Skyrocketing inflation, fertilizer shortages due to the conflict between Ukraine and Russia, floods, and droughts are some of the phenomena that are strongly affecting agricultural production in Latin American countries
LatinAmerican Post | María Fernanda Ramírez Ramos
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Leer en español: Crisis de seguridad alimentaria en Latinoamérica: precio de los alimentos por las nubes
Various international organizations have warned that a hunger crisis is likely to come due to various current situations. This year the World Bank and the G7 Presidency created the Global Alliance for Food Security, and to respond to this threat they have invested 30,000 million dollars to help the most vulnerable areas. For example, in Latin America, 300 million dollars have been invested in Bolivia to promote smart agriculture and protect food security.
Factors such as the war in Ukraine, the impact on crops due to the climate crisis, and high inflation are hurting food security around the world. Of course, Latin America is not immune to this phenomenon and it is highly vulnerable. Venezuela, Argentina, and Suriname are in the top 10 countries with the highest food inflation in the last month. Likewise, Colombia ranked eighth among the countries with food inflation higher than general inflation. We explain the reasons.
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War In Ukraine
To understand a bit about the influence of the war in Ukraine on world food sovereignty, it must be remembered that, according to a report by UN Women, this country is one of the main suppliers of wheat to the World Food Program that benefits more than 120 nations. As for Russia, it is the main exporter of fertilizers necessary for agricultural production in nations with depleted soils.
In this regard, the World Bank points out in one of its reports that farmers in countries like Honduras have witnessed how the value of a quintal of fertilizers has doubled, from US$20 to US$40. The said organization also explains that in Latin America 90% of farmers use granulated (solid) fertilizers because their cost is lower and they do not depend on the availability of irrigation. In turn, these types of fertilizers are composed of Nitrogen, Potassium, and Phosphorus. "The main raw material inputs for the production of nitrogen-based fertilizers are air and natural gas (...) Thus, countries with access to natural gas, such as Russia, Canada, Belarus, and China, are the main producers and exporters of nitrogenous fertilizers”, clarifies the World Bank.
Faced with this situation, the agricultural sector has had no alternative but to increase the price of the food they sell, which, naturally, has marked a rise in inflation.
Venezuela, Argentina, and Colombia are in the ranking of countries with the highest inflation in the price of food prepared by the World Bank. According to the International Monetary Fund, this trend is explained not only by the Russian invasion of Ukraine, which we have already analyzed but also by the COVID-19 pandemic.
In the first instance, according to the IMF analysis, the inflationary processes in Latin America were driven: "by the rise in food and energy prices", but they became more extensive "as a consequence of the inertia of monetary policy and wage indexation practices (...), as well as the strong recovery in demand, first for goods, but later also for services”.
Likewise, the post-pandemic effects have also influenced the increase in inflation in Latin American countries, the above due to the recovery of private consumption that was registered in 2021. Once the limitations on people's mobility were suspended, there was an increase in the demand for services which, in turn, fueled the increase in inflation.
A third factor that has affected food security in Latin America is the climate crisis, which is closely linked to the water crisis. As an example, the World Bank mentions the droughts that have occurred in the south of the continent and that have affected the quality of crops in countries such as Paraguay, Chile, and Argentina, resulting in losses estimated at US$24,000 million in the last four decades. The other side of the coin is represented by the floods that annually have wreaked havoc in the order of US$1.7 billion.
Therefore, the World Bank urges that "Governments, citizens and private actors" consider "water a strategic, finite and manageable asset, and a good that transcends borders". It also recommends, to guarantee future sustainability, that the water infrastructure be managed in such a way that the precious liquid is handled, stored, and distributed in a better way. This requires "preserving watersheds, protecting and expanding storage capacity, both natural and built, and promoting investments in rural areas and poor urban areas to ensure that water reaches all families, all farmers, and all industries.