• Thu. Sep 22nd, 2022

We need American industry to counter the next global food crisis

ByStephanie M. Akbar

Jul 9, 2022

Economic conditions are causing food supply problems around the world, with prices at one 40 years tall and increasing further. Reasons for the constraints range from anomaly to ongoing COVID disruption to geopolitical maelstroms, but all the same, foresee an undeniable outcome: without a concerted course correction, the world will face a generational global food crisis before the end of the year.

There are several levels to hunger. United Nations estimates more than 820 million people face food instability, and nearly 300 million are unable to meet their basic food needs – the basic caloric intake to sustain life. All the region is struggling with a degree of food insecurity, and the World Food Program and the Food and Agriculture Organization of the United Nations identify the most urgent shortages in the Democratic Republic of Congo, Ethiopia, South Sudan, Somalia, Yemen, Afghanistan and Nigeria. These states also have a host of other problems, and any escalation in food shortages will make it even more difficult to achieve lasting humanitarian successes.

Famine is a catalyst for new obstacles to prosperity, security and democratic resilience. For example, according to the opening of the World Bank database on the relationship between food prices and violence, since the patterns of conflict and terrorism of the 1980s tend to be correlated with increases in food prices. While food insecurity is exacerbated by violence, rates of violence consistently increase during and immediately after periods of price spikes.

Before today, food prices saw their biggest increase in three years from 2011 to 2014. Shortly thereafter, the three-year average annual number of terrorist attacks reached more than 14,000, by far the highest recorded number. This data correlation is also true for the total number of incidents and deaths from civil unrest, war and other conflicts, and demonstrates a pattern traceable for almost 40 years.

Assessing current conditions in the wake of this story is unsettling, if not downright daunting. However, a better understanding of the root causes of food insecurity can show that these outcomes are not entirely inevitable. This understanding should also point to tangible solutions for bolstering global supply – for to best aid humanitarian efforts abroad, the most lasting countermeasures already exist through the agricultural and energy industries here at home.

In the United States, the building blocks of food production are under immense pressure. Over the past 18 months, overall energy costs have been up more than 30%, according to the US Energy Information Administration. Farm labor costs increased by approximately 10 percent over the same period, from the US Department of Agriculture, which also finds that agricultural employment is just approaching pre-COVID participation rates.

Adding to production stress: Fertilizers represent on average a 30 percent price increases since March 2021, with key components like ammonia more than doubling their best ratings in the last 10 years (from 2011 to 2014). Potash, urea and other fertilizer ingredients are also high. Feeding the world is impossible without commercial fertilizers, so sustained cost increases complete a perfect storm driven by energy, labor and regulatory hurdles. The problem is only deepened by situations like Russia’s invasion of Ukraine, given that Russia is the world’s largest fertilizer exporter.

These are just some of the economic factors that make food production more difficult and more expensive. This situation exposes populations at risk to even greater vulnerability because while energy, labor and other agribusiness costs in the United States have increased by up to 30%, the prices of food increased between 10 percent and 20 percentfinding a loss scenario for multiple producers domestically while creating disparities for communities overseas.

Regardless of politics, meeting demand globally requires adjustments to foster reliable supply and the importance of U.S. energy, agribusiness, and labor in this equation cannot be underestimated.

Many of the immediate needs to balance this equation are manageable without the political will, and include regulatory reform, allowing for certainty, continued shipping reforms, increased export support and tailor-made workforce training. Addressing the priorities of a single industry can also advance the entire supply chain. For example, oil and gas production in the United States remains stalled due to an inconsistent valuation and regulatory environment in federal and (some) state spaces.

Accounting for about 80 percent of American power today, a stunted oil and gas industry hampers agriculture, manufacturing, and the logistics to produce, process, and transport resources around the world. Perhaps alien to the international aid community, these conversations about domestic policies — that is, interstate pipelines, agricultural commodity credits, or port improvements — are taking on a new importance.

Recognizing that the conditions are in place for an unparalleled food supply challenge, the discussion must not only focus on cause-driven solutions, but also engage and support industry partners to sustain them. Outreach and cross-community alliances are imperative.

The common mission of fighting famine is not only admirable but achievable – and even more so by deliberately meeting and leveraging a US private sector capable of laying the foundation for sustainable global food security.

Ned Rauch-Mannino is a consultant on commercial diplomacy issues. He is a former senior official having held several positions within the United States Department of Commerce, the United States Agency for International Development and as Co-Chair of Prosper Africa.

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