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| Credit: The Week |
What is the way out of the global cost of living crisis? Food energy and basic commodity prices have reached record highs. Developing countries are suffering the most. What will happen if inflation stays high? It is normal for prices of goods and services to rise steadily over time. Most economists believe that it is healthy for inflation to be around 2%, but many countries are reporting a sharp rise in food and fuel prices. In European countries, using Euro, inflation reached a record high of 8.1%. The UK has experienced the highest level in 40 years. The government announced a $19 billion package to help families, the growing supermarket, and pay the energy bills. Recently, high living costs have been a major election issue in Australia, Colombia, and France. The crisis is being blamed on a shortage of workers, pandemic, and the supply chain backlog. Russia's attack on Ukraine has also been considered one of the factors for pushing up prices of commodities such as petrol, natural gas and wheat, and cooking oil.
Its effects are being felt most in
the world's poorest communities. The charity ActionAid found that some
families were spending almost four times as much as before the Russian invasion
of Ukraine. ActionAid looked at average prices in 13 countries in Africa, Asia,
Latin America, and the Middle East. The average price of bread and pasta
increased by 50%, petrol by 63%, and fertilizer by 83%. In the Horn of Africa,
where 20 million people are starving, some are paying double or triple the
price of bread and cooking oil.
Reason:
There are really three things we
have seen in rising prices around the world. Russia's invasion of Ukraine has
further boosted energy and food prices, and rich nations have been forced to
maintain too low-interest rates which was the right switch to get us out of the
pandemic, but they left them for a very long time. Because of that, the
prices soared up. (Sandher J.)
Current state of the global food
system:
The rise in living costs is driven
by three factors: the crisis and supply chain issues, the war in Ukraine, and
inflation.
It is important to understand that
before the pandemic, the war in Ukraine, and current shocks to the economy and the
supply chain system, when we talk about the food system, especially from a
nutritional perspective, we were not in a very strong position. A UN report released
using pre-pandemic data found that 3 billion people worldwide could not afford
a healthy diet. In addition, we see that more than a third of the world's
population suffers from some form of malnutrition whether they do not get
enough calories to eat or micronutrients that are important for growth and
disease prevention. So, the food systems of the world were not really providing
nutrition even before Covid. It added to it by affecting both the supply chains
that deliver food to people and livelihoods that enable people to access
nutritious food, and protect their food and nutrition. Prices are affecting
many different types of essential foods, such as edible oils in India, which
are the important part of the diet. It really hurts people when they don't
already have much flexibility in their budget. (Nordhagan S.)
Read more: Food Shortage: A serious concern
US new Pivot to Asia, To watch the full video, click: Global Lenses
Impact on people's lives, especially
in the developing world:
This is having a profound effect on
both food security and nutrition. Access to food protection and adequate
nutrition is a prerequisite for a healthy or nutritious diet. The problem with
India is that we lack data on what is happening across the country. Many basic surveys we have conducted as a research institute. The Hunger watch led
by the right to food has shown the food and insecurity situation is very
despicable. We conducted a set of eight questions on the scale of the global
food insecurity experience. More than 80% of our respondents reported
experiencing at least one type of food insecurity. Social security nets can provide food for cereals or pulses that can be easily stored and
transported. But when we eat fruits, vegetables, milk, meat foods, eggs, and
things that are both more expensive and harder to transport and store, we see a
sharp decline. These things come to the surface when we look at a nutritious
diet. Things are getting worse as we see record inflation across the country
and across the board. Food prices are rising not only because of Russia and
Ukraine but also because of rising edible oil prices which constitute a major chunk of
Indian imports. But the survey I'm talking about predates the pandemic. Thus, these are actually the surveys that were conducted during the last two years which
wasn't a period of the Covid-related cases and the Ukraine war indicating that
these crises predated all this. (Raghunathan K.)
Developing nations:
They are already struggling with
the adverse effects of Covid. We now see that 60% of low and middle-income nations are
in debt. They are struggling because they do not have the capacity to borrow
that the richest countries have. Therefore, it is a global crisis that has
provoked a global response from some countries. They are, for example, able to
feed their population to ensure that everyone has enough money in their
pockets, but some countries, especially low- and middle-income countries can’t
afford it. Rich nations need to come up to provide humanitarian aid. (Nordhagan
S.)
Effects of fertilizer: Ukraine war
implication:
Chemical fertilizers require large
amounts of fossil fuels for production. They have become very expensive which
is affecting the number of crops.
