Written by Anna Caprile and Eric Pichon.
|This paper is one of 11 policy responses set out in a new EPRS study which looks first at 15 risks facing the European Union, in the changed context of a world coming out of the coronavirus crisis, but one in which a war has been launched just outside the Union’s borders. The study then looks in greater detail at 11 policy responses the EU could take to address the risks outlined and to strengthen the Union’s resilience to them. It continues a series launched in spring 2020, which sought to identify means to strengthen the European Union’s long-term resilience in the context of recovery from the coronavirus crisis. Read the full study here.|
The issue in short: The challenge and the existing gaps
Over the past eight years, hunger and malnutrition have been rising steadily, reversing several decades of progress. According to the UN Food and Agriculture Organization (FAO), between 720 and 811 million people in the world faced chronic hunger in 2020, the highest level since 2014. Climate change and the Covid-19 pandemic have further exposed the challenges of the global food system to feed an increasing population in a sustainable manner.
Russia’s military aggression against Ukraine has raised a widespread international concern of a global food crisis similar, or worse, to the one the world faced in 2007-2008. Russia and Ukraine are key agricultural players which, combined, export nearly 12 % of the food calories traded globally, and are major providers of basic agro-commodities, including wheat, maize and sunflower oil. Russia is also the world’s largest exporter of fertilisers (see table 1). Several regions are highly dependent on imports from these two countries to ensure their basic food supply: Russia and Ukraine, combined, supply over 50 % of the cereal imports in North Africa and the Middle East, while eastern African countries import 72 % of their cereals from Russia and 18 % form Ukraine.
1. Impact on global food supply: factors and state of play
Global food supply will be negatively affected by three concomitant factors arising from the military aggression, namely:
- A significant reduction (or total halt) of exports and production of essential commodities from the countries at war;
- A global spike in prices of food supplies and inputs needed for agri-food production (fertilisers and energy);
- International responses to the above factors, which can either amplify the effects of the crisis (mainly by uncoordinated protectionist or speculative measures) or mitigate it (applying lessons learnt from the 2007-2008 food crisis).
The level of the war’s impact on global food supply, and the severity of the subsequent food crisis, will largely depend on the duration of the conflict itself and of the evolution of each of the factors mentioned above. Depending on all these variables, and of the measures taken to mitigate the impact of the crisis, different scenarios can be envisaged.
The situation, which is very fluid and evolving rapidly, can be summarised as follows at the moment of writing:
- Disruption of exports and production capabilities in Ukraine and Russia
The UN Food and Agriculture Organization so far expects that between 20 % and 30 % of Ukrainian land usually destined for cereals, maize and sunflower seeds will not produce crops for next year’s harvest. The Ukrainian Prime Minister confirmed that Ukraine’s 2022 grain harvest is expected to be 20 % less than last year. In March, Ukraine banned exports of a number of food products (rye, barley, buckwheat, millet, sugar, salt and meat) until the end of 2022.
In the case of Russia, although no major disruption to crops already in the ground appears imminent, uncertainty exists over the impact on exports. In the short-term, disruption of shipments of 10 % up to 30 % is expected, mainly due to the closure of the Azov Sea to commercial vessels. Black Sea ports are open for the moment, from where most cereals are shipped, although its designation as a ‘high risk’ area for shipping has pushed up insurance premiums in that industry. Russia started curbing exports of cereals as early as December 2021. In mid-March, Russia suspended its exports of wheat, maize and other cereals to Armenia, Kazakhstan and Kyrgyzstan. Although EU sanctions imposed on Russia and Belarus do not target agricultural commodities, they do affect fertiliser trade from Belarus (potash), and could be followed by counter-sanctions from Russia and Belarus, as happened in 2014. Russia has already banned ammonium nitrate exports and has threatened to impose further fertiliser exports bans to ‘non friendly’ countries.
Overall, the European Commission estimates that up to 25 million tonnes of wheat would need to be substituted in order to meet worldwide food needs in the current and next seasons.
