DR. CARY FOWLER: Thank you so much for coming today. Thank you for your interest in this topic. It’s certainly one of the most important in the world at the moment.
I thought I would just begin with speaking with you for a few minutes about how we see the current global food crisis, what the causes are behind it, and a little bit some of the complexity behind that because I think it’s tempting to seek easy, quick, cheap solutions to complex problems, and sometimes that doesn’t work. So, we want to be mindful of the real causes behind the food crisis.
Obviously, last year was an unusual year in this space. We typically talk about the current food crisis being caused by COVID, by conflict, and climate change. Now, I want to say a little bit about each one of those but there are other issues involved as well.
So, obviously COVID disrupted supply chains, both in terms of agricultural inputs and in terms of trade around the world. Climate change is an issue that is with us, the climate has changed. It’s not just changing it has changed.
January was the 527th consecutive month, in which the global average temperature exceeded the 20th century average for that month. So, 527 consecutive months of what you could call above average temperatures. This is having a rather pronounced effect on food production, particularly in some parts of the world.
We know that Africa, Sub-Saharan Africa, for example, is going to be more severely affected by climate change than many other regions. Obviously, Sub Saharan Africa area of the world is struggling with food security issues. One of the reasons that we are quite focused in the U.S. government on Africa, is that by the end of the century, Africa will be the most populated [continent] on Earth. So, we’re going to see 2 billion people added there.
When we come to conflict, we see that about 60% of the people who are food insecure in the world are living in countries with active conflict. So, you have to think of conflict as being both cause and effect. It’s causing a great deal of food insecurity in the world.
There are 10 million people – and we’ll get to this in a moment – but 10 million people in Ukraine that have been displaced by Russia’s war there. But, you also see this in the Horn of Africa and other regions around the world where conflict is causing food insecurity and migration.
On-the-other-hand, it goes both ways. So, conflict causes food insecurity. But food insecurity also causes conflict, and there are a number of academic studies that will show a very positive correlation between climate, conflict, and food insecurity.
So, years that are abnormally hot, generally produce lower harvest and lower harvest produce higher food prices and higher food prices produce instability and such. So, all of these things fit together.
You might think of these three issues, climate, conflict, and COVID as being the central drivers behind the current food crisis that we’re in. However, quite uniquely, we see some other major causes. We have historically low stockpiles of grain. And this is causing more price volatility and higher prices in the marketplace.
We’ve seen countries impose export bans on their food. This is causing also more volatility in global food markets and scarcity in some markets. We’ve seen a number of trade restrictions.
We’ve had problems with fertilizer supplies as well. And the market for fertilizer is an interesting market. It’s basically three different markets for the three different major kinds of fertilizer. One is nitrogen fertilizer, which is highly energy dependent. So, one of the things that’s been affected we’ve seen very, very high prices for nitrogen fertilizers – very much related to the high prices of natural gas.
And of course, the energy markets were set into turmoil by, again by, Russia’s invasion of Ukraine. So, that has caused high prices of fertilizer and in some places led to decreased consumption, use of those fertilizers, which of course has an effect on food production.
But with the other fertilizers, particularly with potash, which is another major fertilizer, we were simply at that point in the natural price cycle of that fertilizer where the price happened to be high. Sometimes, the economist will say that high prices are the cure for high prices. In other words, when they’re high prices of something like potash, people withdraw from the marketplace a little bit and that gets the supply and demand situation back into sync.
But for the last year or so, we’ve had very high prices of potash. Potash is, to say one thing because it’s an interesting fact about potash, you don’t often directly see the impact of potash on food production. But potash is a mineral fertilizer that’s very important for the plant in terms of giving it the strength to deal with environmental stresses with drought and heat, and things like that.
So, if you haven’t applied potash and you have bad weather, you may be in trouble as a farmer. If you haven’t applied potash and you have good weather, you may not notice it for that year.
Another issue obviously has been water. The majority of aquifers in the world, underground water supplies, are being depleted. We’re not replenishing the water in those aquifers as much as we were drawing out, and of course, that’s not sustainable.
So, we’ve had that issue, and then of course, I mentioned energy. Energy of course has an impact not just on price of fertilizer, but on the price of transportation for food items. It’s the fuel you put in tractors. So, it affects the price of food all up and down the line.
