The world is facing a looming food crisis. The Secretary General of the United Nations, António Guterres, said at the end of June 2022, “There is a real risk that multiple famines will be declared in 2022. And 2023 could be even worse.”

Even before this crisis, around a quarter of a billion people globally were already food insecure.  The 2022-23 global food crisis could impact many more, potentially touching billions of men, women, and children, not just in poorer countries but also in advanced and otherwise wealthy nations around the world. This crisis has been brought about by a combination of man-made activities including war, sanctions, and mismanagement of natural resources and supply chains, as well as by natural catastrophes such as extreme weather and pestilence. It appears the Four Horsemen of the Apocalypse are trotting towards their posts. Global food prices are now at the highest level ever recorded (since at least 1961), not just in nominal but also in real terms (Chart).

Rapidly rising energy prices are a contributing factor. So, too, are output and transportation disruptions owing to war. Russia and Ukraine together supply the world with up to 30% of its wheat. Russia is also the world’s largest supplier of fertilizer. Fertilizer is a by-product of natural gas, a difficult-to-transport product which the US has in abundance but not Europe. Government attempts to restrict fertilizer use in the hopes of a greener, zero carbon future have in recent weeks backfired violently in Sri Lanka (resulting in the overthrow of the government) and peacefully but forcefully in The Netherlands.

While neither Russian wheat nor fertilizer are sanctioned goods, Western imposed restrictions on Russia’s international financial flows means the world is finding it extremely difficult to pay for them. The head of the African Union recently warned that African leaders are “very worried about the collateral impact of the disruptions caused by blocking the SWIFT payment system as a result of sanctions.”

At times like these, the world could use a strategic reserve of grains and other foodstuffs. But the use of strategic reserves has become mismanaged.

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