- Food commodities and fertiliser inflation levels
The FAO Food Price Index, tracking monthly changes in international commodity prices, indicates an increasingly difficult situation: it averaged 140.7 points in February 2022, its highest point ever, and 3.1 points above the previous peak of February 2011. In the EU, food prices have increased 5.6 % compared to February 2021. Currently, sunflower oil and wheat are being traded at near-record highs. While sunflower-seed oil is highly substitutable with other vegetable oils, wheat is not. Wheat is a staple food for over 35 per-cent of the world’s population, and the lack of substitutability and dietary diversity will likely compound the pressure on wheat prices. Concerning fertiliser, prices were already on the rise before the war, reaching levels unseen since the global financial crisis, mostly due to higher gas prices. The FAO forecasts that the global reference price of fertiliser would undergo an additional 13 per-cent increase in 2022/23, relative to its already elevated baseline level, in response to the more expensive production inputs implied by the higher crude oil price, but also by higher crop prices. This increase would influence production costs for the 2022/23 growing seasons.
- Individual country measures in international markets
A number of countries, other than Russia and Ukraine, have already imposed or have announced their intention to impose some degree of control over the export of essential agricultural commodities. Egypt (the first importer of Ukrainian and Russian wheat), Argentina, Indonesia, Moldova, Serbia and Turkey are imposing export bans on staple crops, and more countries may follow. In the EU, on 4 March, Hungary announced export controls over wheat, rye, barley, oats, maize, soybeans and sunflowers, requiring preliminary registration of intended exports and giving the government a purchase priority for these goods until 15 May 2022. China has imposed export restrictions on phosphate fertiliser until June 2022.
Lessons learnt from the 2007-2008 food crisis indicate that protectionist trade restrictions were a significant driver in the near doubling of wheat prices at the time, since they caused further market distortions and exacerbated the crisis. G7 leaders stated on 24 March 2022 their determination to ‘avoid export bans and other trade-restrictive measures, maintain open and transparent markets, and call on others to do likewise, consistent with World Trade Organization (WTO) rules, including WTO notification requirements’.
2. Expected impact on EU food security
While food availability, at the moment, is not at stake in the EU, food affordability for low-income households might be at risk. Furthermore, EU agricultural production will be impacted by the EU’s strategic dependences on a number of key inputs.
The bloc is largely self-sufficient for key agricultural products, such as wheat and barley (net exporter), and maize and sugar (largely self-sufficient). The EU is also self-sufficient for a number of animal products, both diary and meat products, fruits and vegetables. However, the EU is a considerable net importer of specific products which may be difficult to substitute in the short term, such as sunflower oil and seafood. Moreover, the crisis has exposed the dependency of the EU on a number of key imported inputs: energy, animal feed and feed additives, as well as on agricultural fertilisers.
The EU vulnerability to market distortions in fertiliser trade (both in terms of prices and export restrictions) might be particularly acute, since fertilisers represent 18 % of the input costs for arable crops. For potassic fertilisers, the EU relies on Belarus and Russia for 59 % of its imports, while for nitrogen fertilisers (for which natural gas price is the main determinant), 31 % of EU imports come from Russia.
In terms of food affordability, inflationary tensions will disproportionately affect low-income house-holds, including refugees, putting them at further risk of food insecurity. According to the FAO,[i] a total of 6.9 million people in the EU were exposed to severe food insecurity over the 2016-2018 period, based on the food insecurity experience scale (FIES). The pandemic highlighted the vulnerability of groups of EU citizens, with food banks experiencing a sharp increase in demand. It also revealed the dependence of low-income households on social assistance programmes, such as subsidised school lunches, to cover their nutrition needs. In 2020, 8.6 % of the overall EU population were unable to afford a meal with meat, fish or a vegetarian equivalent every second day.
3. Expected impact on global food security
The current Russian war of aggression on Ukraine risks raising by 7.6 to 13.1 million the number of undernourished people in 2022-2023, the FAO estimates. Jordan, Yemen, Israel and Lebanon are among the most concerned countries, as they rely heavily on basic commodities imports, of which Russia and Ukraine have strong shares. African countries will have difficulties to face market disruptions and the rise in prices. Higher prices and shortages also seriously affect food assistance to fragile countries. In Ukraine itself, the UN World Food Programme (WFP) estimates that ’45 per cent of the population are worried about finding enough to eat’.
