On 1 December 2022, the international institution World Bank published the latest update on the implementation of the aid plan introduced by the same organization last May. The report considers the constant increase in the inflationary phenomenon that has been underway since the beginning of July, greatly aggravated by the outbreak of the Russian-Ukrainian conflict on 24 February, and its repercussions on food security of many countries.

On 18 May 2022, the organization announced an aid plan for a total value of   $ 30 billion to be directed to the various projects already underway or introduced ad hoc. 

The objective of the loan is to deal with the recent inflationary crisis and its various effects in the countries affected by this phenomenon. In fact, the report analyzes how strongly affected by the inflationary phenomenon are both the countries considered low-income, 84,2% of them, and the high-income countries, 93% in total, of which 85,5% is affected by a particularly high price increase.

Among these countries, those that are most feeling the influence of the rapid increase in prices are located in the following geographical areas: Africa, North America, South Asia, Europe, and Central Asia. 

To deal with the resulting food crisis caused by the rapid spread of inflation, the aid plan identifies four main fields of action:

• Support for production and producers: launch of actions aimed at eliminating possible obstacles to trade in inputs and at supporting public policies and expenditure aimed at farmers and production. 
• Policies to stimulate the increase in trade: commitment to eliminate export restrictions to regulate the price of food and imports which could discourage the production of various products.
• Sustain for vulnerable families: support for nutrition-sensitive social protection programmes.
• Investments in sustainable food and nutrition security: strengthening food systems to avoid strong repercussions of recent crisis scenarios – conflicts, climate change, diseases – through long-term and short-term investments to respond to immediate needs.

In order to better develop the four points introduced by the aid plan, the organization identifies six distinct funding projects to be implemented over a 15-month period in sectors such as agriculture, food and social protection:

• $ 125 million project to encourage the development of the agricultural sector in Jordan, strengthen competitiveness and inclusion in the sector and guarantee food security in the medium and long term.
• $ 300 million project to enhance access to the free market in Bolivia and the adoption of eco-sustainable agricultural techniques.
• $ 315 million project to strengthen the nutrition system in Chad, Ghana and Sierra Leone and ensure its resilience in the face of the food crisis caused by conflicts.
• $ 500 million “Emergency Food Security and Resilience Support” project to ensure resilience in the face of the ongoing food crisis in Egypt and support ongoing reforms to improve nutrition systems.
• $ 130 million project to reduce the economic impact of the war in Ukraine by supporting the import of wheat by protecting small producers in Tunisia.
• $ 2.3 billion project called “Resilient Food Systems for South-East Africa” to help increase the resilience of food systems to address growing insecurity in the regions of South-East Africa.

 In addition to these six separate funding projects, the report focuses on the aftermath of the food crisis that has hit Ukraine as a result of the ongoing conflict. 

To deal with the crisis, on 22 July Ukraine and Russia signed, thanks to the Turkish mediation, the agreement on the export of wheat called the Black Sea Initiative. The initiative ensures the safe passage of tens of millions of tons of grain through the black Sea from the Ukrainian ports of Odessa, Chornomorsk and Yuzhne. From the beginning of the war, on February 24, to the signing of the agreement, ships loaded with grain had been stranded in Ukrainian ports.

Given the importance of the agreement, on 17 November the United Nations announced the extension of the Black Sea Grain Initiative for 120 days - the deadline was set for 19 November. 

Despite the extension of the agreement, Ukraine has repeatedly requested to be able to include the ports of the southern region of Mykolaiv, through which 35% of Ukrainian food was exported before the war. The Russian response to requests has always been negative and continues to be.

Although the signing of this agreement by Russia and Ukraine has in fact guaranteed the safe resumption of the transport of grain, of which Ukraine is one of the main exporters in the world, avoiding a serious food crisis, grain exports remain considerably lower than pre-war levels. Furthermore, the initiative has helped to lower global wheat prices, but not that of wheat-based products such as bread and pasta which continues to remain high.

According to the analysis conducted by the report, the trade policies introduced by countries not affected by the conflict to limit its consequences have aggravated the food crisis. In fact, the introduction of food export bans and export restrictions in an attempt to increase domestic supply and reduce its prices have resulted in excessive restrictions on food trade.

The increase in prices in the food sector has rapidly spread the crisis globally, increasing phenomena of extreme poverty, food insecurity and therefore consequent malnutrition.

The aid plan introduced by the World Bank Organization, worth a total of $ 30 billion dollars, is trying, on the one hand, to encourage governments to take trade policy initiatives that can reverse this trend and, on the other, to support the populations of the territories most affected and therefore most at risk.

Original report available here:

https://www.worldbank.org/en/topic/agriculture/brief/food-security-update

By Federica Tognolli