France wants Bangladesh in Covax-like global food alliance

A global food alliance, like Covax for vaccines, has been in talks on the global platforms, to build up a food stock from surplus production in major growing countries to ensure food supplies to countries vulnerable to price volatility and fear of future food shortages from a prolonged Russia-Ukraine war.

France President Emmanuel Macron mooted the idea of Food and Agriculture Resilience Mission (FARM) at the G-7 summit on 24 March and the rich nations' club has endorsed the idea, which will now be discussed in larger forums like G20 which includes China and India, two major growers and buyers of food crops.

France wants Bangladesh in the initiative, intended for supplying food to poor nations in Africa, the Middle East and Asia. To this end, French Ambassador in Dhaka Jean-Marin Schuh sent a note verbale to Bangladesh's foreign ministry on 27 March.

"Together with our partners, we could establish a dedicated response mechanism to boost agricultural production and ensure that the most vulnerable countries keep access to supply," the ambassador said in the letter.

Such a mechanism could be sustained by an inclusive governance co-led by beneficiary and donor countries in partnership with all participating multilateral organisations, he added.

The foreign ministry has sent a letter to agriculture, food and commerce ministries, seeking their opinions on Bangladesh's joining the initiative by 10 April.

Under the FARM initiative, food producing countries will produce food more than usual and will supply to countries at risk of worsening food insecurity under a global allocation mechanism similar to Covax, a worldwide initiative aimed at equitable access to Covid-19 vaccine.

The initiative would ensure a significant increase in investments in sustainable food production and resilient agriculture value chains. It would prioritise the enhancement of rural development and agri-food production in Africa by accelerating large-scale programmes, such as the Great Green Wall and the plant protein initiative, according to the letter.

Another component of the plan is to "obtain a multilateral commitment not to impose restrictions on the export of agricultural raw materials", in order to avoid blockages like those that affected vaccine exports during the Covid-19 crisis.

It would involve adapting the existing Farm to Fork strategy, which calls for halving the use of pesticides by 2030 and reducing the use of chemical fertilisers by 20%.

Infograph: TBS

France, which holds the rotating European Union presidency, sees the United Nations' World Food Programme and the Food and Agriculture Organisation (FAO) helping to coordinate the allocation of extra supplies to countries facing urgent needs.

The food security initiative had the backing of the G7 and will now be discussed with G20 nations, including China and India, which have amongst the largest grain stocks in the world.

The subject was discussed with Chinese President Xi Jingping during an EU-China summit on Friday, and will also be discussed at a special meeting of the FAO on 8 April.

For the global food market, there are few worst countries to be in conflict than Russia and Ukraine. Over the past five years, they have together accounted for nearly 30% of the exports of the world's wheat, 17% of corn, 32% of barley, a crucial source of animal feed, and 75% of sunflower seed oil, an important cooking oil in some parts of the world.

Russia has largely been unable to export food because of sanctions that have effectively cut it off financially. Ukraine, meanwhile, has been cut off physically. Russia has blocked the Black Sea for exports, and Ukraine lacks enough rail cars to transport food overland.

For those living on the brink of food insecurity, the latest surge in prices could push many over the edge. 

After remaining mostly flat for five years, hunger rose by about 18% during the pandemic to between 720 million and 811 million people. 

The United Nations said the war's impact on the global food market alone could cause an additional 7.6 million to 13.1 million people to go hungry.

Armenia, Mongolia, Kazakhstan and Eritrea have imported virtually all of their wheat from Russia and Ukraine and must find new sources. But they are competing against much larger buyers, including Turkey, Egypt, Bangladesh and Iran, which have obtained more than 60% of their wheat from the two warring countries.

And all of them will be bidding on an even smaller supply because China, the world's biggest producer and consumer of wheat, is expected to buy much more than usual on world markets this year. 

On 5 March, China revealed that severe flooding last year had delayed the planting of a third of the country's wheat crop, and now the upcoming harvest looks bleak.

Effects from the rising prices of fuel, gas and food products triggered by the Russia-Ukraine war have already begun to be felt in Bangladesh. 

Finance Minister AHM Mustafa Kamal fears that the war will have an impact in the coming days as well.

Bangladesh now looking for alternative sources for food imports

As Bangladesh is facing problems in importing wheat from Russia, the Prime Minister's Office has advised the commerce ministry to import enough wheat and maize from alternative sources to ensure food security in the country.

Speaking on condition of anonymity, a finance ministry official told The Business Standard, "If wheat imports face disruptions, its impact will be on rice. If rice prices rise, it may go beyond the purchasing power of the poor. In this situation, if early floods in the haors cause damage to crops, it will create more food risk for Bangladesh."

Bangladesh suffered a food crisis after early flooding damaged crops in 2017. At that time, even during the Rohingya crisis, Bangladesh's food minister had to visit Myanmar to import rice, he added.

Rising food prices have long been a catalyst for social and political upheavals in poor African and Arab countries, and many subsidise staples like bread in efforts to avoid such problems. 

Tunisia struggled to pay for some food imports before the war and now is trying to prevent an economic collapse. Inflation has already set off protests in Morocco and is helping stir renewed unrest and violent crackdowns in Sudan. 

Countries affected by protracted conflict, including Yemen, Syria, South Sudan and Ethiopia, are already facing severe hunger emergencies that experts fear could quickly worsen.

In Afghanistan, the humanitarian crisis has already been exacerbated by the war in Ukraine, making it more difficult to feed the roughly 23 million Afghans – more than half the population – who do not have enough to eat. 

Sri Lanka, a South Asian country, is facing its worst economic crisis in years. The acute shortage of foreign currency and food and fuel shortage has pushed up the price of basic food items, including rice and milk. The island country is facing a double whammy of increasing prices and high external debt.

A very good initiative 

Dr Zahid Hussain, former lead economist of the World Bank in Dhaka, told TBS that this initiative to look for alternative food sources is a very good initiative, especially for countries like Bangladesh.

Bangladesh was in an extreme food crisis in 2008 owing to cyclone Sidr and two consecutive floods. At that time, it was not possible to import rice as various countries, including India and Thailand, stopped rice exports by imposing a minimum export price in phases.

When food prices were soaring, the government introduced the Dal-Bhat operation to sell essentials to people at a reasonable price, in addition to advising the people of consuming potatoes and reducing pressure on rice, he noted.

"Bangladesh could have overcome the food crisis then had there been such a global initiative," said Zahid Hussain.

Although the food security initiative is good, many powerful countries do not want to accept such an initiative. During wartime, they stock up on surplus food items without exporting those to other countries in need. As a result, the food crisis intensifies in those countries.

The World Trade Organisation has a framework to deal with such a situation, but which is not in effect. In that case, there are doubts about how effective the new initiative will be, he concluded.

Dr Abdur Razzaque, director at Policy Research Institute (PRI), told TBS that the FARM initiative is clearly in response to the Russia-Ukraine conflict that is now threatening global food supply chains causing food security concerns at the global level.

In terms of its intent, the initiative is a timely one and certain elements of French proposals are worth pursuing, he said.

"However, only a few details about the initiative are available at this stage and its implementation could be much more complex than perhaps considered," he noted. 

Under the trade pillar of the proposal, it is not clear which countries hold those strategic stocks that could be used to moderate the price increase, he continued. 

Also, the modalities of stock release remain ambiguous. Whether the stock holding countries use their markets alone to moderate the prices or some of it will be sent to those developing countries that are most affected is not clear, he pointed out.

The initiative calls for a transparency mechanism by ensuring real time availability of data on production, prices and trade restrictions through the Agricultural Market Information System.