Existing policy responses
Food security, defined as the access to sufficient, safe and nutritious food for all, has been one of the core objectives of the EU’s common agricultural policy (CAP) since its entry into force in 1962, as enshrined in the Treaties (Article 39 of the Treaty on the Functioning of the European Union TFEU). The CAP provides income support, market measures and rural development measures to safeguard farmers and increase agricultural productivity, while protecting rural landscapes and the environment. Over 60 years, and over successive CAP reforms, the EU has been developing its capacity to ensure a high degree of food security and self-sufficiency, now scoring as one of the most food-secure regions in the world, and evolving from a net food importer to becoming the world’s first exporter of agri-food products. The latest reform of the CAP, formally adopted on 2 December 2021 after three years of negotiations, will enter into force in January 2023 and will cover CAP interventions until 2027. The reform introduces a new delivery model, moving from compliance towards results and performance, with a new distribution of responsibilities between the EU and the Member States, and with renewed emphasis on environmental performance and sustainability. By January 2022 Member States had to present to the Commission their national strategic plans, i.e. how they intend to use, manage and monitor CAP instruments and tools to achieve the ambitious CAP objectives.
The common fisheries policy (CFP) was launched in 1983, as a structural policy to regulate the market for fisheries products and access to fishing waters, and to modernise EU fishing fleets. It subsequently added the objectives of conservation and management of the fisheries resources in EU waters and in the wider context of international fisheries agreements.
While the CAP and CFP regulate primary production, the first stage in ensuring availability of food supply, other policies and instruments have contributed to enhance other dimensions of the EU food security. The General Food Law Regulation, revamped in 2019, lays down general principles, requirements and procedures related to EU decision-making in food and feed safety, and establishes the European Food Safety Authority (EFSA) as an independent scientific advisory and monitoring body. The Fund for European Aid to the Most Deprived (FEAD) supports EU countries’ actions to provide food and basic material assistance to the most deprived. On 20 May 2020, the Commission unveiled its ‘A farm to fork strategy for a fair, healthy and environmentally friendly food system‘, with the ultimate objective of making the EU food system a global model of sustainability at all stages of the value chain, and setting ambitious sustainability targets to be reached by 2030: reducing the use and risk of pesticides by 50 %, reducing the use of fertilisers by at least 20 %, reducing sales of antimicrobials used for farmed animals and aquaculture by 50 %, and achieving a proportion of 25 % of agricultural land under organic farming.
In 2020, the coronavirus crisis sent shockwaves through food supply chains, affecting the EU too. The EU food system proved resilient, supported by a host of sectoral, national and EU policy measures. However, the disruptions shone a spotlight on some structural weaknesses in the EU’s food supply chain, as well as to affordability of safe and healthy food in the EU itself. Consequently, food security in the EU was put at the top of the agenda, and in November 2021 the Commission presented its communication on ‘a contingency plan for ensuring food supply and food security in times of crisis’, one of the actions envisaged in the ‘farm to fork strategy’ (see box below). Along the same lines, the French Council Presidency (January – June 2022) has highlighted sovereignty and food self-sufficiency as one of the main objectives of its programme in the agricultural sector.
|EU contingency plan for food supply and food security and|
the European Food security Crisis preparedness and Response Mechanism
Key to improving EU preparedness, this contingency plan embraces a collaborative approach between all public and private parties being part of the food supply chain. From the private sector, this includes farmers, fishermen, aquaculture producers, food processors, traders and retailers as well as transport and logistics sectors for instance. EU, national and regional authorities will also be central to this plan.
The plan itself will be rolled out by the European Food Security Crisis preparedness and response Mechanism (EFSCM), a permanent platform coordinated by the Commission, which includes Member States public authorities and relies on a dedicated group of experts (the EFSCM expert group). The EFSCM, which combines Member States’ and some non-EU countries’ representatives and actors from all stages of the food chain, met for the first time on 9 March 2020, and held a subsequent meeting on 23 March 2020. The group will meet periodically, and in the event of a crisis, at very short notice and as frequently as necessary.
It will focus on specific activities and a set of actions to be completed between mid-2022 and 2024:
– mapping of vulnerabilities and critical infrastructure of the food supply chain, including structural issues;
– foresight, risk assessment and monitoring: improve preparedness by making use of available data (including on weather, climate, markets);
– coordination, cooperation and communication: sharing information, best practices, national contingency plans; development of recommendations to address crises; coordination and cooperation with the international community.
The 24 February 2022 invasion of Ukraine by Russia has put, even more so, food security at the top of the EU political agenda. The 10-11 March Versailles declaration agreed by the EU leaders urged the Commission to present options to address the rising food and input prices and enhance global food security in the light of Russia’s war. The Commission swiftly presented a package of measures embedded in the 23 March communication on ‘Safeguarding food security & reinforcing the resilience of food systems’, including short-term and medium-term proposals to enhance food security in the EU and in third countries, including in Ukraine itself. The main actions at EU and Member State level (detailed in the boxes below) can be undertaken using existing instruments, without additional legislative changes. In parallel, the Commission announced the postponement of two highly anticipated Green Deal legislative proposals – on the sustainable use of pesticides and nature restoration targets in the EU – and put forward a package of crisis measures to support the EU fishery and aquaculture sectors in the context of Russia’s invasion of Ukraine.
