Food security now top priority for G20 cooperation

Many countries have panicked in the face of global shortages. China banned the export of agricultural chemicals, Indonesia banned the export of palm oil and India banned the export of wheat. The United States has expanded its commitment to maize-based ethanol, raising the mandated amount in gasoline supplies in order to lower the cost of driving. That maize could have been diverted to human consumption, to help substitute for wheat shortages. Malaysia seems ready to lift its mandate to blend palm oil into diesel fuel supplies. That palm oil supply can now re-enter the global food supply chain.

Although many long-term, structural and policy problems have contributed to this crisis, the urgent need at the moment is to focus on improving the short-term situation.

The current crisis is more diffuse — it involves fuels, fertilizers and foods, especially wheat and vegetable oils. At the same time, the crisis is now more acute. All of these commodities are experiencing low inventories, curtailed production, and disrupted supply chains. It will not be easy to stop this crisis, much less return to more normal trade patterns. Coordination among the world’s leading economies will be needed to make progress.

Fortunately, an opportunity for such coordination is on the horizon, the forthcoming G20 summit meeting in Bali in November 2022. With Indonesia in the chair, there is an opportunity for that country and for ASEAN, as a major regional trade organisation, to get a formal commitment from G20 members to focus on food security and roll back trade restrictions.

It will require a firm pledge to avoid any further export restrictions on critical commodities, especially wheat, vegetable oils and fertilizers. Leaders will also have to agree to reduce, and eventually eliminate, export restrictions on these critical commodities. Individual countries can be given considerable leeway to time their actions in accordance with their local political circumstances.

To ensure commitment, it is important to establish a small secretariat, with Indonesia in the chair, to monitor and publish the details of implementing the commitments. Transparency is the best enforcement mechanism. Sadly, neither the United Nations nor the World Trade Organisation can play a credible role here. But other organisations, such as the Agricultural Market Information System and the International Food Policy Research Institute could help fill the gap.

It seems unlikely that China will be an enthusiastic participant in either early ‘good faith’ efforts or in joining the G20 commitment itself. Again, diplomatic efforts need to be brought to bear to avoid forcing China into a box and to encourage its engagement with this proposed Indonesian and ASEAN-led initiative. Although the United States or Australia are unlikely to be able to play constructive roles in this diplomacy, the European Union could be quite influential.

Now is not the time for timid actions. Millions of lives are at stake if the global food supply chain continues to malfunction and if policymakers respond by restricting food exports in the face of severe shortages. It is understandable that individual countries are safeguarding their local populations with food produced on their own soil, but this exacerbates the rise in international food prices. Future prosperity depends crucially on reliable international trade and all countries need to accept their role in supporting it. A further retreat into autarky would be disastrous for world food security.