A shortage of Life’s Essentials: The Human Cost of the Food and Fuel Crises

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A shortage of Life’s Essentials: The Human Cost of the Food and Fuel Crises

Follow the event on Twitter #FoodFuel4All

Even before the war in Ukraine, food and energy prices and global hunger were already on the rise due to the COVID-19 pandemic, climate change impacts, and conflicts. The first half of 2022 has witnessed one of the largest shocks to global food and energy markets that the world has seen in decades. While most countries are impacted by these shocks, poor households face the highest burden. 

This event discussed actions that the international community needs to focus on to address both energy and food shocks. For energy, this includes transitioning to renewable energy. While for food security, there is the need to address the current crisis while at the same time building long-term resilience such as through climate-smart agriculture and innovations in fertilizers. There was an example from Gambia on their investment for an energy roadmap that includes alternative energy sources. Meanwhile, Egypt showcased the country’s efforts to increase agriculture resilience which helped mitigate impacts of the current food crisis.

SPEAKERS

00:00 Welcome! Annual Meetings | Food and Fuel Crises
02:49 Responding to the food and energy crises
23:11 Live Q&A
29:40 The human cost of food and fuel shortages
33:38 Data in focus: Food and fuel prices
34:46 How to transition to clean energy and resilient food systems
59:19 Voices of youth: Ideas for action
01:02:24 Social media conversation and poll
1:04:52 Key takeaways and closure

DATA OF THE DAY

Average price increase of commodities between January to September in 2021 with the same period in 2022:

  • Energy: +76%
  • Food: +21%
  • Fertilizers: +97%

QUOTES OF THE DAY

"We need to provide packages that help alleviate the short-term food security area, but at the same time also work much more on the resilience agenda. How can countries become more resilient toward future crises."

– Axel van Trotsenburg, Managing Director of Operations, World Bank

QUOTES OF THE DAY

"We can fix food price crisis with money, logistics. But due to the fertilizer crisis, we will not produce enough food. That’s unprecedented. We have never seen it before."

– Anne Beathe Tvinnereim, Minister of International Development, Norway

QUOTES OF THE DAY

"Climate and development should not be seen as separate objectives. They need to come hand in hand. And if there’s that realization, we will be able to avail financing for development projects which have climate action at their heart."

– Rania Al-Mashat, Minister of International Cooperation, Egypt

Read the virtual Q&A

Economist, Agriculture and Food Global Practice, World Bank
Senior Energy Economist, World Bank

Anne Elicano-Shields (Moderator):
Hello everyone, and welcome to our World Bank Live event - A shortage of Life’s Essentials: The Human Cost of the Food and Fuel Crises. We'll start the event in a few minutes.

I’m Anne Elicano-Shields with the World Bank, and I will be moderating today’s live chat.

Listed on this page you can see the speakers participating in today’s discussion.

We are joined today by our expert bloggers Ghada Elabed (Senior Agriculture Economist), Hanane Ahmed (Senior Agriculture Economist), Alexandra Horst (Senior Economist), Elcin Akcura (Senior Energy Economist), and Zacharey Carmichael (Economist) to answer your questions.

You can join the conversation on social media using the hashtag #FoodFuel4All.

While we wait for the event to begin, get the latest brief on rising food insecurity and the World Bank responses here: https://www.worldbank.org/....
The page is produced biweekly and provides an ongoing update of food and nutrition security related risks and trends.

zafar Abbas:
COVID  and climate change both are destroying the world economy due to that poverty increasing in poorest countries? what measure should taken by WB to save the economy of poorest countries?

Elcin Akcura / World Bank:
@ zafar Abbas, Yes, the Bank’s latest Poverty and Shared Prosperity Report (https://www.worldbank.org/...) provides the first comprehensive look at the global landscape of poverty in the aftermath of the extraordinary series of shocks to the global economy over the past few years. It estimates that the pandemic pushed about 70 million people into extreme poverty in 2020, the largest one-year increase since global poverty monitoring began in 1990. To combat the crises, the World Bank Group responded with unprecedented urgency, scale, and impact, deploying a record $115 billion in financing in FY22. We have committed consecutive surges of financing for the poorest countries, as well as analytical support, and policy advice, first in response to COVID-19, and now to address the food and energy crisis, the war in Ukraine, and its spillover effects. For details please see: https://www.worldbank.org/...

