Global Food Insecurity, With Caitlin Welsh

LINDSAY:
Welcome to The President's Inbox, a CFR podcast about the foreign policy challenges facing the United States. I'm Jim Lindsay, director of Studies at the Council on Foreign Relations. This week's topic is global food insecurity. With me to discuss the issue of food insecurity, in light of Russia's decision last month to withdraw from the agreement that allowed Ukraine to export grain via the Black Sea is Caitlin Welsh. Caitlin is the director of the Global Food and Water Security Program at the Center for Strategic and International Studies. Before joining CSIS, she served as a director for Global Economic Engagement on the staff of the National Security Council. Her research examines the impact of Russia's war in Ukraine on global food security, nutrition, food insecurity in the U.S. military, and the coherence of U.S. Global Water Security policy, and U.S. Global Food Security policy. Caitlin, thanks for joining me.

WELSH:
Jim, thanks for having me.

LINDSAY:
Caitlin, concerns about global food insecurity spiked in the wake of Russia's February 2022 invasion of Ukraine. Can you explain the link between the war in Ukraine and concerns about global food insecurity?

WELSH:
Absolutely. Russia's invasion of Ukraine could not have come at a worse time in the context of global food insecurity. What we had seen leading into 2022 was that food insecurity had been rising for at least five years or so globally, but had spiked upon the onset of the COVID pandemic and remained elevated at the beginning of 2022. The framing that UN agencies were doing to describe the causes for rising food insecurity was the three Cs. It was COVID and the supply chain and economic disruptions due to the COVID pandemic. It was climate change due to the impacts of climate change on all aspects of food systems. And also conflict. And in that context, until Russia invaded Ukraine, that referred mainly to regional conflicts. So imagine in Yemen, in the Sahel, in Africa, in other parts of the world where conflict was leading to high rates of food insecurity. When Russia invaded Ukraine, again, food insecurity had been rising. It was elevated because of the COVID pandemic and those other factors. Russia's invasion caused global food prices to spike such that they reached an all time high immediately after Russia's invasion. So in March of 2022, global food prices reached an all time high. They remained elevated throughout 2022, finally started to subside toward the end of the year. But what we see when global food prices rise is there was a lot of attention after Russia's invasion of Ukraine on the commodities that were mostly affected by Russia's invasion, and those are the commodities exported by Russia and Ukraine, mainly wheat, maize, sunflower oil, and fertilizers. But it's important to note that the invasion affected not just the supplies and prices of those commodities, which did spike, but also consumption of other foods, because when the prices of staple foods rise, families have less money to spend on other foods, on other more nutritious foods. So really Russia's invasion as it decreased global supplies of these major commodities, increased prices of these commodities. It also affected consumption of all other types of foods affecting low and middle income countries worst. But really we saw impact in all countries around the world.

LINDSAY:
So it's always important to be clear on terms. When you talk about global food insecurity, what precisely do you mean by it? And is price the best indicator of whether food insecurity is rising or falling?

WELSH:
That's a great and important question about food insecurity, and we can sometimes be imprecise in the terms that we use. There are a number of different measures of food insecurity that are used by the UN, and one of those numbers is called the "prevalence of undernourishment," and it's the number that is essentially used year round to refer to the number of people worldwide who suffer from what we call undernourishment, which is essentially lack of access to adequate calories. It doesn't talk about the nature of those calories, it doesn't talk about the nutritional value of those calories, but is essentially lack of access to sufficient calories. That number is at this point, up to 783 million. That's a general number that's been used to measure food insecurity around the world for decades. Another measure is acute food insecurity, and there can be different degrees of acute food insecurity. That refers to the number of people suffering from the worst types of food insecurity. Imagine those living in humanitarian contexts, situations approaching famine or even in famine conditions. That's a lower number that hovers, but it's roughly around 300 million at this point. A third number that I actually like to call a lot of attention to apart from those two numbers is the number of people around the world who cannot afford the least expensive form of a healthy diet. That's the number of people who can't afford, again, the foods, the proteins, vegetables, grains that they need for the dietary diversity they need for a healthy diet. That is far higher, that's around three billion people around the world. So around 40 percent of the world's population cannot afford the least expensive form of a healthy diet. I think it's very important to note that while the number of people experiencing food insecurity and acute food insecurity can be measured in hundreds of millions, this other number is measured in billions in a significant proportion of the world's population.

