Third G20 Finance Ministers and Central Bank Governors’ Meeting “Economic Impact of the War on Food Insecurity” Statement
by Dr QU Dongyu, FAO Director-General
15/07/2022
Third G20 Finance Ministers and Central Bank Governors’ Meeting
“Economic Impact of the War on Food Insecurity”
Statement
By
Dr QU Dongyu, FAO Director-General
15 July 2022
Chairperson,
Excellences,
Ladies and Gentlemen,
1. I am pleased to join you once again today now at three am before dawn, it is very dark, but sun will rise in the east every day.
2. First: let me begin by sharing that our latest Flagship report on the State of Food Security and Nutrition in the World (SOFI) indicates that in 2021, up to 828 million people suffered chronic hunger.
3. This is an increase of 46 million from 2020 and 150 million from 2019, before the COVID 19 pandemic.
4. Around 2.3 billion people in the world were moderately or severely food insecure in 2021 - 350 million more people compared to 2019.
5. Furthermore, this data reports on global hunger prior to the outbreak of the war in Ukraine, which has compounded the situation particularly for the poor and most vulnerable.
6. The Russian Federation and Ukraine are important players in the global food market and fertilizers supply, and the war has multiple implications for global markets, affecting trade, prices, and livelihood,
7. And will continue to impact on food security and nutrition for many countries in the months and years to come.
8. Second: already prior to this war, international food commodity prices were at an all-time high,
9. Mostly due to interruption of supply chain, but also soaring prices of energy and agricultural inputs.
10. The latest FAO Food Price Index, released on 8 July, declined slightly for the third month in a row, and averaged 154.2 points in June 2022 from highest at 160 point in March, 2022.
11. The drivers include:
• a strong global demand due to the recovery;
• adverse weather in some producing countries;
• high production and transportation costs; and
• supply chain disruptions due to COVID-19 – now made worse by the ongoing war.
12. Third: the war is also affecting the fertilizer market, as the Russian Federation and Ukraine are key exporter of fertilizers.
13. Some 15 net fertilizer-importers in Latin America, Europe and Asia have an import dependency of over 30% on Russian fertilizers.
14. Among these are Brazil, India and the European Union, who are major agricultural producers and key players in world markets.
15. Fourth, while food prices are high in the retail market, the prices of agricultural inputs including feed, fertilizers, pesticides and fuel, etc. have also soared more. However, farmers’ incomes are squeezed to lead decreasing production.
16. This could place a double burden upon global agrifood systems: leaving us with poor farmers and lack of food availability at the same time.
17. The current situation represents a significant food security challenge, especially for low-income food import dependent countries, and vulnerable populations.
18. To help the most affected countries deal with the rising import costs, FAO has proposed the establishment of a global Food Import Financing Facility (FIFF).
19. The food import bill for the 62 more vulnerable countries, which are net food importers in the low and the lower middle-income groups, has increased to 24.6 billion US Dollars.
20. This affects 1.79 billion people.
21. The FIFF will assist countries in financing their food purchases to minimize any risk of social unrest. With your support, it could be implemented by the leading financial agencies under their balance of payments financial mechanism.
Dear Colleagues,
22. The world needs solidarity and big passion to help the vulnerable first.
23. These crises push us to take immediate action, as well as middle –long term pathways, to transform agrifood systems to be more efficient, more inclusive, more resilient, and more sustainable for better production, better nutrition, a better environment, and a better life, leaving no one behind.
24. Let us continue working together in an efficient, effective, and coherent manner to end hunger and malnutrition, and ensure food security for all.
25. Thank you.