Nelobia:
For developing economies what are the short term remedies and   and long term strategies which can be adopted to  mitigate the effects of food shortage and fuel crisis

Elcin Akcura / World Bank:
@Nelobia - While uncertainty and volatility in international food and energy markets persist, countries can take active measures to safeguard food and energy security and people’s livelihoods and build longer-term resilience. This is likely to require focusing on several main objectives such as protecting vulnerable communities. While the COVID-19 crisis has already triggered an unprecedented scale-up in social safety nets, these must be targeted to ensure the affordability of essential foods and energy for vulnerable populations, especially female-headed households that are often disproportionally poorer.

Hillary Lugero:
Is food security a continental issue or worldwide problem?

Zacharey Carmichael / World Bank Expert:
@ Hillary Lugero, thanks for your question. Food security is both a country-specific as well as a global issue. For a country, food insecurity can be driven by a number of factors affecting food availability (such as natural disasters like floods and droughts that cause major crop losses, reduced food imports driven by shocks to exporting partners, etc.), access (such as reduced ability to afford food due to high food prices), sustainability (such as disruptions to markets caused by economic crises, social unrest, and conflict), and/or utilization (such as being able to access a balanced and healthy diet). Taking a global perspective, we find that many countries are simultaneously facing worsening and more severe food insecurity. Acute food insecurity – considered to be the most extreme form of food insecurity in which affected populations lose their livelihoods and/or experience elevated rates of malnutrition and mortality – has been rising steadily over the last few years and has been exacerbated by the impacts of the COVID-19 pandemic and the more recent Ukraine crisis. According to the 2022 mid-year update of the Global Report on Food Crises (GRFC), up to 205.1 million people across 45 countries are expected to face acute food insecurity conditions this year. This is nearly double levels observed in 2016 when the GRFC was first published. Reversing these trends has been a key focus for the World Bank and its food and nutrition security partners. For more information about trends in global acute food insecurity, see http://www.fightfoodcrises.net/resources/en/.

Anne Elicano-Shields (Moderator):
We are live today in English with interpretation in Arabic, French, and Spanish.

Remember, send your questions through the live chat on this page. Use the hashtag #FoodFuel4All on social media. Your questions will enter a moderation queue and our live experts will be answering in this chat.

ACA DES:
The global food security issues is one that needs to be tackled across all areas. I believe small holder and subsistence farmers should be supported and put on programmes that seek to enhance their activities. What policies have been put in place for small holder famers and subsistence farmers to improve their activities and also curb the food security challenges of the globe?

Zacharey Carmichael / World Bank Expert:
@ ACA DES, thanks for your question. Supporting smallholder farmers is critical to enhancing food security and building long-term resilience to future crises. While each country differs in its specific policies and approaches for supporting this important demographic, the international community has been a strong champion of smallholders, including as part of the Global Agriculture and Food Security Program (GAFSP). GAFSP was launched by the G20 in the wake of the global response to the 2007-08 food price crisis and works to build resilient and sustainable agriculture and food systems in low-income countries. To date, GAFSP has mobilized over $1.5 billion in grant financing to countries, $476 million to support private sector development, and $47 million to farmers' or producer organizations, reaching more than 16 million people. To help respond to the current global crisis, GAFSP recently launch its 7th Call for Proposals and expects to allocate US$175 million in grant funding by early 2023. For more information, please visit https://www.gafspfund.org/2022-call-proposals-accelerate-food-systems-resilience.