LINDSAY:
Okay, so there are a variety of measures we can look at in different ways to look at the problem. I want to go back to the issue of Ukraine. So Ukraine has often been described as the bread basket for Europe or the bread basket for the world. You pointed out that it is a leading exporter of grains like wheat, corn, barley, also major producer of sunflower oil. I would also note that the Russians as well export a fair amount of food products, and there's the related issue of fertilizer, which is important to other agricultural countries to be able to maximize their yield. The immediate concern after the Russian invasion was that food prices would spike because the Ukrainians would not be able to export their crops because they relied on the Black Sea and the Russians were going to prevent that from happening. Of course, we got the Black Grain Sea deal. Maybe you can walk us through that. What did that deal actually stipulate?

WELSH:
Yeah, absolutely. When Russia invaded Ukraine, in addition to the attacks that were quite visible across the news on urban centers and on infrastructure across Ukraine, Russia from the beginning of the war was attacking Ukraine's agriculture sector, all aspects of Ukraine's agriculture sector, from farm equipment to fields to storage infrastructure, warehouses, transportation infrastructure and ports.

LINDSAY:
Obviously, if you attack refineries for example, and disrupt gasoline supplies, that means farmers aren't going to have the fuel they need to run their tractors.

WELSH:
In addition. So I would consider that an indirect attack on its agriculture sector, but very direct attacks. And in fact, I recall reading quotes from some Ukrainian farmers who from my recollection, were puzzled at the fact that their farms are being attacked and thinking we're far away from urban centers. But then realizing that, oh no, this is very intentional on Russia's part. So Russia deliberately attacked all aspects of Ukraine's agriculture sector and also due to the threat of an invasion along the Black Sea and also Ukraine's in position of mines across the Black Sea to prevent an invasion, Ukraine's agricultural exports couldn't get out of the country. At that time, three quarters of Ukraine's agricultural exports were going out of its ports on the Black Sea. So Ukraine's exports effectively ground to a halt. They were able to export some across land routes, but by and large, they ground to a halt. Until July of 2022 when Russia and Ukraine with negotiation assistance from Turkey and the UN arrived at a deal to allow the export of Ukrainian grain and also some of Russia's agricultural products through the Black Sea, it was through three ports on the Black Sea that before the war accounted for half of Ukraine's maritime grain exports. So these three ports were very, very important to Ukraine's maritime exports of grains. And we saw the first ship carrying Ukraine's grain leave its Black Sea ports on August 1 of last year. This initiative, this deal, the grain deal, which is called the Black Sea Grain Initiative, was in operation from August 1 of last year all the way until Russia's exit on July 17.

LINDSAY:
Now, my understanding was as part of the Black Sea Grain Initiative it was agreed that inspections would be conducted by representatives from Russia, Turkey, Ukraine, and the United Nations. Caitlin, what were they inspecting for?

WELSH:
That's right. They were inspecting for weapons to ensure that the ships that were declared to be carrying agricultural cargo were carrying exactly that and not weapons, not munitions. And so there was an inspection facility set up. In fact, there was a very high degree of transparency in operations under this initiative. And in fact, a very excellent website where we could go to year round to see the ships that were being inspected, the ships that had left Ukrainian ports, what they were carrying, how much they were carrying, where they were destined for, and what these ships were called. It was over 1000 ships that left Ukrainian ports carrying agricultural products in this time period. Nearly thirty-three million metric tons of Ukraine's agricultural products, which was important for Ukraine's own economy given the importance of agriculture to its economy, it was also important for global food prices and global food security.