And what this means is when you add all of this up, and you have COVID, conflict, and climate change, and low stockpiles, and trade bans, and fertilizer problems, and water problems, and high energy prices, essentially almost everything that could go wrong was going wrong.
It was what we might call a perfect storm in the food security area. And this, I just invite you to think about for a moment, because if you want to address the food security issue, and you want to try to promote food security, what do you do?
Well, in a sense really addressing the food insecurity problem requires you to address all of the issues that I’ve just named. And that of course, to some extent is impossible, because some are weather related.
But if you really want food security, you have all these elements that are pulling against you at the moment and they all require some type of intervention. Another couple of points I’ll make real quickly.
About two thirds of the countries in the world, 131 of 196 countries, are net food importers. That’s interesting. What it says to me is that there is a high degree of interdependence on food. We don’t just live in a Japanese market for food or a U.S. market for food, or a Kenyan market for food.
But there’s a great deal of interdependence, so what happens in one place has an effect in other places, and that became really clear with the Russian invasion of Ukraine. Many people, perhaps even in this part of the world, might not have been able to put their finger on Ukraine, on a map, until about February 24 of last year when the Russian invasion took place.
And what most people didn’t realize at that time was that Ukraine was a top five food exporter of wheat, barley, maize, corn, and sunflower oil. Sunflower oil is, you may or may not use sunflower oil in your cooking, but it’s part of the general group of vegetable oils that are really important in international commerce, and also very important in food processing not to mention cooking at home.
So from one day to the next, it was very difficult to get the grain out of Ukraine and onto the world markets. And given its location in the world, if you take a look at it on the map, you can take a pretty good guess as to where that grain was going. It was going to countries around the Black Sea, was going to Egypt, it was coming down into Africa. I’m not saying all of it was going to developing countries, but a substantial portion of it was.
And of course, taking that off of the market had the effect of pushing up food prices all around the world.
It’s important to realize that at a time when the global stockpiles of grain were already low, by historical standards, that taking Ukraine grain off of the market was what tipped us over the edge last year in terms of food prices. And obviously that I can say more about the situation there.
But that was a tragedy not just for human beings in Ukraine, but of course people around the world. And you can go to the website of the World Food Program, and see their estimates, and how many millions of people that particular action pushed into extreme poverty, and how we have a growing number of food insecure people in the world.
According to the World Food Program, we’ve got about 828 million food insecure people in the world today. I don’t usually talk a lot about that number because I don’t think it’s possible for any of us as human beings to really grasp the human dimension of 828 million food insecure people.
If you have children, if you have one or two children, just imagine them being part of the 828 million people – it’s hard. It’s very hard to understand that in today’s world.
I guess I’ll say one more thing. That’s to give a little bit more historical perspective. I mentioned that January was the 527th consecutive months and above average temperature that goes back to the mid-1980s.
In the mid-1980s, something quite profound happened with agriculture. Up until that point, in other words, for roughly 12,000 years since the beginning of agriculture, the primary way that people produced more food to feed a growing population was basically to clear more land to cut down the trees and expand the amount of cultivated land. That was pretty simple.
In the mid-1980s, the largest increment of added food production in the world, all of a sudden didn’t come from cutting down trees and expanding farmland. It came from intensifying production on the existing land. And that has put in human beings around the world in a rather different situation.
And I would argue that makes us even more interdependent in terms of the trade relations we have, in terms of ensuring fertilizer supplies, adequate water, and all of these kinds of things that have been problematic recently.
So that’s a bit of an analysis of where we are. I guess the only other thing I would say is that to start off the discussion is that one thing that we learned last year. I think we learned it was with this very dramatic increase in the number of food insecure people around the world.
We saw a great deal of pressure on the budgets of humanitarian aid organizations. We had organizations like the World Food Program, I think the United States accounts for about 40% of their budget, we’re certainly the largest contributor to the World Food Program. But in the kind of food crisis that we found ourselves in last year, and are in this year, we have a rising number of people who are food insecure, but at the same time, rising food costs.
So, it costs more and more money to feed the same number of people. Which obviously is a problem when the number of hungry people are increasing and increasing. It’s very clear to me, if you look at the historic budget of the World Food Program just a few years ago, I think it was, you’ll have to check this out yourself on the internet. You can get the exact figures, but it was somewhere around $5 billion a year, four or five years ago. I think last year it was over $10 billion.