Zacharey Carmichael / World Bank Expert:
@ Hon.Abdirahman, thanks for your question. To help ease the current food crisis, action needs to be taken now to maintain food production by making fertilizers more accessible and affordable. In particular, countries should lift trade restrictions or export bans on fertilizers. The liquidity of fertilizer traders should be bolstered so that they can better manage inventory in the face of rising prices. Additionally, investments in innovation are needed to develop best practices and new technologies that will help increase output per kilogram of fertilizer use and provide alternatives to synthetic fertilizers. There are opportunities to catalyze this innovation. For instance, nitrogen is essential for crop production; however, production and use of synthetic nitrogen has major drawbacks. Synthetic nitrogen is not very efficient, often causing excess application with resulting negative impacts on the environment and human health. Nitrogen loss from fertilizer is responsible for a nearly 20% increase in atmospheric nitrous oxide since the industrial revolution. More nitrogen from human activities, including agriculture, has been released to the environment than carbon dioxide during recent decades. Our partners at the Consortium of International Agricultural Research Centers (CGIAR) carry out research to improve the process and reduce the amount of synthetic fertilizer needed by farmers. That said, upscaling and widespread use of such solutions is dependent on local contexts which affect their adoptability. More recent CGIAR research, enabled due to rapid progress in genomics, eases farmers’ need for complicated management regimes when using nitrogen and greatly reduces the undesirable environmental impacts. CGIAR’s new research portfolio includes working in this area in partnership with other research organizations as it is too costly an endeavor for any single body to tackle individually.

Anne Elicano-Shields (Moderator):
World Bank President David Malpass concludes the first panel.

okello warom:
Despite the current food crisis, what sustainable initiatives can African countries adopt to end hunger and reduce the high food prices that has deprived many families?

Zacharey Carmichael / World Bank Expert:
@ okello warom, thanks for your question. The underlying drivers of the current crisis will require sustained attention and scaled up support over the long-term. Building resilience to prevent future crises requires four key action points. First, incentives need to be aligned so that governments re-examine agricultural trade and market interventions to minimize distortions to incentives. This includes repurposing US$639 billion per year in support to agriculture (see https://www.ifpri.org/...). Second, innovation should be accelerated through greater investments in agricultural research and development. These fields are chronically underinvested despite having one of the highest payoffs to public spending and are crucial to addressing long-term challenges. Disseminating best practice knowledge from the Food and Agriculture Organization (FAO) and CGIAR will help us rise to this challenge. Third, information should be enhanced such as bolstering existing market monitoring efforts. An example is the Agricultural Market Information System (AMIS) which reduces uncertainty and enhances transparency in food markets through monitoring prices and availability of crops, fertilizers, and inputs. To enable coordinated policy responses to food and nutrition insecurity, governments should provide FAO and AMIS with necessary data and resources. The Global Alliance for Food Security (GAFS) is harmonizing existing tracking systems in a dashboard that enables governments and country teams to identify needs and mobilize financing to response to the crisis (see https://www.worldbank.org/...). Related, it is critical to enhance the monitoring of more extreme acute food insecurity conditions, particularly in fragile and conflict-affected situations where data is often limited – work currently being led by our partners at the Global Network Against Food Crises (GNAFC) (see http://www.fightfoodcrises.net/). Fourth, investments, including to the private sector, should be scaled up for food security and food system transformation. Importantly, deficit countries tend to be highly indebted, highlighting the need to combine debt sustainability measures through IMF support with investments to improve food security.

Anne Elicano-Shields (Moderator):
Axel van Trotsenburg, World Bank Managing Director of Operations, talks about the resilience agenda to tackle future crises.

EMAWINDO:
Why is it taking too long to switch on to renewable clean energy while other technologies are advancing quickly, for example communication technology?

Elcin Akcura / World Bank:
@Emawindo - Renewable energy can help countries mitigate climate change, build resilience to volatile prices, and lower energy costs—this is especially critical now as spiking fossil fuel costs are debilitating poor energy importing countries. Electricity generated from renewable energy has been accelerating as costs of these technologies have been declining. For example, the cost of electricity generated by solar mini-grids has gone down from $0.55/kWh in 2018 to $0.38/kWh today. Modern solar mini-grids bring energy to remote populations not connected to the electricity grid, are becoming the least-cost way to bring reliable and clean electricity to remote communities. For more details please see: https://www.esmap.org/...

Jean Naurable CHARLES:
What is the exact link between the food & energy crisis and Ukraine war?