LINDSAY:
So I would imagine the Russians wanted to make sure that ships coming to Ukrainian ports to pick up grain weren't bringing weapons to arm Ukrainian military. Can you tell us the name of that website that tracked the various shipments?

WELSH:
It's a UN website, and it's the Black Sea Grain Initiative Joint Coordination Center.

LINDSAY:
Okay. So the deal is put in place. It lasts for almost a year. Did it work?

WELSH:
That is an important question, a rather loaded question. The way that I'll answer that is by clarifying what its intentions were. Its intentions were to allow the export of Ukraine's agricultural products during wartime. It was not intended to bring Ukraine back to its pre-war levels of agricultural exports. Again, it was only three ports through which Ukraine could export under the initiative. So we can think of it almost as an escape valve or something that essentially reduced pressure on Ukraine's agriculture sector at a time when their grains were building up in country. And it allowed the export of some of Ukraine's products really allowing its agriculture sector to stay afloat. It also was not intended to alleviate food insecurity only for the world's most food insecure populations and countries. And I say that because that was one of Russia's accusations upon leaving the deal was that it wasn't working because Ukraine's grains were not going to the poorest countries around the world.

LINDSAY:
And that was not the purpose of the deal to get it to the Yemens and Sudans of the world.

WELSH:
That's right. Exactly. So number one, that's not true because those grains did go to those places. But number two, it wasn't the intention. The intention was to get Ukraine's grains onto market. And over the course of this almost year, Ukraine's exports, again almost thirty-three million metric tons of wheat, maize, sunflower oil, and other products, made their way to forty-five countries on three continents around the world. So yes, in that sense it was successful.

LINDSAY:
Okay. And certainly looking at prices on global markets, for much of the time the grain deal was in place, global prices fell, which meant that the supply was more abundant than I think people had anticipated when the war began. I'm curious, as you look at it, to what extent is it that the deal itself worked and got Ukrainian grain to market? How much is it that other countries upped their agricultural production? I will note the U.S. Department of Agriculture has indicated that U.S. wheat harvests are going to hit record highs in 2023/2024. How much is it that other countries produce more that sort of brought this down?

WELSH:
Yeah, it's a combination. Global food prices eased. Again, they reached an all-time high in March of 2022, remained elevated, and then started to decline until finally at the end of 2022, they finally reached a level that was lower than the end of 2021. Now, I want to note that those levels in 2021 were still significantly higher than pre-COVID levels. So in the context, in this multi-year context, prices were still very high, but it had subsided since the peak they reached upon Russia's invasion. What we've seen is at this point, not just the fact that Ukraine was able to export a significant amount of its grains onto global markets, but that a number of globally important producing and exporting countries also had good harvests, most notably Russia itself. Russia, with its main export crop being wheat, Russia has been a wheat exporter for most of this century. The world's top wheat exporter starting in 2017 and last year reached a record high of wheat exports. And in fact, this year is expected to surpass that record and export an incredibly significant amount due to good weather that allowed it to produce a significant amount of wheat.

LINDSAY:
Can I try you out in that point, Caitlyn, because I want to make sure I understand the nature of what is happening? As I understand it, the West did not impose sanctions or blockades or embargoes on Russian grain exports. Russians argue, however that many of the other sanctions that have gone, particularly in shipping and insurance, have actually made it difficult for Russians to export their grain. Is that the case?

WELSH:
So it's very important to clarify this, that Western sanctions never targeted and never intend to target in the future, Russia's agricultural exports, neither Russia's grain nor its fertilizer exports. The small exception I'll give to this is that Western sanctions do target Belarus' exports of potash, which is a very important type of fertilizer, and Belarus is a major producer of this type. And those sanctions have actually been in place since before Russia's invasion for a separate reason. But no, Western sanctions do not target Russia's agricultural sector. And as part of negotiations leading up to the announcement of the Black Sea Grain Initiative last year, the Treasury Department clarified for traders that there are no sanctions on Russia's agriculture sector. Do not fear imposition of sanctions. What does happen though is this phenomenon of over compliance where countries or companies may be wary of doing business with Russia because of the existence of broader sanctions. And so we might see a slight impact on trade for that reason. But no, there have not been direct sanctions on Russia's agriculture sector during this war.

