DANIEL VAUGHAN: The signs of a systemic global famine have arrived

Long-time readers of this space know that I’ve warned that the world is in a dangerous position of entering a famine. First, skyrocketing prices for goods and equipment have increased pressure on farmers. Second, the war in Ukraine is reducing a much-needed breadbasket for that region which contributed to the outlook for a famine.

As I said at the time, we were already in the planting season, and the time for governments to act was right then. The signs of a global famine are worsening.

Ukraine reports that its farmers have only planted around 20% of the usual amount. “Ukrainian farmers have sown 2.5 million hectares of spring crops so far in 2022, 20% of the expected area, the agriculture ministry said on Thursday, adding that areas of intense conflict could see a drop of 70% of the sowing area.”

To put this in perspective, “Wheat production in 2021 was about 32 million tonnes, with another 50 million tonnes for the other three commodities.” If Ukrainian farmers harvest only a fifth of their usual wheat, that leaves a whole of 25.6 million tonnes of wheat from global markets. The other commodities could see 40 million tons less — and this is presuming they can harvest on time and Russia doesn’t destroy more farmland.

Famine hits Africa and the Middle East.

Famine is already hitting some Middle Eastern and African countries. Lebanon reports it only has enough wheat reserves for a month, and food prices have risen as much as 1000% — that is not a typo.

Elsewhere, “Egypt’s prime minister fixed bread prices, Bangladesh launched a nationwide food subsidy program, and consumers in Indonesia noticed a favorite instant noodle dish went out of stock.” The disastrous US withdrawal from Afghanistan has unleashed famine and other horrors. The shortages force global food programs to answer, decreasing resources for other countries.

In Ethiopia, a prolonged drought has gripped the country. UN healthcare workers describe it as a “Great Depression” with no end. Somalia is in a similar situation, and experts expect most of the Middle East and parts of Africa to face a similar crisis soon.

The UN adds, “The UN World Food Programme (UNWFP) helps Ethiopians by delivering relief, food assistance or food baskets, micro insurance programs and nutritional support programs. However, funding for these programs has decreased because global attention has turned away from Ethiopia recently.”

The most important part of the UN assistance, however, is Ukraine. “[A]bout 70 percent of the wheat the UNWFP had been importing to deliver in its food baskets has been coming from Ukraine and Russia.”

Food costs soar in the US and the world.

And while those countries deal with population-crushing famine, the rest of the world will deal with soaring food costs, even more than what we’re experiencing now.

The US-based World Bank, which provides loans and grants to low and middle-income countries for capital projects, calculates there will be a staggering 37 percent rise in food costs. It said the effect will be ‘magnified for the poor’ who will have to ‘eat less’ and will be left with little money for anything else.

The IMF also worried that beyond famine, “record rises in food costs triggered by Russia’s invasion of Ukraine could push hundreds of millions of people into malnutrition and poverty.” Those who have food will have less nutritious food, leading to poor health.

Fear of famine in food shortages is acute in Ukraine too. There, Ukrainians fear that the Russians will cut off food supplies to create famine conditions to kill the population. They point to historical parallels to the Holodomor famine, when the Soviet Union murdered millions through a manufactured famine.

More to come…

In the United States, food prices are expected to soar even higher. “That’s not exactly surprising considering food inflation saw its largest annual increase in March since 1981—rising at a 8.8% year-over-year—but things may get even worse from here. Bank of America analysts, led by Alexander Lin, said in a note on Thursday that they expect US food inflation to hit 9% by the end of 2022.”

The United States is also experiencing issues with its livestock supply. A disease has ripped through poultry, forcing farmers to kill millions of chickens. Egg prices have skyrocketed as a result, with shortages and rationing for eggs occurring in some regions of the country.

Like the eggs and poultry shortages, some of these things are expected to be short-lived. Other things like grains and similar commodities are expected to continue rising in price.

The time for Congress or the White House to act on these shortages was back in January, February, and March. That was when planting season was being planned. The White House claimed that they knew everything that would happen with the war in Ukraine and that they were never surprised. If that’s true, the world should be more prepared for the inevitable food shortages.

It’s clear the world is not prepared, and everyone is scrambling.

2020 was the year of the pandemic. 2021 was when inflation arrived. 2022 is shaping up to be the year of war and famine.