The package of measures announced by the Commission on 23 March were promptly supported by the European Council at its meeting on 24-25 March 2022, as well as subsequently by the Agriculture and Fisheries Council, and they have been met with broad support from a large number of stakeholders and civil society organisations, with the notable exception of most environmental NGOs. The main subject of discussion is whether pursuing immediate food productivity gains should imply sacrificing the EU’s sustainability ambitions laid down in the Green Deal and Farm to Fork. The position of the Commission is that sustainability and food security are inextricably linked and therefore can, and should, be pursued at the same time.
National level initiatives
In the 2023-2027 CAP, Member States are in the driving seat for the design and implementation of their CAP National Strategic Plans (NSP) agreed upon with the Commission. In its 23 March communication, the Commission already announced a higher degree of flexibility in revising the NSP with a view to adapt them better to arising needs, and encouraged Member States to use it to enhance overall resilience of food systems (see box below).
|Communication on ‘Safeguarding food security & reinforcing the resilience of food systems’|
Main measures – EU level
– a €500 million support package, including mobilisation of CAP reserve funds, for EU farmers most affected by the crisis, which can be topped up to €1.5 billion through Member States’ national envelopes
– market safety net measures to support specific markets (i.e. pigmeat sector) and increased levels of advances of direct payments later this year
– new self-standing Temporary Crisis Framework (TCF) for State aid
– possibility for Member States to derogate from certain greening obligations in 2022 to bring additional agricultural land into production (i.e. use of fallow land under the Ecological Focus Areas (EFAs).
– preservation of the EU single market, avoiding export restrictions and bans
– support through the Fund for European Aid to the Most Deprived (FEAD) for EU countries’ actions to provide food and/or basic material assistance to the most deprived.
– possibility for Member States to apply reduced rates of value added tax and encourage economic operators to contain retail prices
Main measures – Member State level
The Commission encourages Member States to:
1. Use the new CAP strategic plans to prioritise investments that reduce dependency on gas and fuel and inputs such as pesticides and fertilisers, through:
– Investments in sustainable biogas production, reducing dependency on Russian gas.
– Investments in precision farming, reducing dependency on synthetic and mineral fertilisers as well as chemical pesticides.
– Support for carbon farming, reducing greenhouse gas emissions and providing a better income for farmers.
– Support for agro-ecological practices, reducing dependency on chemical inputs and ensuring lasting food security.
2. Ensure the effectiveness and coverage of social protection systems and access to essential services for those in need
EU and Member State actions with external partners and international organisations
At the global level too, the EU is committed to ensuring access to affordable, safe, sufficient and nutritious food for all. This is enshrined in the EU policy framework to help developing countries address food security challenges (2010) and in the new European Consensus on Development (2017). Maternal and child nutrition are at the heart of a 2013 policy framework and of the 2014 EU action plan on nutrition – reducing the number of stunted children under five by 7 million by 2025. Council conclusions of 31 May 2021 reiterated the EU priorities on food security:
- strengthening sustainability and resilience;
- promoting healthy diets through sustainable food systems;
- strengthening food safety and public health;
- contributing to the sustainability and resilience of food systems through trade;
- introducing new finance solutions and business models;
- improving scientific knowledge and ensuring a strong science-policy interface.
For the 2021-2024 period, the EU has pledged over €2.5 billion for international cooperation related to nutrition. This includes providing direct food aid in crisis situations, together with supporting third countries in preventing and managing food crises, linking up humanitarian aid, development cooperation, and conflict management when appropriate. The EU toolbox to harness the fight against malnutrition in third countries includes the provision of nutritious products and treatment, and support to national nutrition programmes. In streamlining humanitarian aid and development programming, the EU ensures the main causes of under- or malnutrition are tackled in the longer term, notably for children and pregnant or lactating women, through better access to water, sanitation and healthcare facilities – a crucial challenge during the coronavirus pandemic. To improve resilience to food crises, the EU focuses on promoting diets adapted to the local circumstances and on supporting smallholder farmers, who run 80 % of the farms and 30-40 % of the land on average in low- and lower-middle-income countries. The EU promotes sustainable agricultural practices to make better profits from work on the land, while safeguarding resources and biodiversity. EU trade policies and negotiated trade agreements must take into account food security objectives, and the EU assesses their impact in this regard.