LINDSAY:
So let's talk about the Russian decision last month to withdraw from the Black Sea Grain Initiative. Why did the Russians drop out?

WELSH:
There are the reasons that it stated, and then there are reasons that it really did.

LINDSAY:
Tell me both.

WELSH:
Yep. Okay. Russia upon this decision released a two page explanation of its decision declaring things like what I already mentioned, that the initiative didn't work because it wasn't feeding the world's hungriest people, which is in fact not the case. And I'm happy to come back to that point. It complained about the fact that it had not been able to export its fertilizer. One important point there is that the deal agreed to last year did cover Russia's exports of fertilizer. Now, Russia obviously has access to many more seaports apart from those on the Black Sea. So Russia has a lot more maritime export options than Ukraine does. But when it comes to the export of ammonia in particular, there is a pipeline that starts in Russia, traverses Ukraine, and leaves Ukraine around Odessa that Russia has not been able to use since it invaded Ukraine. And in fact, there was an attack on this pipeline on June 5 of this year. And the UN even makes clear that Russia has not been able to export that one type of fertilizer through that one pipeline since Russia invaded. But the fact is that despite the fact that Russia's fertilizer exports did decline in the time since Russia invaded, its export revenues from fertilizer soared due to the higher price of fertilizer since Russia invaded. So Russia was receiving far more revenue from its fertilizer exports and also Russia's own fertilizer producers are saying that in the later part of this year, its export levels will be reaching pre-war levels simply because of market adjustments. So when it comes to that, again, Russia's complaining, and I think it's very, very important to note if Russia has any complaints, anything that Russia pretends to be suffering is due to a crisis entirely of its own making. And there is something that I read from a Ukrainian diplomat that says that the fact that Russia pretends to be suffering more than Ukraine in this war is disgusting. So we have to recognize that if we compare the extent of damage to Russia's agriculture sector versus Ukraine's agriculture sector in this war, there really is no comparison to be made because far more detriments, far more destruction to Ukraine's agriculture sector. Anyway, all this to say, Russia pretends to be doing this for certain reasons, but the real reasons are ones that we know very well. Number one, because Russia is very aware of the importance of Ukraine's agriculture sector to its overall economy. Its agriculture sector contributes to 40 percent of Ukraine's export revenue. 20 percent of its GDP employs 17 percent of Ukraine's labor force. Russia knows that by attacking Ukraine's agriculture sector, it's attacking a major source of Ukraine's income at a time of war.

LINDSAY:
So it's about crippling Ukraine.

WELSH:
Absolutely. And as we're seeing through Russia's exiting of the Black Sea Grain Initiative and its subsequent attacks on Ukraine's agricultural infrastructure, which I can also talk about, that Ukraine's agriculture sector is becoming a more important theater in Russia's war in Ukraine. Other reasons that Russia is doing this, Russia recognizes that it could reap benefits due to - should global food prices increase, then this would be good for Russia. Russia had a record level of wheat production this year, record level of exports it's predicted to have as well. Russia would only benefit from higher grain prices right now. We also know that Russia has always conceived of its food exports as a source of soft power. And in fact, over a year ago, not long after Russia invaded Ukraine, Russia said on social media that food is its silent weapon. So albeit ironically saying that publicly that it was a silent weapon, but knowing it's a main source of soft power for Russia, the magnitude of its food exports. And finally, Russia is very aware that to the extent that Ukraine is not able to access its Black Sea ports and Ukraine has to push its exports through its European neighbors, this sows discontent among European neighbors, among these countries that are otherwise very supportive of Ukraine at this time. And the reason that these countries don't like shipping Ukraine's grains overland is because when you have a glut of Ukraine's grains that are not normally in these countries, in Poland, Slovakia, Bulgaria, and Hungary, you have a glut of grain there, domestic prices fall and farmers in these countries receive less money for the grains they produce. So their farmers rightly protest.