This is obviously another factor
that is contributing to the disruption. Chemical fertilizer is another area
where access to raw materials is hampered in the supply chain. For example,
urea is an important element in fertilizers. Most of it originates in Belarus,
which is affected by some post-war trade restrictions, and it permeates
throughout the food system as fertilizers are used in many different places
for different crops. Many countries really rely on global markets for accessing fertilizer. If you look all over Africa, you will see numerous examples of
countries that depend on imports from Europe for more than 50% of their fertilizers. Hence, limited access to fertilizer and the effects of high fertilizer prices can
have adverse consequences. If there is a problem with the input, it means that
there will be a decline in production which will cause problems in retail and
then in food consumption. Therefore, disruption of inputs such as fertilizer
can potentially persist throughout the food value chain and have long-lasting
effects that may take longer to resolve.
Read more: Food insecurity around the world
Gender effects:
In the context of food insecurity
in India, even in South Asia, there is ample incidental evidence that women
often eat the last meal and eat the least. So, if there is a food crisis and a limited supply of nutritious food, it is usually a housewife who
will get the smallest part of it. There is some evidence that when the times
are bad, it is a woman and the weaker segment that are affected the most. More
broadly, women are often the ones most affected by this type of crisis.
Especially, in the context of the Southeast when it comes to food, they often have
minimal leverage over the estate. (Raghunathan
K.)
Was the crisis foreseeable?
This was definitely, to some
extent, expected. This year around the turn we thought prices were going to soar up. We
should have realized that every time we are witnessing a new trend of inflation.
The figures were higher than we expected. We were also seeing that unemployment
has come down to a very low level. As soon as Putin attacked, we could foresee
that prices would go up further. We knew how much wheat was coming from the
area and what effect it would have on oil and gas prices. The question here is
how do we move forward? We have a quarter of a billion people who face extreme
poverty, and about half a billion experience hunger and political turmoil. The
Prime Minister has been overthrown so far in Pakistan and Sri Lanka. It is a
global crisis affecting everyone, but now that we are here, it is our duty to
make sure that people have enough money in their pockets as well as enough food
to eat. (Sandher J.)
India's response to Covid19 pandemic:
Initially, at the beginning of the
crisis, there was huge confusion about how to implement the Covid19 lockdown,
and there is ample evidence, in the short term from the end of March 2020 to
June or July of that year, which shows that the supply chain has been incredibly disturbed. Much of this stems from contradictory or incomplete guidelines for
the transportation of food on state lines and has caused a serious disruption
in supply chains, especially for goods such as fruits and vegetables. One thing to
note here is that the Hunger Watch Survey we conducted found that social
safety nets were indeed very important. In the first year and a half of the
pandemic, the government has greatly invested not only in the public
distribution system, which is already providing large quantities of food to
poor households but also in supplementing it through additional programs. We
found in our research that many poor and vulnerable households depended on the
extra kilograms of rice or pulses they received. (Raghunathan K.)
Climate change and severe weather
events affect crops and the food supply chain:
This is another strain we've seen
over the years. Given what some of the world's best scientists have done, we
know this is a trend that will continue. Climate change will not only increase
the average temperature but also change the average pattern of rainfall which
will have an effect on which crops can grow, where and what will be the yield,
which varieties are suitable, and which type of fertilizer and irrigation and pesticides
are required. Climate change also changes the frequency and intensity of
extreme events. We are going to observe the increase in the frequency of events like
droughts and floods. When that happens, it will be worse than what we've seen
in recent years, and the fundamental changes I've mentioned in terms of
temperature and rainfall levels require farmers to be able to adapt to these
changes. We are already observing some effects of
climate change if we look at what is happening in the Horn of Africa right now.
There has been a major drought that has killed millions of livestock and damaged
crops and it potentially increases food insecurity. Therefore, climate change will
only exacerbate these challenges in the future and give us another challenge
that we need to address in the long-term in addition to the effects of pandemic and war. (Nordhagan S.)
Effects of food insecurity:
There are many effects. One of the
effects we are most concerned about in the food and nutrition class is that pregnant women and young children experience nutritional
security early in life what is called the window of a thousand days. This
is basically the time from conception to the second birthday of the baby and
this is the period that is really important for the development of the baby. During this time, there are plenty of vitamins, minerals, proteins as well as calories that can delay the growth that lasts a lifetime. Thus, consequences like not getting
the same academic results compared to one's peers, and not earning much later in life emerge as effects that last a lifetime.
When one tries to intervene at a
later age, it is difficult to reverse. So, we are especially concerned about
these most vulnerable groups, pregnant women and young children. But the insecurity
of truly sustainable food at any point in life is a major challenge for an
individual, family, community, or society. When school children do not get
enough to eat, they do not pay attention at school. They don't even learn. When
workers do not get enough to eat, they are not productive enough to contribute
so much to society. More importantly, not getting enough to eat and worrying
about where your next meal is coming from lowers the quality of life and
enjoyment of life for everyone affected. As long as it lasts, it translates
into a really big loss in terms of human experience. (Raghunathan K.)
Jeevun Sandher, an Economist and Political Scientist at King's College London
Stella
Nordhagen, Senior Technical Specialist at the Global Alliance for Improved
Nutrition
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