Skyrocketing global food inflation risks pushing millions into extreme poverty in developing countries, leaving people without food. While developed countries are feeling the effects of the crisis, developing countries are expected to face acute food shortages. In response to the situation, the EU has pledged to implement a number of mechanisms to support the most affected populations in member states and around the world.
Global food crisis threatens economies around the world
Pandemic-related impacts, trade disruptions, and Russia’s war against Ukraine have pushed food prices to an all-time high, triggering food insecurity across many countries. The global food crisis is threatening millions since many already living in poverty are now at risk of falling into extreme poverty and facing hunger and malnutrition. The crisis most particularly affects people living in low- and middle-income countries. The UN World Food Program has warned that around 47 million more people will experience acute food insecurity in 2022, many living in sub-Saharan Africa whereas in 2021, this figure stood at 193 million, 40 million more than in 2020. The global food crisis also threatens to undermine hard-won development achievements.
According to the World Bank, as of June 2022, the Agriculture Price Index exceeded the prices published in January 2021 by 34%. In particular, maize and wheat prices recorded 47% and 42% higher prices compared to January 2021 while the cost of rice was around 8% lower.
Food price inflation threatens the food security of countries in every income group. However, while only 70% of high-income countries have recorded domestic food price inflation, around 94%, 89%, and 83% of low-income, lower-middle-income, and upper-middle-income countries have experienced at least 5% food price inflation. At the same time, many countries have recorded double-digit inflation. The World Bank’s Commodity Markets Outlook, published in April 2022, warns that Russia’s invasion of Ukraine jeopardizes global trade markets, affecting production and consumption patterns so that high levels of commodity prices are expected to persist until the end of 2024.
EU’s response to food insecurity
The EU’s Common Agricultural Policy ensures that member states will not experience food shortages due to the ongoing global food crisis. In relation to some agricultural products, such as skimmed milk powder, the EU’s self-sufficiency exceeds 200% while for other crucial agricultural goods, the EU’s self-sufficiency over a five-year average is more than 100%.
Fig.1. EU self-sufficiency for selected agricultural products (%)
Source: European Council
However, even though member states are not expecting to record food shortages, soaring food prices have already hit markets across the EU, putting vulnerable families at high risk of poverty. To alleviate the effects of the crisis, the European Commission has offered to ensure an open and predictable trade environment for the agricultural sector, put in place an emergency relief program for vulnerable populations, and increase sustainable production capacities. Amongst other strategies, the European Commission has agreed to allocate €500 million to support farmers most impacted by higher input costs and the closure of export markets.
In response to the global food crisis, the EU has also implemented a support mechanism to help developing countries to reorient their supply chains if necessary.
“Global food security is a top priority for the EU, and we will do everything we can to help solve this challenge and to help developing countries,” said the President of the European Council, Charles Michel, at the UN Security Council in June 2022.
The EU is working with the African Union to integrate actions into their joint strategic partnership plan. EU funding streams targeting the most vulnerable include:
- €2.5 billion is dedicated for 2021-24 humanitarian assistance
- The EU emergency support program receives €300 million
- For its Southern neighborhood partners, the EU has committed €225 million from the food and resilience facility.