To-do List (The good news is that there is time to action these items now)
Prevent Famine: Every core element of the food supply chain is affected by the war in Ukraine: Putin has dropped a bomb on the European agricultural sector. Russians have suspended fertilizer exports and Belarus declared a Force Majeure and cannot export their potash. Russia won’t allow it to be exported now either. Nor will the world buy anything from them as long as they are Russia’s lackeys. To remove that much fertilizer from the world economy (Belarus provides 40% of the global supply of potash and Russia supplies 66% of ammonium nitrate), is to set the stage for massively reduced yields and possibly famine. On top of this, we now see the oil price up at $125 and heading a lot higher. This too will remove fertilizer from the reach of the common farmer. In addition, Russia won’t sell their wheat and the world won’t buy it (or anything else due to sanctions). The good news is that alternative suppliers are coming online like, of all places, Michigan and Morroco They need to move much faster though.
The “breadbasket” of the world, Ukraine, may not have wheat due to the war. That’s the 5th and 4th largest suppliers of wheat knocked out of the game. Vladimir Lenin once said that “wheat is the currency of currencies”. It sounds counterintuitive but, we may need to send aid to Australia, Canada and American farmers in order to save the world from the consequences of this war. Get them to plant wheat and prepare to send this and other foodstuffs to those most in need all over the world. This is not about helping farmers make money. It is about having farmers prevent a human catastrophe. Farmers must be heroes now.
Please, before anybody says “a famine is not possible now in 2022”, please consider that everybody said that this kind of war was impossible too. Instead, look at the level of food production and food stocks globally. The World has five weeks’ worth of wheat in storage while the wheat price has risen by 55% since the war began. The FAO says that a number of locations are already at risk of famine – The Horn of Africa, Ethiopia, Nigeria, South Sudan, and Yemen too. Can is happen in Europe? Yes.
Farmers in France are already seeing the price of diesel fuel double. They are at the beginning of the planting season. Some might consider skipping it this year. That’s how famines begin. Don’t let the farmer skip the planting. We need to encourage the farmers of the world to plant double given inflation and war-induced food shortages. There is still time to prevent a catastrophe here.
Farmers and policymakers will have to be creative. Communities worldwide will have to be involved in protecting food from pestilence and vermin in the absence of fertilizer. This will be their war effort. A global learning campaign needs to be launched. Can wheat eaters be taught to eat rice or potatoes or other alternatives at least for one planting season? Can we all think about either not eating as much beef or asking cattle farmers to anticipate the feedstock problem and shift to other sources of food for cattle (grass, corn, whatever) during this time of crisis?
In the past, there were periods when the US matched up food relief with farm income subsidization. In 1973 the US bailed out the Soviet Union when they had a drought by allowing them to buy millions of tons of wheat at subsidized prices. Farmers in the US got paid and Russia got the wheat they needed. Everybody won. Today, we may need to bail out Ukraine and others (maybe even Russia) from a problem we did not create but which the world will suffer from. This could end up being a vote winner for the Democrats and Republicans alike. It would bring rural voters back into mainstream politics. The key point is that the normal process of demand-driven growth was already being undermined by high food prices and inflation. If we do nothing, farmers will stop planting and food inflation will intensify. That will ultimately cause an implosion in world demand and a human catastrophe unless we act now. There is still time.
In the past, there were periods when the US matched up food relief with farm income subsidization. In 1973 the US bailed out the Soviet Union when they had a drought by allowing them to buy millions of tons of wheat at subsidized prices. Farmers in the US got paid and Russia got the wheat they needed. Everybody won. Today, we may need to bail out Ukraine and others (maybe even Russia) from a problem we did not create but which the world will suffer from. This could end up being a vote winner for the Democrats and Republicans alike. It would bring rural voters back into mainstream politics. The key point is that the normal process of demand-driven growth was already being undermined by high food prices and inflation. If we do nothing, food inflation will intensify. That will ultimately cause an implosion in world demand unless we act now.
The good news is that there is still time to prepare for food aid. There is still time to think through the supply chain of food. There is still time to identify and support and invest in the smaller suppliers in odd places that never received capital before because it all went to the bigger players. There is still time for hostilities to cease.
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It is manipulative and misleading to claim that one of the main causes is that "Belarus announced a Force majour " without telling that it was all about western sanctions to Belarus. And they don't have anything to do with invasion of Ukraine as they were declared much earlier. Won't go into discussions towards most important Belarusian industry were the right thing or not, but it has to be clear that Belarusian potash has been withdrawn from global markets due to western sanctions and not to some weather catastrophe or some other unexpected event as usual when Force majour is cited.
Absolutely there is still time……..time to sit down and reach a good faith negotiated settlement between Russia and the West. everyone without a political axe to grind can see there are genuine issues on both sides and the war option is a horrible alternative to accepting some matters that to date have been deemed unacceptable….that can’t be allowed to be a stumbling block. To think political elites will weaponize food and energy for geopolitical advantage is the real crime here.