How to ensure food security for Latin America — now and in the future

Agricultural - Natural Resource Economics

Image: REUTERS/Marcos Brindicci

 This article was previously published in the World Economic Forum Blog, on July 20, 2022.

The COVID-19 pandemic, Russia's war in Ukraine and climate change have caused a global spike in food prices, degrading food security for millions everywhere.

  • Food prices are rising the world over, and in some parts of Latin America and the Caribbean (LAC) the rises are even outstripping wider inflation.

  • Despite being the world's largest net food exporting region, over 30% of people in some parts of LAC are skipping meals.

  • This global crisis demands immediate short-and long-term responses, but governments must resist implementing trade restrictions that harm people and farmers.

The global economic crisis has hit Latin America and the Caribbean (LAC) hard.

Rising prices of fuel and food have undermined the purchasing power of all families, but especially the poorer, who spend a large share of their income on meals and transportation.

Putting food on the table has become impossible for some families across the region. Many are skipping meals — they simply can’t afford them.

Latin America's food security crisis

This is particularly troublesome in Andean, Caribbean, and Central American countries, where, according to the World Bank over 30% of households face this plight.

The situation demands an urgent response, both immediate for the short-term and strategic for the long-term.

Even before the Russia-Ukraine war threatened global food security by disrupting trade in food, fuel and fertilizer, food prices were on the rise globally.

Skyrocketing food prices in 2022 have endangered the food security of millions. Image: FAO

Extreme weather events have combined with COVID-19-related impacts on food and labour supply chains, undermining food production and exerting upward pressure on food prices. Food price inflation, as a result, has exceeded overall inflation in nominal and real terms across several LAC countries.

Since LAC is the world’s largest net food exporting region, whatever happens in its agri-food systems has implications around the globe.

Indeed, LAC can benefit from international food prices increases. But some gains — for example, from global prices of cereals — are being offset by spiking costs of fuel and fertilizer.

Farmers and ranchers play a critical role in lowering and stabilizing food prices and ensuring food security. But to increase supply rapidly, the agriculture and food policy environment must promote investment and competitiveness in the sector, ensuring it has the resources and flexibility required to respond to market opportunities. In the short term, governments must resist the temptation to implement knee-jerk ad-hoc trade policies or mandates.

Food security for the long haul

Governments across the region must devise an appropriate combination of urgent measures to shield the most vulnerable from food price increases and strategic actions to ensure the food supply is strengthened and maintained in the coming years.

Four key actions can be taken to improve food security:

1. Protect the most vulnerable.

With food prices surging, many families are facing grave affordability and availability crises. These challenges are particularly acute in countries in the Caribbean, Central America, and Andean subregions, where over 30% of households have skipped a meal in the last 30 days. Governments must ensure that all people have access to adequate amounts of healthy and nutritious food.

Here circumstances matter. In countries where food is available and the main barrier to access is high cost, well-targeted cash transfer programs may be an effective way to help vulnerable households. In countries where food costs are not high but fertilizer and oil prices have been increasing, it is important to ensure continued agriculture investments to maintain food production and productivity while keeping supplies and stocks stable in the short- and medium-terms, into the next harvest.

2. Keep food flowing into markets.

When a global food price crisis like this occurs, policymakers come under pressure to limit further domestic food price rises or to increase the availability of food supplies, for example by changing agriculture trade measures on food imports or exports. These measures almost never work. They usually do more harm than good by disrupting the price signals needed to make food markets work efficiently. Policymakers must ensure that regional and international agricultural and food markets remain open, so that trade keeps flowing and farmers receive the right incentives to produce more for the next harvest.

3. Keep farmers producing today.

Since demand for food is relatively fixed, increasing supply is the best way to ease pressure on high food prices. Most food consumed in LAC is produced within the region, so a key to resolving the crisis is to bolster the next harvest.

High food prices provide incentives to increase production, but those income increases are being cancelled out as operating prices rise. Governments can keep small farmers producing by ensuring that they have access to inputs such as seeds and fertilizers, eliminating or reducing trade restrictions where they do exist and facilitating access to the financing necessary for absorbing higher production costs and taking advantage of market opportunities.

4. Invest in green, resilient and inclusive food systems.

The global food price crisis has exposed vulnerabilities in the region’s food systems. Policymakers now face the challenge of mobilizing the political support and investments required to build, for the medium- and long-term, agri-food systems that are productive, resilient, sustainable and inclusive. While the current crisis is exacting painful costs, by refocusing attention on the need to avoid future crises, it is possible build consensus on reforms that will help green our agri-food systems.

Short-term actions, long-term consequences

It is critical that, despite the immediate hardship of the global food crisis, we do not take our eyes off the long-term goal of transforming LAC’s food systems so that they can become more resilient and contribute to the economy, the environment and human health — both regionally and worldwide.

Between 2019 and 2021, the World Bank provided significant support for food systems in LAC: about $300 million annually for agricultural development programmes and another $1.5 billion annually for social protection programmes.

The World Bank stands ready now to help countries implement emergency measures to respond to immediate needs stemming from the global food price crisis and make investments that will build longer-term food secuirty and resilience.

Transformed food systems in Latin America and the Caribbean can become a cornerstone of green, resilient and inclusive development, advancing the health of people, the region’s economies and the entire planet.

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