And the projection of what they need for the coming year is $20 billion. Obviously this is going in the wrong direction. And I think, it’s clear to me, that food aid is not the same thing as food security. So long term, what we really need to be thinking about and trying to work towards is food security with increased level of production, more self-reliance in that respect, and making that transition from food aid to food security being more real. That’s what the U.S. government is committed to.
While we’re the largest contributor of humanitarian relief, I think we’re also the largest contributor to long term development projects to try to increase food production, particularly in developing countries, these days particularly in Africa. So, I’ve spoken too long already. But I’m happy to take some comments or questions, and I hope I can answer them if I can’t I’m going to be honest with you and tell you I don’t know.
MAINICHI SHIMBUN: Please tell us the purpose of your visit to Japan. With Japan hosting the G7 Summit, what types of actions can be taken by the G7 leaders?
DR. FOWLER: Thank you. You almost answered your question. I’m here because of the G7 meetings and as you said, Japan chairs the G7 this year. Yesterday, we had a working group meeting on food security to prepare for the G7 Summit, and today we had a working group meeting on fertilizers and soil health, also to prepare for the G7 Summit.
I don’t want to say anything too specifically about what we discussed because I think it’s proper that when the time comes, that the Japanese government, as the Chair, do that talking. But, I think we are very much of a like-mind on a number of key issues.
I’ll be also having some bilateral meetings here with the Government of Japan, where we hope to talk about a number of quite specific issues, where we’re both concerned about and ready to work on, questions around data and information sharing.
We realized that in a number of different areas not just in trade, even in areas, such as soil health and fertility and fertilizer, that we could, we would be better served by having much better information based on which to make informed decisions. So, we’re certainly working on that together.
We have an interest in keeping trade markets open and without bans that distort the market and give us so much price volatility, such as we experienced last year. They’re just a number of areas in which we do see eye-to-eye.
I think we’ll think about the time that the Summit comes we’ll have a fairly, clear message to give to the world. I’ll just mention and you might want to go back and check the details of this.
At the UN General Assembly last year, we did sponsor some talks with the United States on food security and came out with a draft with what we called a Roadmap for Global Food Security that more than 100 countries signed on to including Japan, including all of the G7. So, we’re still very much interested in pursuing the seven lines of activities that were outlined there.
NIKKEI SHIMBUN: The international agreement on the export of Ukrainian grain via the Black Sea will expire in the coming days. If an extension of the agreement is not reached, how do you see it impacting the global food market?
DR. FOWLER: Well, the current agreement expires four days from now on the 18th. And we understand that Russia has proposed a 60-day extension rather than the 120 days that we had in the past. Obviously, this is an agreement that the United Nations is involved in brokering, so the United States is not a direct party to that agreement.
Having said that this is a very important agreement. We need to extend it and it needs to be extended for a reasonable amount of time to give the world insurance that Ukrainian grain will be on the market and can be available, and also to guard against future price increases.
It’s important to realize that that the Ukrainian agricultural system was geared around oriented towards export through the Black Sea through the ports. So, when Russia invaded Ukraine first or believe maybe the second day of that war, there was actually a ship in the harbor in Odessa, that was there to be loaded with grain that was bombed by a missile, I believe on the second day. So obviously the impact was immediate.
Ukraine did not have the capacity to export its grain over land. It was all geared towards coming to the port cities in the Black Sea. But what’s happened in the past year has been, I think quite, quite heroic almost.
With Ukrainians, with Europe, with the United States, working to try to facilitate the exports of grain through over land routes that was rather complicated. I’ll give you one example, and that is that the rail gauges for railroads are different between Ukraine and some of its neighboring countries. So, you couldn’t simply put grain on the railroad from the Ukraine and ship it out of the country. It was very complicated.
We also saw that Russia began to target the grain storage units in Ukraine. It bombed and
burned and mined agricultural fields in Ukraine. Obviously, many farmers were forced to leave their farms. They became not just fighting for food security but fighting for democracy and the existence of their country.
And the eastern parts of Ukraine, which are heavily grain producing became battlefields. So, even if the Black Sea agreement is extended, Ukrainian grain food production is going to be down rather dramatically, having said that, we still need that grain out and we need the Black Sea agreement to be renewed.
It’s very tempting to say that Russia has to be aware of the impact that that Grain agreement has on Ukraine as a country and Ukrainian economy and on Ukrainian farmers. And it’s not a positive impact, obviously.