Elcin Akcura / World Bank:
@Jean Naurable Charles - While the food and energy sectors are distinct, they are linked in several ways. Natural gas is used both as a feedstock and energy source in the production of ammonia (a base material for nitrogen fertilizer), accounting for 70-80 percent of ammonia production costs. The rapid increase in gas prices has turned into an increase in fertilizer prices. Hence the food crisis has spread from food importers to producers. In addition, as land and certain food commodities (e.g., corn) are diverted towards energy use, some countries face a difficult choice between securing food or energy supplies. These impacts are compounded by rising prices of petroleum products needed to support harvesting, transporting, and processing of food.

Mercy Chagoma:
With the current economic crisis due to the covid pandemic and the Ukrainian war, is there any special funding that has been allocated or strategies that can be adopted by third world countries to finance fuel and food supplies?

Elcin Akcura / World Bank:
@Mercy Chagoma - The WBG has a wide-ranging portfolio of analytics, advisory services, financing, and risk mitigation instruments that are targeted at tackling the immediate crises, without compromising long-term goals of efficiency, sustainability, and resilience. The WBG has also developed a Roadmap to respond to the impacts of the war in Ukraine (“WBG Response to Global Impacts of the War in Ukraine: A Proposed Roadmap,” April 12, 2022, See https://thedocs.worldbank.org/... ), with a follow-up paper, “Navigating Multiple Crises, Staying the Course on Long-Term Development” published on August 3, 2022 (See https://openknowledge.worldbank.org/...).

Anne Elicano-Shields (Moderator):
Seedy K. M. Keita, Minister of Finance and Economic Affairs, Gambia, is talking about what the government is doing to support the energy sector.

Isabel Inácio Keshavji:
How to get security for clean energy systems in Mozambique? Nb. Except Cahora Bassa.

Elcin Akcura / World Bank:
@Isabel Inacio Keshavji – As highlighted in the Mozambique Systematic Country Diagnostic (https://openknowledge.worldbank.org/) Mozambique has made impressive progress on the energy front in recent years by nearly doubling generation capacity in just 10 years. More progress has to be made in increasing access levels in rural areas, where electrification rates are about 8 percent compared to 72 percent in urban areas. Currently better access to clean renewable energy is hampered by several factors, including lack of a countrywide interconnected transmission system that could transfer the surplus of energy from the south of the country to other areas. Renewable energy policies requiring urgent attention include: financial and regulatory incentives for renewables, improved network connection and pricing, expansion of off-grid renewable energy solutions, strengthening the financial performance of electricity utility (EDM), continued need to leverage regional electricity trade, and expanded legal framework for renewable energy.  For more details, please see https://rise.esmap.org/country/mozambique

Sanjaya:
What can South Asian Countries can do to overcome challenges in this raising crisis?

Elcin Akcura / World Bank:
@Sanjaya - While uncertainty and volatility in international food and energy markets persist, countries can take active measures to safeguard food and energy security and people’s livelihoods and build longer-term resilience. This is likely to require focusing on several main objectives such as maintaining trade flows and diversifying production. By facilitating regional integration and trade in food, agricultural inputs, and electricity, countries can increase efficiency and resilience of supply. Supporting trade finance and agribusiness are important levers for accomplishing this. In the longer term, expanding and diversifying production into markets that have the appropriate comparative advantages can strengthen resilience to disruptions.

Anne Elicano-Shields (Moderator):
Johan Swinnen, Director General, International Food Policy Research Institute (IFPRI) says there should be a focus on financial resources for humanitarian aid, social protection programs, keeping trade open, and market intelligence for food chains.

Cédric:
which solutions africans goverment can take to paticipate of the reduction of those crisis for their population and the world ?

Elcin Akcura / World Bank:
@Cédric With regards to the ongoing energy crisis – countries can address inefficiencies and enhance energy security through diversification and increase in clean electricity generation, tailored to country circumstances. A range of measures can be helpful depending on the specific country context including: accelerate diversification of the energy supply mix and increase clean electricity generation capacity; invest in infrastructure to support the uptake of renewable energy and a resilient grid; promote regional energy trade, markets, and connectivity; increase energy efficiency through reductions in transmission and distribution losses as well as in end-use sectors, especially buildings and industry. For more details on how WBG is supporting countries in this area please see https://www.worldbank.org/...