Development cooperation and humanitarian aid are shared competences between the EU institutions and Member States, which seek coherence between their respective policies in these matters. In the framework of the external investment plan (EIP), the European Fund for Sustainable Development (EFSD, now EFSD+) notably addresses the lack of financing mechanisms for smallholders, the main assets for food security. Joint programming with partner countries also includes food security and nutrition strategies, for example in Senegal, Laos and Nepal. A partnership to boost the African production of plant-based proteins was announced at the February 2022 EU-African Union summit. It will be supported, along with other EU and Member States’ initiatives, by the Global Gateway investment package on sustainable food systems.
EU support to food crisis preparedness and adaptation support includes initiatives such as DeSIRA (Development Smart Innovation through Research in Agriculture) and monitoring tools to identify risk and foster innovation. Research is often done in partnership with international partners, such as organisations and research centres in the Food Security Information Network (FSIN), funded by the EU and the United States Agency for International Development, and the Global Network Against Food Crises (GNFC), launched in 2016 by the EU, the FAO and the World Food Programme (WFP). The EU also supports CGIAR, an international research network in sustainable food systems and the fight against hunger, notably with a €140 million commitment announced on 25 September 2021.
The EU is committed to transforming global food systems and to promoting its Farm to fork strategy. To this aim, the Commission announced its participation in eight global coalitions on food security and nutrition, which gather together a variety of stakeholders.
|The above-mentioned communication on Safeguarding food security and reinforcing the resilience of food systems commits to supporting Ukraine’s short- and medium-term food security strategy. In addition, the Food and Agriculture Resilience Mission (FARM) was launched on 24 March 2022 by the French Presidency of the Council in coordination with G7 countries and the African Union. FARM will aim at monitoring trade on agricultural markets, support Ukraine’s and the most affected countries’ agricultural capacity, and address the impact of expected drops in production levels on the most fragile countries. In an annex to a joint statement by President von der Leyen and President Biden (24 March 2022), the EU and United States made pledges to address food security and nutrition issues. On top of the €2.5 billion pledge for global food security and nutrition, the proposed €330 million EU Emergency Support Programme for Ukraine will aim to secure Ukraine’s access to basic goods and services, and to support its agricultural sector. The Commission, in conjunction with FAO, is supporting Ukraine to develop and implement a short-term and medium-term food security strategy (inputs for farmers, maintenance of transportation and storage facilities).|
Position of the European Parliament
In numerous resolutions, the European Parliament has expressed its concern about tackling food insecurity in third countries, notably in the framework of its cooperation with Africa. This in particular implies supporting the provision of basic services, including food security, with the involvement of local communities.
In its resolution on the farm to fork strategy, Parliament highlighted the need for food systems able to provide enough affordable and safe food for all, and stressed that ‘rapid population growth, climate change, the scarcity of natural resources and changing consumption patterns’ further challenge the achievement of the ‘Zero hunger’ sustainable development goal (SDG 2). In its opinion report for the resolution, Parliament’s Committee on Development (DEVE) called for comprehensive implementation of the farm to fork strategy, taking into account the needs of the most deprived, notably in conflict-affected areas.
On 24 March 2022, the European Parliament adopted a resolution calling for an ‘urgent EU action plan to ensure food security inside and outside the EU in light of the Russian invasion of Ukraine’. A large number of EP proposals to support EU farmers and consumers are reflected in the 23 March communication on safeguarding food security. The EP has called on the Commission to consider additional measures, such as extending the extraordinary rural development Covid-19 measures to address farmers’ liquidity problems, a proposal that has been supported by 12 EU Member States in the Council. The EP emphasises that European strategic autonomy in food, feed and the agricultural sector overall must be reinforced, in line with the Green Deal objectives. It notes, however, that the objectives set out in the Farm to Fork and Biodiversity strategies must be analysed on the basis of a comprehensive impact assessment on EU food security and the situation in neighbouring countries, maintaining as first priority that no food shortages arise. The EP also calls for the setting up of safe food corridors to and from Ukraine to deliver aid and goods, as well as for direct and urgent support to Ukraine with seeds, fuel, fertilisers to maintain its agricultural production.