A great deal of income of the country depends on grain exports and obviously if you are, preventing farmers or discouraging farmers from growing crops, then you know, you’ll see the farmers plant less. And with Russia, bombing infrastructure now, it’s making the situation in Ukraine in the agricultural sector more and more and more difficult.
This is, as a number of people have said, this is not just a war on Ukraine, but it’s a war on food security globally. And that seems to be what’s happening. So, we’re very concerned about that agreement. But we’re primarily concerned about it for the sake of developing countries and the impact that it will have on those.
ASAHI SHIMBUN: Regarding the sanctions on Russia, many global south countries are remaining neutral do the rising cost of foods. On the other hand, the WTO has identified 52 measures restricting food exports, noting that nearly half of these are G20 countries. What initiatives do you think the U.S. could take to ensure food security?
DR. FOWLER: Well, I’ll just give you a short answer to that I’m afraid. We’ve been very active from the beginning in discouraging trade restrictions on food. We know that a number of countries put export bans on both food and fertilizer. Very often these we can see pretty, clearly that these export bans are politically inspired for domestic political audience.
But I think it’s also worth noting that they rarely had the intended effect politically or economically. Very often it’s the case that a country will impose an export ban essentially saying to its consumers, that it wants to keep that food internally in the country to maintain a stable price.
But we have a global market and most food items now, and food items find their way out of countries, and export bans are very often not effective in the long run. But they do cause short-term problems and a lot of instability in markets. So, we’ve been pretty active from the very beginning last year, but most of it behind the scenes I must say, in private bilateral discussions that we’ve had with countries to discourage those kinds of activities.
KYODO NEWS: As you are aware, the level of self-sufficiency in Japan is very low, and with a shrinking economy, what areas of cooperation is there for the U.S. and Japan in terms of food security?
DR. FOWLER: Sure. Well, as I mentioned in these discussions, again, I don’t want to go into too much detail. But in these discussions yesterday, and today, I find that we’re very much aligned with Japan on global political and economic issues. Japan has a lot of capacity in a number of areas. Certainly, that includes technical areas, where we’re both countries that are very much concerned about the problems of climate change and how countries are going to adapt to climate change.
We’re quite concerned and have discussed with our Japanese colleagues the very practical question of the adaptation of major crops to climate change. We know that some of our major crops, I would cite particularly maize, will be quite severely affected by climate change in the future, rice – a bit less so, but still, that’s present.
So then, there are a whole host of lesser crops, particularly vegetables and fruits, from which there’s comparatively little investment going into plant breeding and adaptation work. So this is an issue that we have discussed, and we’ll continue to discuss with our Japanese counterparts, as well as the soil health and fertility.
I think from the U.S. standpoint we’re certainly concerned about some of the basics, and the basics when it comes to food production, food security, are – you need healthy soils and you need healthy adapted crops, and if you don’t have those two things, you don’t have food security.
There are many other factors that are involved in creating food security, the infrastructure issues, and we’ve been talking about trade and other matters, but the basic issue has to do with soils and with crops. And so we’re certainly, I think, going to have some very productive talks with Japan about that. And Japan as you know is a member of the AIM for Climate Coalition, so that there’s a Summit coming up in Washington with that effort in May, I believe, and we’ll be seeing the Japanese delegation there at that point as well.
ASAHI SHIMBUN: What are your thoughts on the situation of China’s hegemonic expansion, including the Taiwan issue, with regards to food security?
DR. FOWLER: Well, I’ll say one thing in general and then I’ll probably pass that point on to my colleagues, here more knowledgeable and more directly involved.
You know, one of the things you have to notice about the global food situation, if you take a very long historical look at it, is that the one of the biggest things that’s changed in my lifetime, has been that that India and China have become much more self-reliant in food.
It used to be when I was a young man that a food crisis would be caused when something very bad happened in India or China, caused production to go down. That was an automatic global food crisis. And we haven’t had that kind of situation in some time now, some years.
So, I think it’s important to realize that some progress has been made and we do depend on the major nations of the world that have so much capacity to be more stable and self-reliant in food than they were when I was young. But obviously, we are distressed by a number of actions that China has taken. We’re distressed about some of the stockpiling and the bans on exports, of fertilizer and such. But, as far as the larger geopolitical issues, that’s perhaps not in my area of expertise too much, so I’ll defer on that one.