Food crisis fuels fears of protectionism compounding shortages

Davos, May 25 (BNA) Business leaders and policy makers at the World Economic Forum said that the global food crisis has precipitated protectionist steps by countries that are likely to further exacerbate the problem and may lead to a wider trade war.

In a sign of mounting pressure on food supplies and rising prices, a government source said India may restrict sugar exports for the first time in six years to prevent domestic prices from rising, Reuters reported.

Meanwhile, Indonesia, the world’s largest palm oil exporter, will eliminate subsidies on bulk cooking oil and replace it with a price cap on raw materials for local refineries.

“It’s a major issue, and frankly, I think the problem ahead is greater than what is behind us,” Gita Gopinath, first deputy managing director of the International Monetary Fund, told Reuters of growing concerns about food security.

Protectionism looms over Davos, prompting calls for urgent negotiations to avoid an all-out trade war.

“It is very important that world leaders sit at the table calmly and talk about how to manage trade, food and investment,” Jay Collins, vice president of banking, capital markets and advisory at Citigroup, told Reuters Global Markets. Forum in Davos.

“There’s actually a lot of conversation with the G7 going on here in the last 48 hours,” Collins said.

For residents of sub-Saharan Africa, for example, 40% of their consumption is spent on food, Gopinath said. In addition to the “big hit to the cost of living”, higher prices have led to increased hoarding by governments.

“We have more than 20 countries that have imposed restrictions on exports of foodstuffs and fertilizers, and this will only exacerbate the problem and make matters worse,” she said on Monday.

Beasley told Reuters in an interview in Davos that the number of people “walking toward starvation” had risen from 80 million to 276 million over the past four to five years.

Beasley added that several companies in Davos are in touch about how to act to tackle the food crisis.

“Agriculture must be part of the solution to the problem of climate change and it must address food security,” Eric Verwald, CEO of Syngenta Group, said during a panel discussion on Monday.

Ferwald said Syngenta has demonstration farms that show how farming practices like no-till and winter mulching to prevent soil erosion have been better for soils, food security and climate change.

Gilberto Tomazoni, CEO of JBS SA, the world’s largest meat processor, told a World Economic Forum panel on Tuesday that another potential solution to the food crisis is tackling waste.

“Humanity is facing two major emergencies at the same time, we need to confront climate change and we need to produce more to feed a growing population,” Tomazoni said.

Tomazoni added: “The way we produce today is not sustainable. This is the big, big challenge we face. Food waste, we need to confront this situation.”

MI