The global safety net against hunger is frailer than you think

How has the world managed to double its population over the past 50 years while still keeping most of us fed? Much of it is down to globalization. 

In past centuries, crop failures in one region would inevitably lead to starvation. The 70% fall in ocean freight costs between 1840 and 1910 changed this, sparking the growth of a global trade in grains. About a quarter of all the calories we consume are now traded across borders. 

That's added an important safety net to the world's food systems. Thanks to the way major climate cycles shift rainfall from continent to continent, it's common for crop failures in one region to be paired with bumper harvests elsewhere in the world. The La Nina climate cycle tends to reduce soybean and corn yields in the Americas, but increase them in Asia. During the converse El Nino cycle, wheat production falls in Australia and the US, but increases in Russia and China, while rice does better in Bengal and Indonesia but worse in China and mainland Southeast Asia. So long as food-dependent nations have the foreign exchange to pay for imported nutrition, those effects should cancel each other out and avert hunger.

Years of Plenty

More than half of the area dedicated to growing key crops is in a handful of countries

This may have lulled us into a false sense of security. For all the sophistication of the global trade in calories, we're still overwhelmingly dependent on half-a-dozen breadbaskets to feed ourselves — the US Midwest, South America, western Europe, the former Soviet Union, the Indo-Gangetic plain, and eastern China. If freak weather conditions knock out two at once, we're more dependent on the others, plus stocks from previous years, to keep ourselves fed. Throw politics into the mix, and the margin of safety gets even narrower.

That's the situation the world is in at present. India last week said it would restrict exports of wheat to manage its own food security after a punishing pre-monsoon heatwave damaged the winter harvest. The world had been counting on Indian grain after the war in Ukraine, drought in Argentina and floods in Australia cut production from those countries. China, the world's biggest producer and consumer of wheat, has been aggressively building up its own stockpiles as its relations with food-exporting nations fray. Prices for spring red wheat in Chicago already hit a 14-year high in March, and are making a fresh play for a record. If it wasn't for a solid harvest in North America and the fact that Russian crops are still unaffected by international sanctions, the situation would be grimmer than it already is.

Thing may get even worse. The expectation that a dearth in one food basket would always be counterbalanced with surfeits in other ones had seemed trustworthy — after all, crop failures are normally a result of drought, and all that lost rainfall typically ends up somewhere else in the world. Unfortunately, a changing climate shifts those expectations. If rain gets too excessive, it can cause problems of its own, drowning crops and washing away seedlings — precisely the situation now being seen in Australia, one of the world's major wheat exporters. A warmer atmosphere can hold more moisture, making such crop-destroying flood events even more likely.

We've seen instances of this already. In 2010, the same climate system led to heatwaves and drought in Russia and floods in Pakistan, squeezing two of the world's major wheat belts at the same time and contributing to the rising food prices that helped spark the Arab Spring uprisings toward the end of that year. So-called "multiple breadbasket failures" are likely to become sharply more likely at higher levels of global warming. At 2 degrees of warming, the risk that five of the world's corn-producing regions fail simultaneously goes from a once-in-16-years to a once-in-two-years event, according to one 2019 study.

More With Less

World ending stocks of major grains are likely to fall to their lowest level since 2016

Politics risks acting as an accelerant. Once one country embargoes its agricultural exports because of fears about food security, the odds that its trading partners do the same rise markedly, taking additional food baskets out of the global supply chain. New Delhi's wheat export ban follows hot on the heels of Indonesia last month embargoing its own exports of palm oil. India is the biggest importer of the vegetable fat, and the roughly four million metric tons a year it buys from Indonesia is enough to provide about 6% of calories for its adult population. Geopolitical tensions are already weakening the ties linking Russia, China and Ukraine to the global food system.

The current cycle may get worse before it gets better. The risk of crop losses can be spread across time as well as geographies, by drawing down on stockpiles built up in fatter years to make it through a lean period. That doesn't work so well when climate cycles get "stuck," however. The current La Nina phase now appears to be heading into its third consecutive year, an unusual event that means inventories run down in previous seasons aren't getting the opportunity to replenish themselves as they'd normally do. 

Humanity's increasing skill in keeping hunger at bay despite a booming population counts as one of our greatest achievements — but it rests on worryingly unstable foundations. Current food price rises should be a warning sign. To survive the next century, the whole planet will need to work together.

David Fickling is a Bloomberg Opinion columnist covering energy and commodities. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times. @davidfickling

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement.