169th Session of the Council Statement
by Dr QU Dongyu, FAO Director-General
08/04/2022
169th Session of the Council
Statement
By
Dr QU Dongyu, FAO Director-General
8 April 2022
Mr Hans Hoogeveen, Independent Chair of the Council,
Excellences,
Ladies and Gentlemen,
1. It is now more than two years that the COVID-19 pandemic continues to negatively impact our lives, our health and our economies,
2. Hitting the poorest the hardest as they face greater exposure to the pandemic and are the most affected by rising food and fuel prices.
3. This month, food prices, as we measure them by the FAO Food Price Index, reached a new all-time high, is up 12.6% from February, with a large increase for the cereals price sub-index up 17.1% and vegetable oils sub-index up 23.2%.
4. Particularly, prices for staple foodstuffs such as wheat and vegetable oils have been soaring lately, imposing extraordinary costs on global consumers, particularly the poorest.
5. The war in Ukraine has made matters even worse.
6. With energy prices rising in parallel with food prices, the purchasing power of vulnerable consumers has further decreased.
7. This additional burden comes at a time when higher health spending and the costs of controlling the pandemic are already squeezing the budgets of many governments.
8. Higher fertilizer prices today could lead to lower fertilizer use next season and possibly beyond, with the real prospect of lower food productivity resulting in even higher food prices.
9. This would potentially result in even more undernourished people in 2022 and months to come.
10. The Russian Federation and Ukraine are important players in all three markets of concern, together they account for nearly 30% of global wheat exports, and about 80% of global sunflower exports, and the Russian Federation is the largest exporter of fertilizers.
11. Supply disruptions in these two countries will be felt across global agrifood systems.
12. Who will bear the burden?
13. First, and foremost, Ukraine, because of the ongoing destruction that is forcing people to be displaced, with enormous human suffering, and is destroying all its production value chain and supply chain.
14. Second, it will affect countries that are highly dependent on Ukraine and the Russian Federation for their food (including raw material for feed), fuel, and fertilizer supplies,
15. And will have to resort to alternate suppliers, but that will take time.
16. Third, it will affect all consumers worldwide as the increase in food, energy and fertilizer prices is putting at risk the next harvest globally.
Dear Colleagues,
17. This session of the Council is an opportunity to discuss these problems, the prospects, and possible approaches to prevent an even further escalation of the crisis.
18. Allow me to offer a few thoughts before you start the discussions.
19. The supply situation on global food markets is tight and we have reason for concern, but there is also evidence that the current problems can be contained, and a global food crisis like in 2008 can be averted.
20. Let me first underline what is similar to 2008: we have high food, fuel and fertilizer prices, and high transportation costs.
21. What makes matters worse today is the two years-pandemic had severe comprehensive consequence and need to manage its global effects, while coping with Conflict and with Climate in the short, medium and long term.
22. The poorest countries have been severely affected by the pandemic, which has increased the level of inequality and this makes them more vulnerable relative to 2008.
23. Second, we have not yet seen the level of export restrictions as in 2008, and we must ensure this does not happen - but we also see the big global logistic problem.
24. Third, the major difference from 2008 is that today we are facing the big risk that our planting season for next year will be drastically affected - in 2008 the shock was due to a drought and did not put at risk the next planting season.
25. This will not only affect Ukraine and the Russian Federation, but all the major producing countries.
26. Most importantly, we know the mistakes made in 2008, especially counter-productive policies, and we know that we can avoid them today – to avert a global food security crisis.
27. Above all, we must not shut down our global trade system, and exports should not be restricted or taxed; producing more and better in other countries and regions of the world is urgently needed.
28. Food needs to be accessible, but making starchy food cheaper relative to high value commodities will lead to poor nutrition, with poor resource use, and deprives others of their basic supplies.
29. Each of us can contribute:
• Firstly, we need to appreciate the foods produced by farmers with sweat, the real cost of labour involved, agri-inputs and our natural resources;
• Secondly, consumers must stop food waste; and
• Finally, we must improve market transparency and market intelligence so that decision-makers can make the right choices.