LINDSAY:
Well, let's talk about that, Caitlin, because that is a significant irritation or division within the West. And again, as you point out, it's coming from five EU countries, in particular five countries that for the most part have been very staunch in their support of Ukraine, led most notably by Poland. They have actually restricted the ability of Ukraine to diversify its exports by going essentially over land or down the Danube, and they've done so actually in contravention of EU regulations, this has been a sort of continuing issue going on, and it has been driven by domestic politics as you point out. I believe that the Polish government is worried about losing the support of farmers. Democracies have to deal with democratic politics. How you see that playing out? Are we going to find a resolution that allows somehow the Ukrainians to export perhaps by not having the grains hit the markets in places like Hungary, Poland, Romania, Bulgaria, Slovakia, or is this something where there is no potential for negotiated solution that both serves Ukrainian interests and protects the domestic political interests of those five central European countries?

WELSH:
Yeah. Yeah. So right now what's happening is that these countries are allowing the transit of grain overland, but not allowing the sale of grains in country. That's the deal that was agreed with the EU. That's in place through September 15. So we'll see what happens when that deal expires. Even if grains are not for sale in these countries, the fact that grains are being transited on transportation infrastructure there means that there's greater competition for transportation among all products that would normally be transited. And so-

LINDSAY:
Prices go up.

WELSH:
Prices go up, so it's not good for any producers or sellers. So we see exploration of other routes. I just saw in the news recently that Ukraine was speaking with Croatia about the possibility of exporting through some of Croatia's ports. So yes, there's discussion of other options. When Russia exited the deal, Secretary of State Antony Blinken, talked about this exploration of alternatives overland. But the fact of the matter is that since last year, Ukraine was exporting half of its grains out of its Black Sea ports, and so you really can't make up that volume easily through overland options.

LINDSAY:
So last month, Vladimir Putin met with African leaders in St. Petersburg for a two day summit, and he made a big show of offering Burkina Faso, Zimbabwe, Mali, Somalia, and the Central African Republic, something on the order of twenty-five to fifty thousand tons of free grain to each country in the next three to four months. Now, to put that in perspective, Russia exported something on the order of sixty million tons of grain last year, of which forty-eight million was wheat. Do we have a sense that this gambit by Putin of positioning himself, as you noted, as standing up for the poorest of the poor countries, is working? And I should note not all the poorest of the poor countries are getting in on this deal that Putin offered up. Most notably, Chad and Sudan weren't offered the same deal.

WELSH:
Yeah, I guess I'll take a step back and say that in return to my point about Russia knowing that its food exports are a major source of soft power, Russia knew that to the extent that Ukraine's exports would be decreasing due to the direct effects of Russia's attacks on Ukraine's agriculture sector, that Russia could be a source of replacement of those grains because countries that were importing from Ukraine were doing so because of proximity to the Black Sea, shipping times are shorter, shipping routes are shorter, shipping costs are lower, so that Russia would be an obvious alternative. So it's likely that a lot of these countries that we're talking about in Africa, North Africa, Middle East, parts of Asia that had been importing from Ukraine were likely making up some of their shortfalls in Ukraine's exports with Russia's product. Russia would see that as a benefit. Russia's offer to African countries was a bald-faced acknowledgement of its manipulation of other countries through its agricultural exports. I don't sense that Russia was able to really shore up a huge amount of support from such countries because at the same time, we were also seeing opposition, public opposition from some countries and public pressure for Russia to rejoin the Black Sea Grain Initiative. Kenya called Russia's exit from the deal a slap in the face, Egypt called for Russia to rejoin. China has talked about the importance of this initiative starting up again. The Vatican, of course not a low or middle income country, but even the Vatican has made statements. And also, given the fact that such a low number of heads of state and government participated in this summit compared to the last time it was held in 2019-

LINDSAY:
Fewer than half as many African leaders showed up in St. Petersburg this year as they did four years ago.

