurity around the world. FEWS latest assessment shows that Africa has the worst outlook on acute food insecurity (see figure 2). The forecast is particularly severe in regions within Southern and Eastern Africa (i.e., The Horn of Africa) and Yemen.
Figure 2. FEWS mapping of global food insecurity.
Source: The Famine Early Warning Systems Network (FEWS NET).
Table 1 shows African countries currently exhibiting the most severe food security crises when broken down by regions. Not surprisingly, there is a clear overlap between this list and the countries ranked at the bottom of the 2020 Global Food Security Index (countries highlighted in red in tables 1 and 2). This data reveals how these nations are highly vulnerable to shocks like the COVID-19 pandemic and the emerging food inflation. After being impacted by prolonged armed conflicts, adverse weather conditions, trade disruptions, plagues, etc., these countries are now highly dependent on food imports or food aid.
Table 1. Countries facing food security crises (FEWS).
Food aid programs
Higher prices may force food aid programs to curtail their commodity purchases if limited budgets continue. These organizations may also have to deal with the lower availability of certain commodities because of lower global stock levels. In addition, food aid programs are facing growing logistical challenges such as shortages of empty containers and rising freight costs. These factors combined pose real threats to the ability of food aid programs to alleviate hunger and food insecurity in parts of Africa. In addition, such disruptions could lead to children being withdrawn from school and forced into the labor market to contribute to family welfare. In worst-case scenarios, family members may join violent, extremist organizations (VEOs) as another coping mechanism. It is important to note that food assistance rations sizes for refugees have been reduced due to inadequate funding (FEWS, 2021). These reductions range from 10 to 60 percent across six Eastern African counties.
Conclusion and Recommended Actions
The U.S. Army and AFRICOM should closely monitor the situation in African countries that demonstrated less resilient food supply chains back in 2020 (see table 2 in Annex). These nations are most vulnerable to recent spikes in food prices and could face political instability and social unrest soon. In addition, AFRICOM should closely monitor agricultural conditions and government policies in these countries - any crop failure could have dire repercussions in that region. By anticipating a severe deterioration of food security in a country or region, AFRICOM will gain precious additional time to react, adjust planning, elevate security postures, deploy necessary assets, and facilitate aid operations by international organizations. It is also imperative to watch for any signs of any new Desert Locust swarms developing in Eastern Africa. A crop failure in the Horn of Africa would add tremendous amounts of stress to an already unstable region. Lastly, Civil Affairs units and teams should pursue training opportunities focused on global and local agricultural systems. The 38G/6U agri-business and food specialists are well-positioned to train Soldiers and Commanders on how to conduct an initial assessment of the agricultural sector in their areas of operations. This training would: 1) equip Soldiers with the basic knowledge and skillsets to monitor and assess food security levels in their regions; 2) allow them to identify key factors and nuances of local food supply chains that should be incorporated into operational planning. For example, Civil Affairs teams should be able to identify the key staple crops in a region and gather market information and consumer sentiments from international and local sources. Furthermore, 38G/6U agri-business and food specialists can also serve as a reach-back capability when Commanders and Civil Affairs operators need additional expertise and technical advice.
As global prices of food items such as feed grains, vegetable oils, or sugar continue to increase this year, AFRICOM should monitor and include these indicators in their planning efforts. Furthermore, our military leadership should treat them as potential sources of political instability and social unrest in Africa. This approach could have significant payoffs as it would provide the necessary early warning to develop and deliver targeted responses. On the other hand, ignoring the indicators of stressed food supply chains could have dire consequences and set us back years or decades in our regional stabilization efforts.
Table 2. Ranking of African nations in terms of food security in 2020.
Capt. Gustavo Ferreira is a Senior Agricultural Economist with the U.S. Department of Agriculture and serves as an Agricultural Officer (38G) at the 353d Civil Affairs Command, U.S. Army Reserves. Prior to joining the Federal Government, he was an Assistant Professor at Virginia Tech University’s Department of Agricultural and Applied Economics and worked as a Postdoctoral Researcher at Louisiana State University. He holds a Ph.D. in Agricultural Economics from Louisiana State University, an MBA from McNeese State University, and a bachelor’s degree in Economics from Lusiada University (Portugal).
Maj. Jamie Critelli is a Civil Affairs Officer serving in the 353CACOM as an Agricultural Officer (38G). He is an independent farm business owner and has worked globally in agriculture supply chain roles on 5 continents. He graduated with honors from Cornell University and holds a Master of Business Administration in Supply Chain Management from Eidgenössische Technische Hochschule (ETH), Zurich.
The views and opinions in this article do not represent any entity of the US government or Department of Defense.
Lauren Ploch Blanchard (2016). Conflict in South Sudan and the Challenges Ahead. Congressional Research Service, R43344.
The FAO Food Price Index (2021). Food and Agriculture Organization of the United Nations
The Famine Early Warning Systems Network (2021)
The Global Food Security Index (2021). The Economist Intelligent Unit.
Kansas State University (2021).Grain Supply and Demand (WASDE) Grain Sorghum Supply & Demand Charts.