Britain must prepare for a global food crisis | Dominic Lawson

Second Order Effects

I think when we look back upon the Ukraine conflict, we will see it as the first stage towards a wave of major instability throughout the world. Just as we remember events such as the assasination of Archduke Ferdinand, or a Tunisian man setting himself on fire not as singularly bad events in themselves but as the opening salvos of a disastrous escalation which have changed the world. 

It seems to be a law of history that one crisis sows the seeds for the next one. This is doubly true in a globe as interconnected as our own, where we see higher rates of localised crises becoming global in scope. 

It is understandable why political leaders want to focus on the current crisis but it is the duty of strategists to begin planning for the next. And the next one is likely to be a global food crisis. 

It has become common to hear the facts about Ukraine and Russia’s importance in the global food markets. Ukraine alone is the world’s fourth largest exporter of corn, sixth largest of wheat, and most important exporter of sunflower oil, making up 47 percent of global exports for the product over 2021.

Understandably, the conflict has complicated the production process. Local farmers are hesitant to cultivate crops in such a deadly and fluid situation. And, again understandably,  the Ukrainian state has ordered that farmers focus on supplying the domestic consumer base to prevent mass hunger in the country,  meaning that exports will be further restricted. 

If the war was to end tomorrow, we would still have the issue of Ukrainian farmers being reluctant to produce and sell as they are unlikely to consider the situation stable enough to begin the long process of cultivation and production. 

This is to say nothing of the potential nonfunctioning of the ports of  Odessa and Mariupol, both of which are likely to require major and time consuming repairs before being fully operational and capable of exporting goods to the rest of the world. 

Stated bluntly, Ukraine is now an unreliable source of produce for the world’s markets and is unlikely to be for some time, likely several years at least. 

This is a bad situation but it becomes worse when we factor in the role of Russia. Russia is a commodity superpower. While we often focus on the role of natural gas and oil (a plentiful supply of which is vital for keeping food prices down), we often forget about the fact that Moscow is the world’s largest fertiliser supplier.  

While Western policymakers have been hesitant to target the oil, gas and fertiliser industries, so-called “shadow sanctions,” where the private sector will decide that dealing with the Russian regime will be too toxic and will opt to voluntarily rescind exports and business. 

On a global level, the conflict has coincided with some of history’s lower global food storage levels. 

Food stocks held by the world’s largest exporters are now at their lowest point for close to a decade. If stocks were relied upon, we could expect to be able to feed the world for roughly 27 days. This is likely an overestimate, considering we could expect China, or the US to be able to outbid all competitors to secure stockpiles. 

Beijing has already been on a buying spree over the previous five years. In fact, an underappreciated factor which has generated recent inflation has been the CCP’s hoarding of wheat and maize. In 2021 alone, China stockpiled half of the world’s staple goodstuffs. While the Chinese state has always been long termist in its policies, to invest so much upfront, and to continue to do so, suggest they have been spooked by something. 

In the West, where corporate entities compose the power elite, the view is the same.  The CEO of Blackrock, the world’s most powerful financial empire, stated in blunt terms that he saw a coming food crisis as a major systemic risk. Palintir, a global intelligence service, has purchased physical gold bullion to hedge against a coming disaster. Interestingly, Palintir works closely with the World Food Programme and most likely has access to immense amounts of data from the organisation.

A study from Mckinsey detailed that the chance of multiple breadbaskets failing has doubled over the last decade, and will increase with likelihood over the years to 2030 and beyond. While still low, the chance is not minimal and increases as time goes on. Increased complexity leads to a scenario when breakdown could become inevitable. 

If the world’s most powerful technocrats, people with access to some of the best intelligence on the planet, are preparing for a food crisis, it would be wise for the British government to alter from its normal short termism and begin planning for an uncertain future.

Hungry People Are Angry People

Vladimir Lenin once said that every society is three missed meals away from disaster. 

And he was right. There is a near perfect correlation between rising food prices and political instability. Some of the most famous revolts have rising food prices at their core, including the French revolution, and the recent Arab Spring riots have rising food prices at their core.

This crisis will be felt most severely in the world’s middle income countries. In 2008, when a mix of environmental factors and speculative market pressure saw a steep rise of the prices of wheat, soya and rice, multiple countries were faced by a wave of unrest which destabilised the global economy and security environment. Food prices are already higher than they were during that crisis.