30. As host of the AMIS secretariat, FAO has played a key role in this regard.
31. Our Information Note, presented two weeks ago to Members, to the G7, and the G20, shows how FAO has effectively provided market intelligence.
32. We will continue to keep the Information Note updated and Members informed of latest developments in a timely manner.
Dear Colleagues,
33. FAO is staying and delivering in Ukraine, and has reinforced its team on the ground.
34. FAO has completed nationwide needs assessments in Ukraine, targeting local level administrations and commercial farmers, as well as an ongoing household survey in areas with a significant influx of internally displaced people.
35. Preliminary results show a worsening trend in food security, especially in areas with active ongoing fighting, and those with the highest numbers of displaced people (up to 15% of their total population).
36. 20% of host households lack cash to meet their basic food needs, with destocking of small farm animals, and in some cases large ruminants.
37. In terms of agricultural production, data indicates limited availability of critical agricultural inputs, including seeds, fertilizers, pesticides, equipment, fuel and livestock supplies, arising from a combination of logistic and financial issues.
38. Almost one-third of farmers reported facing non-functioning supply chains and input supply networks, with small commercial producers and subsistence farmers affected the most.
39. Only 10% of the 50 million US Dollars initially requested under the Rapid Response Plan for Ukraine has been received to date.
40. An updated Rapid Response Plan for May-December 2022, requests 115 million US Dollars to reach almost 1 million individuals - which means approximately 330 000 households.
41. The Plan has been developed in coordination with the Government of Ukraine and civil society partners across targeted areas, and requirements will be included in the revised UN Flash Appeal.
42. It is anticipated that the Plan be continued beyond 2022, based on the evolution of the current crisis.
43. The focus of the Rapid Response Plan is on:
• ONE: maintaining food production, through providing cash and inputs for cereal crop production in October, and the Spring vegetable and potato production, as well as supporting harvesting of the 2021 winter crop in July and August; and includes providing livestock production and health inputs and services.
• TWO: supporting agrifood supply chains, value chains and markets by engaging government and the private sector to provide technical support services to household level and smallholder producers through public-private partnerships.
• THREE: coordinating the Food Security and Livelihoods Cluster, in particular through continued assessments of food security, markets and value chains.
Dear Colleagues,
44. To address the impacts of the war in Ukraine on global food security, FAO has developed a detailed technical note on a global Food Import Financing Facility, which aims to present a mechanism to respond to rising food import and input costs.
45. Tapping into the Facility would allow vulnerable countries to mitigate long-lasting impacts on their agrifood systems and reduce future needs for emergency assistance.
46. We have also developed a proposal on the implementation of our Food Insecurity Experience Scale at national and sub-national level in the most vulnerable countries to better target their social protection assistance.
47. Additional concrete proposals by FAO include:
• Fast implementation of detail soil maps, supporting most vulnerable countries to use their fertilizers efficiently, following lessons learned from the soil mapping experience in Ethiopia for example;
• Efficient and well-targeted social protection plans based on previous evidence, and that respond to specific needs of countries. In countries hosting refugees, access to existing social protection systems and job opportunities should be facilitated by lifting legal access barriers and, where needed, by increasing the capacity of host countries’ social protection systems.
• Improvement of biosecurity measures in Ukraine’s neighboring countries to minimize the spread of African Swine Fever and other animal diseases, by taking steps to facilitate early detection, timely reporting and rapid disease containment; and
• Strengthened market transparency and policy dialogue to minimize disruptions, ensure continued functioning, and the smooth flow of trade in food and agricultural products. In this respect, we are proposing the continued strengthening of AMIS.
48. All our proposals are now uploaded on our website, in a section specifically on Ukraine and latest FAO response.
Dear Colleagues,
49. The document submitted for this Council session provides an overview of all major issues, risks, and policy recommendations,
50. And it offers a solid basis for transparent and open discussions, in line with the FAO mandate and in accordance with the FAO Basic Texts.
51. Let us work together today in an efficient, coherent and technical manner to ensure better production, better nutrition, a better environment and a better life for all, leaving no one behind – now, more than ever.
52. Thank you.