WELSH:
Exactly. Russia's very, very clearly trying to manipulate countries through its agricultural exports. I don't see countries lining up behind Russia to the extent that Russia probably wants.

LINDSAY:
So what then, Caitlin, is the Western response to all of this? And I ask against the backdrop of the fact that when Vladimir Putin withdrew Russia from the Black Sea Grain Initiative he said that Russia would consider any ship attempting to run the Russian blockade of Ukrainian ports as committing an act of war. That contains with it the potential of a conflict broadening well beyond Ukraine. So how should the West, how should the United States respond?

WELSH:
Yeah. So the West immediately called for Russia to rejoin the Black Sea Grain Initiative. The UN called for Russia to rejoin again, the Vatican did. A lot of others did call for Russia to do this. What we hear from a lot of Western political leaders here in the U.S. and otherwise is this accusation that Russia is holding the world's hungry hostage in order to - in the context of its war in Ukraine. And it's on the one hand important to note that there are global repercussions of Russia's decisions. Again, as we saw last year, immediately after Russia invaded, global food prices reached an all time high with effects for food insecure people all over the world. This time, however, the effects on global food prices were not as stark for a number of reasons. And so I don't think that that's the key message. I don't think that's the key headline, that it's going to be the world's food insecure and malnourished people who are going to suffer the most. To me, the most important headline is that Ukraine's agriculture sector has become a major, if not the major theater in Russia's war in Ukraine at this point. We've been tracking Russia's attacks across all aspects of Ukraine's agriculture sector since its invasion, and yet we have not seen Ukraine's agriculture sector become the major target that it is until this month. So it's not just about how the West is responding to Russia's decision, but it's also important to look at China knowing that China was a destination for not only about a quarter of all of agricultural products that were exported from Ukraine under the Black Sea Grain Initiative, but it's important to look at the nature of those products and that most of the imports that China was getting from Ukraine were maize. That's important for China because maize is a major source of feedstock for animals that feed China.

LINDSAY:
Maize is corn?

WELSH:
Yeah, exactly. Corn, yep. Since last year, China has imported about a quarter of its corn imports from Ukraine. Now, this crop is very important because whereas Ukraine is a major producer and exporter of maize or corn, Russia is not. So Russia cannot make up for the shortfall in exports of maize the way that it could potentially for wheat. So this is what I think is prompting China to make statements publicly at the UN and some of China's state owned media. Also, China has reported to have had official meetings with representatives of Ukraine's agriculture sector following Russia's decision. So this is also an important data point in the context of things that could prompt Russia to reevaluate its decision, is the importance of Ukraine to China's agriculture sector, which is very important at this point.

LINDSAY:
And should I assume that the Chinese prefer to not have to turn to the United States for shipments of corn?

WELSH:
I mean, China is the number one export destination for U.S. agricultural products. China has a lot of sources of agricultural imports, but China needs such a high volume of maize to feed the animals that feed its population that you really can't replace Ukraine when it comes to the volume and the proximity where shipping time is relatively shorter and costs are relatively lower. It gets animal feed from other countries in other parts of the year. But really it's the best option and one that China, I think, is quite frustrated to have to rethink due to Russia's decision.

LINDSAY:
On that note, I'll close up The President's Inbox for this week. My guest has been Caitlin Welsh, the Director of the Global Food and Water Security Program at the Center for Strategic and International Studies. Caitlin, thank you for joining me.

WELSH:
Thank you, Jim.

LINDSAY:
Please subscribe to The President's Inbox on Apple Podcasts, Google Podcasts, Spotify, or wherever you listen in. Leave us a review. We love the feedback. The publications mentioned in this episode and a transcript of our conversation are available on the podcast page for The President's Inbox on cfr.org. As always, opinions expressed on The President's Inbox are solely those of the hosts or our guests, not of CFR, which takes no institutional positions on matters of policy.

Today's episode was produced by Ester Fang, with Director of Podcasting Gabrielle Sierra. Special thanks go out to Michelle Kurilla for her research assistance. This is Jim Lindsay. Thanks for listening.