Home > Uncategorized > The disruption of food supply and distribution chains as a vile and criminal act

The disruption of food supply and distribution chains as a vile and criminal act

In January 1980 Jimmy Carter enacted a grain export embargo against the Soviet Union because of the 1979 Soviet invasion of Afghanistan. The embargo was ineffective as the resulting gap in Soviet imports, at the time and for quite some years to come a net grain importer, was filled by countries like Argentina. In 2022 things have changed. After 2000, Russia as well as Ukraine became major grain exporters, playing an important role in global food supply chains. In both countries production as well as exports have increased by leaps and bounds, which was enabled by increases in acreage and yields (graph 1 for wheat, graph 2 for maize). All data from this source. The invasion of Ukraine and the ensuing war will disrupt these chains not by halting imports but by disrupting production and exports of grain (even when at the time of writing trucks with agricultural seeds are still driving from the Netherlands to Russia (private information)).

In fact the disruption of food security has already happened. Despite record harvests, the post 2014 conflict in eastern Ukraine caused food insecurity and malnourishment for millions, underscoring the well known fact that hunger and malnutrition is a problem of distribution and entitlements and provision, not of production. The coexistence of domestic shortages and hunger with exports of food grains can, in an historical context, be compared with the Irish famine even when the situation in Ireland was rationalized by extreme free market ideologies while the situation in Eastern Ukraine was rationalized with extreme nationalist mythologies. In both cases, great power politics disrupted production and distribution.

Anyway, as a result of the spectacular increase in production and despite war related shortages in Ukraine itself supply chains have changed as spectacular. In just a couple of years Russia as well as Ukraine have become major exporters of grain (graph 3) and countries like Egypt and Turkey are highly dependent on imports of ‘black earth’ grain, while on the other side of the supply chain producers of seeds and fertilizers and all kind of pesticides have a good time, too. Total wheat and maize exports of Ukraine and Russia increased from almost zero to 20 and even 30% of total global exports in only two decades. Dazzling. Increases of agricultural yields of 100 to 250% in two decades in combination with increases in acreages which are as large or even larger are ‘of the scale’. And the potential for additional growth seems high- a good thing, considering a global population which is supposed to increase with another 2 billion people during the next four decades (as long as between 1980 and now). In a historical perspective this can only be compared with the increase in global supply which took place when, after the end of the Civil War, the production of grains in combination with cheap mass transport led to a substantial increase of availability of food in Europe and, as food prices declined, quit an increase of real income as well as an improvement of health of the population. The fast increase in agricultural output of Russia and Ukraine must be rated to be one of the most significant global developments of the last two decades.

The invasion of Ukraine brings this to and end. It will lead to shortages and high prices which can not be countered by relying on market forces. Unless other producers step in these shortages might persist for many years – . High food prices will be especially detrimental to poor people. It will lead, even in the short run, to more malnutrition and worse health for untold millions of people. Alas, the rather Malthusian view of somebody like Andriy Yarmak can’t be dismissed: high energy prices will lead to higher prices of chemical fertilizers and transport, too. Which is why I consider disruptions to food production and supply chains to be a crime against humanity. Mind: during the neoliberal epoch, much time and effort and intelligence and political power was spent on guaranteeing the rights and wealth of capital owners, especially against the background of the globalisation of production and supply chains (see the work of Quinn Slobodian). More attention has to be spent on the interests of workers, farmers and consumers even if this comes at the cost of capital owners or, to be more precise, in this case the owners of the land – and not just the land in Ukraine and Russia. In the end, high agricultural prices are a boon for landowners, which can charge ever higher rents , not for farmers (unless these own the land). Considering the brutality of present events, this all might sound more than a bit idealistic. But we do need to counter nationalist perspectives and mythologies. We still need the idea that ‘producing stuff is glorious’, surely, but not only, when it comes to food. We can do it, we need to do it.

  1. Ken Zimmerman
    April 1, 2022 at 1:32 pm

    Russia and Ukraine are mainly commodity exporters. Energy and food. First let’s talk about food. Together, the two countries involved in this war export about a quarter of the world’s wheat exports: Russia 18.4%; USA 15.7%; Canada 13.5%; France 10.3%; Ukraine 7.03%; Australia 6.07%; Argentina 5.53%. Wheat is important because it’s a staple grain, responsible for about 20% of total human calorie consumption. So that’s a big deal. But it’s worth noting that Russia and Ukraine also export a respectable piece of the world’s barley and corn. In fact, data from the International Grains Council pegs Russia and Ukraine’s combined share of total global grains trade at 24%! In any case, it’s no surprise that food prices are already soaring.

    Between April 2020 and December 2021, the price of wheat increased 80 percent, according to data from the IMF. That was on a par with rising costs for corn and higher than increases for soybeans or coffee. David Laborde, a senior research fellow at the International Food Policy Research Institute, said the crisis would “likely have an immediate impact on the global wheat market stability.” But the real test for the global food supply would be in four months, he said, when the next wheat harvest would begin. “By then, if farmers could not harvest due to lasting military operations, or if port facilities and railroads have been damaged, the situation will be particularly gloomy,” he said. “Many countries in North Africa and the Middle East are particularly dependent on wheat from Ukraine and Russia and likely to be hard hit.”

    Russia, the world’s largest wheat exporter, already limited its own shipments of wheat last year with an export tax designed to hold down domestic food prices. Further restrictions could prompt concerns about social unrest in other countries, particularly in Turkey, Egypt, Kazakhstan and other parts of Europe that import the wheat. And since agricultural commodity markets are global, any reduction in the wheat supply could push up demand and prices for wheat grown in other parts of the world, including Australia, Argentina and the American Midwest. The outcome partly hinges on whether countries decide to announce sanctions on Russian food, or if Russia responds with further limits on its own exports or retaliatory sanctions on foreign goods.

    Analysts at Rabobank said in a note February 22, that two-thirds of Russian wheat and barley for the season had already been exported, but that if sanctions ended up removing the remainder of the crop from foreign markets that could drive global prices up by nearly a third. The effects on global grain prices will partly hinge on what China decides to do, the analysts said. China imports massive amounts of corn, barley and sorghum for animal feed from world markets. It could choose to buy those commodities, as well as wheat, from Russia instead of other countries. In such a situation, the impact of sanctions on global grain markets would be relatively small, they said. On February 21, China began approving imports of Russian wheat that had long been blocked because of Beijing’s concerns over fungus and other contaminants. The countries announced that China would begin importing Russian wheat and barley on February 8, shortly after President Vladimir V. Putin of Russia visited China ahead of the Beijing Olympics. China has emerged as one of Russia’s strongest potential trade partners in the event of further sanctions from the West. Chinese leaders have refused to condemn the Russian invasion of Ukraine, though they have also called for respecting national sovereignty.

    Also of concern. Russiaʼs invasion of Ukraine has had a ripple effect across the globe, adding to the stock marketʼs woes. The conflict has already caused dizzying spikes in energy prices and is a reason for Europe to raise its military spending. Russian naval forces appear to have closed shipping traffic in and out of the Sea of Asov. @LLIntelligence data showing no movement through the Kerch Strait with a heavy build up of vessels anchored in the southern anchorage. Full story via @LloydsList.

    • merijntknibbe
      April 1, 2022 at 1:48 pm

      Dear Ken,

      a very nice and thoughtful reaction. I have only one thing to add. A simple truth which we have to repeat.

      Soaring food prices are live threatening to the poor.

  1. March 9, 2022 at 2:59 pm
  2. March 22, 2022 at 1:24 pm
  3. April 1, 2022 at 1:02 am
  4. April 3, 2022 at 5:02 pm

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