Miller Magazine Issue: 149 May 2022

89 INTERVIEW MILLER / MAY 2022 in response to gas prices, which places additional stress on fer- tilizer and food markets. Second, high oil prices are significant because they make otherwise costly alternative energy sourc- es, like ethanol and biodiesel, more competitive. Because these biofuels rely on food crops like corn, soy, sugarcane, and palm oil, high oil prices can result in the diversion of food crop land to biofuel production, depleting food-related yields even further. What historical food price crises are helpful to consider by comparison? Two past food price crises are helpful references. In the early 1970s, prices rose rapidly, peaking in 1974 before settling at a level higher than before the spike. Some of the causes were so extraordinary that they are difficult to remove from context — massive grain sales to the Soviet Union of a significant portion of the U.S. wheat crop; drastic moves by OPEC to quadruple the price of oil and embargo oil sales to the United States. Other factors were less extraordinary — changes in monetary policy that devalued the dollar and created a surge in demand for U.S. agricultural exports; changes in farm policy that decreased pro- duction acreage and reduced government-held food reserves; bad weather and poor production in key growing areas that re- sulted in a decline in global food production for the first time in several decades. The bottom line is that the price spikes result- ed from multiple factors that were easy to identify, none of which necessarily reflected permanent or long-term shifts in the global food system. Fast forward to late 2006. Food commodity prices spiked and stayed elevated until falling in 2008, only to surge again in 2010-11. In certain respects, the crisis reflected a similar con- fluence of factors as the spike in the 1970s — weather-related yield declines, high energy prices, low food reserves, and a weak U.S. dollar. But other factors also played a role, and they reflected potentially permanent or long-term shifts in the global food economy that were new since the 1970s: increased finan- cial speculation in agricultural commodity markets; government biofuel mandates that further coupled food and fuel prices; and increased demand from developing nations like China and India for grains to use as feed for meat consumption. The food sys- tem was more globalized, more dependent on the production of large exporters, and potentially more vulnerable to systemic shock from a broader range of market forces. Instability resulting from the food price increases contributed to unrest in countries across the world. How does the current situation compare to these past food price crises? Factors that contributed to both past crises are generally present here — high energy prices and poor production in key growing areas, including China, which is anticipating its worst wheat crop in history. And the long-term stresses on the food system that were evident in the mid-2000s remain challenges today. What is more troubling about the current situation, how- ever, is that food and fertilizer prices reached alarming levels even before the invasion of Ukraine, with supply chains still re- covering from the pandemic. Against this backdrop, the poten- tial cascade of food system impacts from the war in Ukraine is difficult to overstate. Or maybe I should put it another way. The last food price crisis was referred to as a “silent tsunami” that would affect every con- tinent on Earth. What happens if most of the conditions that led to that last tsunami begin to align during a global pandemic, and then a nuclear power cuts off a key breadbasket of the world? This is the risk we must now consider. ‘WE ARE WITNESSING THE RISK OF SYSTEMIC COLLAPSE’ What food shortages in particular will result from the war in Ukraine? Russia and Ukraine are two of the largest exporters of wheat, maize (corn), rapeseed, barley and sunflower oil. Close to 50 nations are dependent on Russia and Ukraine for over 30% of their wheat imports. But when we consider shortages or supply impacts, the real takeaway is that the price impacts and volatility will extend to other food commodities, and these impacts will be particularly severe in regions already faced with significant levels of food insecurity. The price impacts will extend to other commodities as importers shift demand to other products and other exporters in search of potential substitutes (for example, as importers turn to palm or soy oil to replace Ukrainian sun- flower oil). These impacts will be particularly severe in some of the most food-insecure regions of the world not only because they rely directly on Russia and Ukraine for a high proportion of their food imports, but also because they are generally more vulnerable to price spikes and volatility. Eritrea, for example, historically one of the most food-insecure nations in the world, imports nearly all of its wheat from Russia and Ukraine. As prices rise across all food commodities, low-income households in net food importing countries will be most severely affected. They spend a greater proportion of their income on food, and staple food commodities like corn, wheat and rice make up a greater proportion of their diets. In the most dire situations, the risk will be famine. In recent years, the U.N. World Food Programme, the most important mechanism for distributing global food aid, has purchased half of its wheat from Ukraine. All of this, of course, underscores the reality we risk losing sight of by characterizing the current situation as a “crisis” caused by the war. The food security of millions of people is currently threatened because the global food economy leaves them vulnerable every day to forces over which they have no control. The war in Ukraine did not create that vulnerability. It was created by policies of planned dependence. What we are witnessing is design failure. We are witnessing the risk of fore- seeable, systemic collapse.