In just the first three months of 2022 food and feed trade has been buffeted by war, port closures, inflation, reduced crop and livestock production in many top exporting nations, surging input costs, continued transportation disruptions and the further spread of animal diseases. Importing countries are suffering from primary exporters being unable to supply grains and fertilizer (Russia, Ukraine), reduced beef and/or pork production (U.S., Canada, Australia) and higher prices for all production imports. Will there be consumer backlash against food prices and shortages that challenge governments, and possibly cause the downfall of governments? (Note that in 1962 there were major protests across Russia against high dairy and meat prices, with many protesters killed by security forces). How will governments alter domestic agricultural production and trade policies to address these issues, and will the changes be temporary or permanent?
Some governments have already altered policies on food imports and/or exports:
Argentina announced controls on wheat and other food prices, as well as export restrictions; Brazil reduced tariffs by 10% on 87% of goods and services until 31 December 2022; India lowered tariffs for edible oils; Taiwan reduced tariffs on beef by 50% and wheat to 0%; China released food reserves; Indonesia halted palm oil exports; and other nations are undertaking similar controls and looking for alternatives. For example, China and other Asian nations seek to buy broken and inferior rice as animal feed to replace corn and wheat. Russia will likely need to find other suppliers of hatching eggs for their poultry industry as sanctions have stopped such shipments. We expect some nations to become more friendly to genetically-modified crops (both foreign and domestic) and shifting cropping patterns to fill gaps in domestic demand.
With about 276 million people currently amid a hunger crisis and malnutrition rising in Africa and Asia, governments are concerned about their own survival. The war against Ukraine may have unintended consequences in terms of bringing down other governments not connected to the war, but reliant on food imports. Fear-driven import policy changes could reshape global agriculture trade as the world may be shifting from import-controlled policies to import-hungry policies and that will reshape global trade and food production. – Richard Fritz