USAID contributes US$68m to buy Ukraine wheat, helping mitigate food insecurity

USA — The US Agency for International Development (USAID) has announced that it is contributing US$68 million to the United Nations’ World Food Program (WFP) to purchase, ship and store up to 150,000 tonnes of Ukrainian wheat to help address acute global food insecurity.

USAID said this additional 150,000 tonnes of wheat will support ongoing emergency food assistance in countries facing severe food crises. This procurement comes just weeks after the UN announced it helped reach an agreement between Ukraine, Russia and Turkey to resume Ukrainian grain exports through the Black Sea, which had ground to a halt following the Russian invasion of Ukraine on Feb. 24.

The ongoing war between the two leading grain exporters has caused a global spike in food and fuel prices and has contributed to staggering levels of food insecurity in countries facing life-threatening hunger.

“While the resumption of food exports out of Ukraine, after being blocked by Russia for almost six months, is an important first step, these shipments must continue so that the millions of tonnes of grain trapped in the country can reach markets and help feed the most vulnerable,” USAID said.

The ongoing war between the two leading grain exporters, Russia and Ukraine, has caused a global spike in food and fuel prices and has contributed to staggering levels of food insecurity in countries facing life-threatening hunger.

“This freeing of critical food supplies trapped in the Ukrainian ports is crucial, but the sheer scale of the hunger crisis — fueled by wars, the economic devastation of the COVID-19 pandemic, and extreme weather worsened by climate change — is so immense that this single advance will not solve this crisis.” 

It Gets Worse

In a worst-case scenario, management consultancy, McKinsey & Company is predicting a food deficit representing a year’s worth of nutritional intake for up to 250m people – or 3% of the global population. Warning that next year there may be more damage to the global food supply.

Logistical issues have led to a grain export deficit of up to 18m to 22m metric tons out of Ukraine and Russia. At the same time, many farmers in affected regions are unable to do their jobs, from preparing fields to planting seeds and fertilizing crops. This, McKinsey suggested, will ‘likely’ result in even lower volumes next harvest season.

Limited food supply means higher prices for the food that is available. While undoubtedly high global food prices will affect all countries, others, stressed McKinsey, are ‘highly vulnerable’. Bangladesh, Ethiopia, Somalia, and Yemen, for example, fall into this category.

Their situation is almost the exact opposite of the ‘well protected’ nations: they rely on grain imports, have limited stocks, and low purchasing power.

Can anything be done?

In the short-term, three fundamental steps have been pinpointed that McKinsey believes could help reduce risks.

The first is to unblock and de-risk Black Sea logistic routes. Secondly, trade restrictions must be reduced, and buffer stocks released. Further, to rebalance global supply, individual countries must increase the supply of grain traded on the world market. And lastly, financial aid must be provided to aid the most impacted areas and populations.

In the long-term, stakeholders should plan for how to avoid the next crisis. McKinsey argues ‘fundamental’ changes to global behaviour could boost transparency and resilience to the global food system.

Suggested actions include sustainably transforming agriculture to boost yields, especially in importing countries with fast-growing populations; finding ways to reduce global food waste and optimise use of land for food and biomass production; and accelerate the development and adoption of alternative meat and encourage the consumption of the most efficient proteins.

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