The Banking Executive Magazine - December Issue 2022

Avoiding a Global Food Crisis the BANKING EXECUTIVE 18 ISSUE 168 DECEMBER 2022 restricting exports of grains and other key foodstuffs in an effort to maintain domestic supplies and limit price in- creases. The rising number of com- plaints to the WTO from exporters in several member countries and juris- dictions underscores the extent of the problem. Such export controls can trigger a spiral of price increases and new restrictions. The World Bank es- timates that 40% of the increase in global wheat prices during the last food-price crisis in 2010-11 resulted from governments’ attempts to insu- late domestic markets. But the world can mitigate these risks. Experience shows that interna- tional cooperation can help manage the knock-on effects of surging food prices. For a decade, sharing infor- mation about food supplies and stockpiles through the Agricultural Market Information System has en- abled leading exporters and im- porters to prevent panics and keep markets functioning smoothly. With the global trading system al- ready struggling to cope with high transport costs and congested ports, closer coordination could help stabi- lize international markets for food, energy, and commodities, and mini- mize additional disruptions to supply chains. Importantly, the WTO’s mon- itoring and transparency function can help ensure that food and agri- culture supply chains that are not di- rectly affected by sanctions remain open and operate efficiently. Better visibility regarding market dis- ruption would also enable the inter- national community to identify and mobilize financial and other assis- tance for poor countries badly af- fected by rising food prices. This is particularly urgent because, even be- fore the Ukraine war, the post-pan- demic economic recovery had been leaving much of the world behind. Growth in the poorest countries was furthest behind the pre-2020 trend, reflecting their weak fiscal capacity and inequitable access to COVID-19 vaccines. As the world watches Ukraine’s un- folding tragedy, we must all urgently focus on how to support the Ukrain- ian people. And it is natural and ap- propriate that governments will concentrate on the disruption to their own economies. But we must also act now to ensure that some of the world’s poorest and most vulnerable people – far away from the conflict and absent from the headlines – do not become collateral damage.