Wheat an essential crop and diplomatic weapon is at the

Wheat, an essential crop and diplomatic weapon, is at the heart of the food crisis

Wheat, fruit of temperate climates and peace factor when abundant, became in a few months a diplomatic weapon related to the Russian invasion of Ukraine: a review of the reasons behind a major crisis threatening the food security of millions People.

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More than 200 million people worldwide are suffering from acute hunger, according to the UN, which fears new “hunger storms” under the influence of skyrocketing food prices since the beginning of the conflict.

Why is wheat irreplaceable?

Whether in the form of semolina, flour or bread, “everyone eats wheat, but not everyone can produce it,” summarizes French economist Bruno Parmentier, author of Nourrir l’humanity.

Wheat, an essential crop and diplomatic weapon, is at the heart of the food crisis

Today, only about ten countries produce enough common wheat to export it: China, the world’s largest producer, imports quantities to feed 1.4 billion people, with the largest exporters in Russia, the United States, the United States, Canada, Australia and Australia are found in Ukraine.

Consumed by billions of people and heavily subsidized by states, wheat is “the most important grain for global food security,” emphasizes Sébastien Abis, associate researcher at the Institute for International and Strategic Relations (Iris) in Paris. Maize, which is produced more, is “mainly used for animal feed or industrial needs”.

An already tense situation

Grain prices were already very high before the war: the price of wheat rose in all markets from autumn 2021 and remained at high levels thanks to the post-Covid economic recovery.

Several factors explained this rising curve: the rise in energy costs following the trajectory of hydrocarbons, nitrogen fertilizers (made from gas, the price of which has tripled in a year), transport (port congestion, lack of labour…) and the weather , particularly with a disastrous crop in Canada under a dome of sweltering heat last summer.

Why did the outbreak of war speed things up?

In the course of the Russian invasion on February 24, 2022, the wheat price broke records: On the European market, the price climbed to over 400 euros per ton in May, twice as much as last summer. .

Wheat, an essential crop and diplomatic weapon, is at the heart of the food crisis

This increase is unsustainable for the poorest, especially for the thirty countries whose imports are “depending on Ukraine and Russia for at least 30%”, stresses the FAO.

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These two countries, historically breadbaskets of Europe, accounted for 30% of the world’s total grain exports. In recent years, their production has steadily increased, with Russia taking the lead among exporting countries, while Ukraine has been on the way to third place.

Their weight in the market weighed heavily on the “dynamics of fear” that prevailed in the early months of the conflict, notes Edward de Saint-Denis of commodities brokerage Plantureux & Associés.

What consequences for Ukraine?

The closure of the Sea of ​​Azov and the blockade of Ukraine’s Black Sea ports immediately deprived markets of more than 25 million tons of seeds (all products combined) that were stuck in farms or silos at port facilities.

Wheat, an essential crop and diplomatic weapon, is at the heart of the food crisis

Despite huge efforts to evacuate these products by road and rail, exports remained six times lower than by sea.

The farmers finally managed to sow up to the edge of the front areas. According to estimates by the Main Union of Producers and Exporters of Ukraine, wheat harvests will fall by 40% and corn by 30%.

Wheat, a weapon of war?

“In times of war, the big producing countries literally hold the fate of others in their hands,” Bruno Parmentier observes, because “no government can afford to starve its capital”.

But famines are “never linked to food production,” “they are always caused by problems of access,” stressed Arif Husain, chief economist at the World Food Program (WFP).

Wheat, an essential crop and diplomatic weapon, is at the heart of the food crisis

With the conflict deadlocked, negotiations on the establishment of “safe sea corridors” allowing the export of Ukrainian stocks began in early June under the aegis of Turkey at the request of the United Nations. Vain.

Moscow has called for Western sanctions accused of exacerbating the food crisis to be lifted, at least in part. A request that the head of American diplomacy, Antony Blinken, described in early June as “blackmail”.

The solution could have been for countries with reserves to put grains back on the market. But most stocks are in China, which never resells them, and India, which had pledged to sell more in solidarity with the most dependent countries, has suddenly backed down: hit by a devastating heatwave, it imposed a temporary embargo on its exports – which drove up prices further.

Russia, whose wheat harvest this year promises to be exceptional, “continues to sell to certain countries, particularly in the Middle East, which in return will not vote against it at the UN,” notes a market watcher. . “It also distills its gas and fertilizers, which are powerful diplomatic levers. »

Which solutions?

In the short term, the solution will lie in new crops that promise to be “pretty good” in America, Europe and Australia. The 2022 wheat harvest is forecast at 775 million tons, according to the US Department of Agriculture.

Prices, which had risen very sharply for geopolitical reasons, have fallen in recent weeks for several reasons: the start of the harvest, the integration of markets with Ukraine and fears of an economic recession, explains Edward de St. Denis.

“In the medium term, we must ensure that more food is produced and processed locally,” argues Elisabeth Claverie de Saint-Martin, patron of CIRAD, a French organization for agricultural research and international development cooperation, during a conference.

“Agricultural Africa covers 80% of its needs. We must now generalize agroecological transitions to cope with climate change and support these transitions, which must be economically sustainable,” she says, recalling that our agri-food system is not divided between waste in the north and the problems of transport and cold lies chain in the south, “30% of what is produced in the world is never consumed”.

What is the weight of Ukraine in seed production?

“Ukraine, a major exporter of wheat and sunflowers, is also a key player in seed production, a strategic activity for its agricultural balance sheets but also for those of its economic partners.

In 2020, Ukraine produced 70,000 hectares of grain seed, compared to 120,000 in France and around 115,000 in Spain and Germany.

This country is the second most important non-EU destination for French exports of seeds and seedlings. Several French companies have set up production and sales units there. These activities, together with exports, account for almost 400 million of the €3.3 billion turnover of French seed companies.

About fifteen companies were affected by the war (transport, supply, security problems). »

What were the effects of the conflict?

“Ukraine mainly exports raw materials (wheat, sunflower) to the markets. Therefore, without some of its seeds, it will produce less and export less, notwithstanding the improvement in export conditions.

Peasants who were exempt from military service could sow almost anywhere, but with difficulties: lack of fuel for tractors, mined fields near the front, destruction of agricultural equipment.

Loss of seed production is estimated at 40 to 50%. That will be the problem. Because what is not sown is not available for cultivation next winter. For 2023 there will be no shortage in France. On the other hand, from 2023 and 2024 there will be some at the European Union level.

Can we make up for this deficiency?

“France would have the technical ability to compensate, but the increase in agricultural production prices has made seeds less attractive. Farmers would rather prefer selling at the markets.

Sunflower seeds, for example, are better paid than those destined for oil production in normal times, giving encouragement to multiplier farmers. This year we wanted to increase the French production of sunflower seeds, but we only sown 15,000 hectares, a decrease of about 10% compared to 2021. The availability of seeds for 2023 is therefore reduced by the same amount.

Seed production is also more labour-intensive. We have watering restrictions – for corn, sunflower – at the time of pollination: water stress must be avoided so that the plant can then produce at full capacity.

We also have isolation restrictions: we require that there be 500 to 1,000 meters between crops to preserve the purity of the resulting strain – to avoid pollen transmission.

For the future world production of sunflowers, everything will depend on the seed harvest in California, Turkey, Russia or Argentina. Winter varieties such as wheat were already sown at the beginning of the conflict: if there is a problem with availability, it will be in 2024.