Kaushalendra Pratap Singh:
What is main cause of fuel crises in the world in now these times.

Elcin Akcura / World Bank:
@Kaushalendra Pratap Singh - Sequential economic shocks triggered by the COVID-19 pandemic and the war in Ukraine have disrupted two of the most important markets in the global economy - energy and food. The pandemic induced a sharp fall in global demand for commodities, especially oil. However, commodity prices rapidly recovered as demand rebounded while supply adjusted sluggishly, due to capacity constraints and supply bottlenecks. The war in Ukraine has added further turbulence and uncertainty, especially in markets where Russia and Ukraine are significant suppliers of agricultural products, fertilizers, and energy.

Anne Elicano-Shields (Moderator):
Today’s event is moderated by Meriem Gray, Communications Lead, Sustainable Development, World Bank.

Papis Diallo:
What is the future of fossil fuels ?

Elcin Akcura / World Bank:
@Papis Diallo – The fall in the global supply of natural gas has increased competition for and prices of natural gas that is available, posing a challenge for developing countries. To mitigate the impacts of shortages and rising energy prices, several countries have substituted gas with heavy fuel oil, while others have brought mothballed coal plants back into service. While the increased focus on energy security may provide the necessary impetus for countries to accelerate the transition to clean energy in the medium term, some of the short-term coping measures carry the risk of increasing energy-related carbon emissions. Globally, the energy sector is responsible for a significant share of greenhouse gas emissions. It is crucial that governments balance urgent short-term needs of food and energy access with longer-term goals such as shifting to renewable sources of energy, achieving net-zero emissions, and building resilience to climate change.

Anne Elicano-Shields (Moderator):
We have a wonderful group of panelists today. Speaking right now is Anne Beathe Tvinnereim, Minister of International Development of Norway.

Lalistu:
what is solution for this food shock for now? and what is long term plan for all of the world?

Anne Elicano-Shields (Moderator):
Mostafa Terrab, Chairman and CEO, OCP Group is sharing his insights on fertilizers and innovations in Africa.

Zacharey Carmichael / World Bank Expert:
@ lmutisi, thanks for your question. To lessen the impacts of the global crisis, we must take urgent action to protect people and help countries. In the short- and medium-terms, this includes avoiding trade restrictions that risk exacerbating food price increases. Export curbs on food can amplify supply problems and higher prices. These measures cause “multiplier” effects as more countries feel compelled to adopt the same policies, resulting in further increases in food prices. World Bank research shows that export restrictions cover one-fifth of world trade and over the past year have added nine percentage points to the price of wheat (see PDF:https://documents1.worldbank.org/...). Social safety nets should also be buttressed, where possible, to provide well-targeted and cost-effective cash transfers to vulnerable households to enhance access to food. Additionally, it is important to facilitate access for farmers and fishers to financing that can be used to purchase inputs such as fuel and fertilizer, helping to protect the output of upcoming seasons. For the longer-term, scaled up investments are needed to transform food systems so that they are more productive, resource-efficient, and resilient. Such investments include reducing food loss and waste and repurposing agriculture policies to encourage private investment and support better climate-focused agricultural technologies.

Elcin Akcura / World Bank:
@dkgame: Core principles for addressing the energy crisis involve addressing inefficiencies and enhancing energy security through diversification and increase in clean electricity generation, tailored to country circumstances. In the European context, such measures are taking the form of enhancements in energy efficiency in public and private sectors, including encouraging green buildings, improving efficiency in hard-to-abate sectors from transport to heavy industries, as well as measures to bring down household electricity demand by setting cooling and heating standards and control strategies. In Africa, where many utilities are suffering from very high losses on the distribution and transmission grids, efficiency measures should first and foremost focus on improving the operational efficiency and financial sustainability of utilities and service providers. Please see http://hdl.handle.net/10986/36178 for more details.

Anne Elicano-Shields (Moderator):
Rania Al-Mashat, Minister of International Cooperation, Arab Republic of Egypt talks about how there's a need to invest on crop resilient production.

