The global food crisis demands support for people, open trade and more abundant local harvests

Food insecurity has been on the rise since 2018. Even before Russia invaded Ukraine, the increasing frequency and severity of climate shocks, regional conflicts and the pandemic were all taking their toll, disrupting food production and distribution and increased the cost of feeding people and populations. families.

The situation took an even more dramatic turn with the war in Ukraine. This pushed food and fertilizer prices even higher, hurting importers and prompting several countries to impose export restrictions. The result is an unprecedented 345 million people whose lives and livelihoods are immediately threatened by acute food insecurity. And globally, more than 828 million people go to bed hungry every night, according to the World Food Program.

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The impact of food shock is being felt everywhere. The suffering is worst in 48 countries, many of which rely heavily on imports from Ukraine and Russia, mostly low-income countries. Of these, about half are particularly vulnerable due to severe economic hardship, weak institutions and fragility.

Besides the human toll, the financial costs are also increasing. A new IMF staff paper estimates that the impact of rising food and fertilizer import costs for highly food insecure people will add $9 billion to their balance of payments pressures in 2022 and 2023. This will erode countries’ international reserves and their ability to pay for food and fertilizer imports.

In many places, even though food prices have declined somewhere from recent peaks, persistently high food and energy prices have fueled a cost of living crisis that could deepen poverty and harm growth, potentially fueling political instability.

As a result, policy makers in many countries have introduced fiscal measures to protect people from the current food crisis. For this year alone, we estimate that high-risk countries need $7 billion to help the poorest households cope.

QUICK RESPONSE

Strong and rapid political action is needed in four areas to alleviate the global food crisis and avert human suffering.

First, quickly and adequately support those vulnerable to food insecurity through humanitarian assistance from the World Food Program and other organizations, alongside effective national fiscal measures. Policymakers around the world should prioritize tackling inflation and protecting the most vulnerable to ease the burden of the cost of living crisis. Short-term social assistance should focus on providing emergency food relief or cash transfers to the poor, such as those recently announced by Djibouti, Honduras and Sierra Leone. Where this is not possible, second-best subsidies and tax measures can provide temporary relief.

Second, keep trade open, including within regions, to allow food to flow from surplus areas to those in need. We should build on the progress made under the Black Sea Grains Initiative and at the 12th World Trade Organization Ministerial Conference by urgently removing export bans imposed by major food producers. Protectionist measures are only worsening the food crisis, accounting for up to 9% of the increase in world wheat prices, according to the World Bank.

Third, increase food production and improve distribution, including ensuring adequate access to fertilizers and crop diversification. Increasing trade finance and strengthening supply chains are essential to weather the current food price shock. The World Bank and other multilateral development banks are playing a key role in increasing trade finance for agricultural and other food products and their support to countries for essential logistics and infrastructure upgrades.

Fourth, investing in climate-resilient agriculture will be vital to increasing future harvests. More intense and unpredictable climatic events increase food insecurity. Low-income countries, particularly in sub-Saharan Africa, are among the least prepared to deal with the effects of climate change. Solutions must be tailored to country circumstances, emphasizing low-cost, high-impact measures, such as investing in new crop varieties, improving water management and dissemination of information. For example, Ethiopia, Kenya and Rwanda are leveraging mobile technology to provide farmers with rainfall forecasts to optimize crop planting and the purchase of crop insurance.

DECISIVE ACTION

The international community must also take decisive action to ensure that the necessary financing is in place to deal with the immediate crisis and to strengthen food security in the medium and long term.

Specialized food security agencies, such as the World Food Program and the Food and Agriculture Organization of the United Nations, must be adequately funded, as they play a vital role because of their local presence in many countries and an unwavering attention to the human cost of acute food insecurity.

More grants and concessional funding from donors and international organizations are urgently needed to support cash and in-kind assistance to the most food-insecure people. In some countries, debt relief will also be needed.

A new food shock window under IMF emergency financing is expected to be approved by our Executive Board this week. The proposed window will provide increased access to emergency funding for one year for the most vulnerable countries. When grants and concessional financing from partners are not enough, or an IMF-supported program is not possible, it will provide a new channel for IMF support.

This global food crisis is having a staggering humanitarian impact and significant financial costs. This requires a comprehensive and well-coordinated approach to ensure complementarity and maximum efficiency in the use of resources. Together with the World Bank and our global partners, we recently issued a second joint statement calling for action against global food insecurity.

We must all act now to alleviate the suffering of those suffering from hunger, supporting countries that take strong political action with the funding they need.

Kristalina Georgieva is Managing Director of the IMF, Sebastián Sosa is Deputy Chief of the Strategy Unit and Lending Policy Division in the IMF’s Strategy, Policy, and Review Department (SPR), and Björn Rother is Head of the Concessional Loans Division at the SPR.

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