We have already begun to see the effect manifesting. Sri Lanka, Indonesia, Pakistan are all visible examples of the after effects beginning to spill into the midtier nations of the world. Recent protests across Spain, and France, which has been motivated by the collapse in purchasing power, demonstrate that Europe is not far behind. 

This means that the United Kingdom must be prepared to see endemic instability across the European near abroad. The arch of instability which stretches from the northern regions of the Sahel through North Africa and swings into Turkey is in the prime state to witness an increase in violence as a result of this. All of these countries occupy the middle rankings of the economic league tables and all have booming populations, with a surplus of young males, the group most likely to migrate or fill the ranks of revolutionary movements and insurgencies. 

Egypt alone is a country of 100 million people. It is the largest wheat importer in the world and depends upon supplies from both Russia and Ukraine to feed its vast population. Its restive population is held down by a ruthless military establishment who have sought to artificially lower the cost of bread for over 70 million people. The Middle East is replete with examples of countries which are maintained by a delicate balancing act which a food crisis is likely to destroy. 

It would be wise for the UK to utilise some of the political capital we have gained in our support for Ukraine to begin preparing the continent for a new potential wave of migration and terrorism eminating from the Middle East and North Africa.

British Domestic Resilience

The truth is that high food prices are likely to become the norm. JP Morgan sees the world entering a commodities supercycle, which will infect the broader fuel, industrial metals and foodstuffs markets. For the average British family, this means a wave of inflation that many will be unprepared for. 

Some of this is inevitable, and short term pain will occur. However, on a longer time horizon, we have the potential to mitigate against this. The British Isles is a temperate and fertile land.

At current production levels, the UK could feed our population until the 233 day of the average year, if we were reliant solely on British produce. This is a decline of close to a hundred days from only a few decades ago. 

At present, estimates vary in regards to how much we depend upon foreign producers, figures range from just shy of fifty percent, to HSBC’s figure of eighty. All figures show that we will be impacted by swings in the global commodities markets. 

Higher chances of extreme weather events or unseasonable droughts will mean that disruption to global food supplies are more likely, as countries seek to hoard domestic resources. The fact that the food market relies on a number of core breadbasket countries (of which, both Russia and Ukraine are included) increases the risk of catastrophic collapse.

This means that cheap produce imported from Australia or North America should not be relied upon. Indeed, a deluge of cheap imports could glut the British market and render domestic production unviable, essentially opening us to greater sensitivity later down the line. 

At the start of the COVID pandemic, many exporters began restricting sales onto the world market as a precaution. Ultimately, this was found to be premature and exports resumed. However, in a genuine emergency, an outbreak of war or crop destroying disease, exporters will adopt this policy for a considerable length of time and speculators will keep the price of staple produce at an elevated level. 

Being reliant upon outside nations, even friendly ones like Australia and the US leaves us dependent on the whims of foreign politicians and rootless speculators. 

If the British government is serious about “levelling up” and intends for this to be a real policy rather than a slogan to be regurgitated by a thousand midwit journalists, it should develop our agricultural sector as a priority. This will be the job of permanent experts, not politicians, who are far too dependent on five year plans and the minutiae of the media cycle to push for any policies which will cost in the near term but benefit us further down the line. 

What this strategy will look like is up for debate, but we will likely see a shortening of supply chains with the majority of our vital produce coming from Great Britain and Ireland, we should seek to do what is necessary to  reinvigorate British farming, and community infrastructure. 

We should have education reform which pulls resources away from humanities degrees and puts them into practical skills and subjects. The creation of a national civilian service, not unlike Austria, could be in order. This could have the effect of plugging the gaps in employment, giving young people practical skills and incolcating them with a sense of common civic pride. Alongside this, investment in technology to increase efficiency and new fertilisers to boost crops yields. 

The 2020’s look set to be a decade of major disorder. The first years have produced a number of pressures on the global economic system, climate degradation, conflict and disease. All  have combined into an escalatory feedback loop which will bring disorder onto our shores. Whether that be in the forms of mass migration, terrorism or slow erasure of household finance, our little island will not be immune from the coming storm.

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