Susan Obregon:
What actions is LATAM taking to bounce back from this energy and food shock caused by the pandemic and the war in Ukraine?

Elcin Akcura / World Bank:
@ Susan Obregon – Thank you for your question. After several years of slow growth, the Latin American and the Caribbean economy is facing setbacks because of the COVID-19 pandemic and ongoing crises. The World Bank is working with member countries to accelerate support for the pandemic and other development priorities in the region. Global uncertainty stemming from the war in Ukraine, rising interest rates in developed countries and persistent inflationary pressures is expected to affect the region's economies. While uncertainty and volatility in international food and energy markets persist, countries can take active measures to safeguard food and energy security and people’s livelihoods and build longer-term resilience. This is likely to require focusing on several main objectives including social protection measures. For more information please see https://blogs.worldbank.org/...

Edith Thuo:
How do we change smallholder farming practices when farmers suffer from poor infrastructure that cannot support technology ?

Zacharey Carmichael / World Bank Expert:
@Edith Thuo, thanks for your question. Smallholder farmers are disproportionately vulnerable to shocks. This includes price volatility such as in agricultural inputs like fertilizers as well as longer-term impacts driven by climate change. Agriculture plays a vital role in achieving food security and reducing poverty, especially for those living in rural areas. Smallholder farmers represent an important group of stakeholders who carry intergenerational and localized knowledge – an often untapped resource for enhancing efficient practices and increasing agricultural production in ways that are healthy for people, planet, and economies. Investments should be scaled up to support smallholders, and this has been a critical focus of funds such as the Global Agriculture and Food Security Program (GAFSP). GAFSP was established to invest in sustainable agriculture and food systems to reduce poverty and improve food and nutrition security in low-income countries by raising agricultural productivity, linking smallholder farmers to markets, reducing risks and vulnerabilities, improving non-farm rural livelihoods, and strengthening capacities and institutions. For more information, please visit https://www.gafspfund.org/....

Anne Elicano-Shields (Moderator):
That concludes the discussion. Thank you to all who tuned in! Check back soon for a recording of the event, which will be made available on this page.

Tune in to this podcast on why we’re facing a food crisis: https://www.worldbank.org/...
…and this podcast on the cause and impact of fertilizer volatility on the current food crisis: https://www.worldbank.org/...

Anne Elicano-Shields (Moderator):
Read these excellent blog posts:
1.            How to manage the world’s fertilizers to help ensure the next harvest: https://blogs.worldbank.org/...
2.            How trade restrictions by countries can worsen the food crisis: https://blogs.worldbank.org/...
3.            What countries must do in responding to the food crisis: https://blogs.worldbank.org/...
4.            Renewables are the key to green, secure, affordable energy: https://blogs.worldbank.org/...
5.            Helping utilities boost energy access and the quality of energy services: https://blogs.worldbank.org/...
6.            Amid energy price shocks, five lessons to remember on energy subsidies: https://blogs.worldbank.org/...

Anne Elicano-Shields (Moderator):
Bookmark this joint statement on global food security by the heads of FAO, IMF, WBG, WFP, WTO: https://www.worldbank.org/...

Poll Results

One of the largest shocks to global food and energy markets the world has seen in decades occurred during the first half of 2022. What do you think contributed most in causing these shocks?

Supply chain issues
9% (31 votes)
Geopolitics (War in Ukraine)
20% (70 votes)
Extreme weather events
4% (16 votes)
Exchange rate volatility
2% (8 votes)
All of the above
65% (231 votes)
Total votes: 356

IMF World Bank Group Annual Meetings 2022 Livestreamed events

Join us for a series of live events on today’s pressing development challenges.

Oct. 10: Curtain Raiser
Oct. 11: Civil Society Townhall
Oct. 11: Inclusive Growth
Oct. 11: Food and Energy
Oct. 12: Ukraine Ministerial Roundtable
Oct. 12: Investing in Education
Oct. 13: Press Conference
Oct. 13: People and Planet
Oct. 14: Annual Meetings Plenary
Oct. 15: State of Africa Region
Oct. 15: Human Capital Conclave

Available with interpretation in ArabicFrench and Spanish.