News

12 Apr 2021

One year ago, the World Health Organization declared COVID-19 a global pandemic. With about 130 million infections to date, and a death toll that is fast approaching 3 million people, there is little cause for celebrations. While the health crisis will hopefully subside soon, the socio-economic consequences rippling through communities across the world will be felt for years to come. All this against the backdrop of an already grim outlook for almost a quarter of the world’s population who live in places affected by humanitarian crises and conflicts.

The severity of the socio-economic fallout of the pandemic calls for urgent action, including ways to minimize any adverse impacts of COVID-19 on international food markets and global food security. What lessons from the past can help us better cope with the current situation? What experiences can be drawn from the last major meltdown of the world economy, namely the period of 2007-2009 that is now known as the Great Recession, as well as the global food price crisis that followed?

Surging international food prices and growing uncertainties surrounding global food supplies ultimately led to the establishment of AMIS, which will soon reach its ten-year anniversary. However, the initiative's overall approach of sharing information and coordinating action is as timely as ever. While today’s stakes are arguably much higher, AMIS does illustrate how a global crisis can be addressed successfully.

One lesson learned from the AMIS experience is that global problems must be resolved through collective efforts involving all actors concerned. The merits of genuine international collaboration has clearly been demonstrated in the development of a COVID-19 vaccine at record speed. By recognizing that we are all in this together, and that we can only advance united, scientists around the globe shared their data and findings for a common objective: win the fight against the coronavirus. 

While still a work in progress, collaboration, openness and information sharing continue to be at the heart of AMIS. The current crisis calls for even more vigorous efforts to work together for a common goal, and these efforts will only succeed if they are built on transparency and trust.

 

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24 Feb 2021

After decades of progress, hunger has been on the rise in recent years. Amidst a growing number of conflicts, accelerating climate change and economic slowdowns the number of chronically undernourished in the world climbed to almost 690 million in 2019, 60 million more than five years earlier. 135 million people faced acute hunger by the end of 2019 – compared to 80 million in 2015.

The COVID-19 pandemic has exacerbated this already alarming situation. It has thrown the global economy in turmoil, the likes of which have not been seen since the Second World War. Poorer economies have been particularly affected as they frequently rely on a mix of commodity exports, tourism and remittances – all of which have taken a critical hit. The resulting income loss in these countries risks leaving millions of people without the economic means to buy food. The number of acutely hungry might have reached 270 million as a result of the pandemic while chronic hunger is estimated to have increased by up to 132 million.

To make matters worse, the crisis hit at a time when external debt of low- and middle-income countries had surpassed a record USD 8 trillion; and almost half of low-income countries were already in debt distress or at high risk of it. This not only makes it difficult for them to safeguard lives and livelihoods today, but also to make the necessary investments to set their economies on a prosperous path for tomorrow.

Insufficient access to food will likely remain an important factor that could further undermine food security in the future. 20 million young people will enter Sub-Saharan Africa’s workforce every year for the next two decades, while the region only created about 9 million jobs annually since 2000, during a period of relatively robust economic growth. Moreover, will the world’s 3.6 billion people without reliable internet access be able to benefit from the growing digitization in the world of work? Or will those farthest behind be amongst the 800 million people estimated to lose their jobs to automation by 2030? How will the world’s two billion informal workers cope with the transitions ahead?

In this context, stable food prices will be important to maintain adquate access to food. Yet, FAO’s Food Price Index started surging in the second half of 2020, and now stands at values not seen since July 2014. The IGC’s Grains and Oilseeds Index steeply rose year-on-year: nearly 20 percent for rice and wheat, 44 percent for maize and 52 percent for soybeans. Given recent trade restrictions by major exporters, upward pressure on prices is unlikely to recede

Rising prices in international markets will make it difficult for countries to pay their food import bills. However, it is not yet clear which countries will be most at risk to see food security deteriorate. One key aspect to analyze further will be the degree to which future price increases might transmit to markets serving the marginally food secure.

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07 Dec 2020

Early in the COVID-19 outbreak, there were concerns that the health crisis would develop into a large-scale food crisis similar to the 2007-08 food price crisis, when panic buying and counterproductive policies exacerbated initial supply disruptions. While food supply chains have seen disruptions, and there are future risks that require attention, a food price crisis has been avoided so far, in part thanks to improved transparency in global staple crop markets.

A recently published OECD policy brief discusses the importance of transparency and the different requirements for effective information-sharing, using the example of the Agricultural Market Information System (AMIS). The key messages in this policy brief are:

  • Transparency on market conditions and policies in food and agriculture markets can help reduce market uncertainty, expose bottlenecks and highlight risks. This is essential to avoid panic buying or counterproductive policy responses, and to allow market participants and policymakers to develop more effective responses in times of crisis.
  • Transparency is an essential underpinning of well-functioning global markets able to provide a resilient supply of affordable food.
  • Transparency is not automatic: it requires investments in gathering comparable information, monitoring market and policy developments, and communicating clearly about the findings.
  • The Agricultural Market Information System (AMIS), a G20 initiative created in response to the 2007-08 food price crisis, plays an important role in supporting transparency for the world’s major staple crops (wheat, maize, rice, and soybeans). Thanks to consistent reporting and monitoring on market indicators and policy decisions, AMIS monitors market conditions and identifies where bottlenecks and risks are emerging, helping policy makers to identify priorities for early attention and policy responses.
  • During extreme situations as the COVID-19 outbreak, market conditions change quickly, and increasing the frequency of monitoring and reporting is necessary to support informed decision-making. This is more easily achieved where there is an existing infrastructure to build on or scale up, underscoring the importance of investing upfront in the necessary mechanisms and institutions. Timely information to underpin decision-making in times of crisis depends on the investments made in calmer times.
  • With risks to food security continuing to accumulate, efforts to increase transparency need to continue across the entire agro-food sector to avoid or minimise the risks of global food crises, now and in the future.
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01 Dec 2020

The Italian G20 Presidency started today, 1 December 2020. Over the course of a year, Italy will host a large number of institutional meetings and special events dedicated to the major issues of the global agenda, which will rotate around three pillars: People, Planet and Prosperity.

The G20 has assumed an increasingly important role in addressing global challenges. Its membership accounts for 60% of the world’s population, more than 80% of global GDP and about 75% of international trade.

The Secretariat of AMIS, which was launched by G20 Agriculture Ministers in 2011, looks forward to continuing its collaboration with the G20, and to serving the Group with timely, reliable and accurate food market information.

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06 Nov 2020

The structure of the international trading system has undergone fundamental changes, with a recent shift from global approaches to more restricted or geographically limited trading regimes. Despite these changes, the agricultural sector has demonstrated an astonishing capacity to adapt to evolving national and global policies, allowing it to thrive.

The exponential growth of agricultural trade over the last 25 years demonstrates that restrictive trade interventions such as tariffs, quotas, taxes and bans have been largely ineffective: In most cases, they proved temporary phenomena that were eventually countered by supply chain adjustments and arbitrage by the major market players.

For example, productivity increases in the Black Sea region have transformed a former net importer to the largest exporter of grains over the past three decades. Brazil – a contra seasonal supplier – continued to increase acreage yearly, now surpassing the US to become the largest exporter of maize and soybeans. Even with many countries providing sizable subsidies and other market distorting measures as part and parcel of a national safety-net mechanism, most policies since the 1990s have tended to decouple support levels from commodity prices. This has increasingly allowed the global forces of supply and demand to determine prices, hence allowing agricultural markets to maintain a generally healthy equilibrium.

Trade tensions and market interventions have resurfaced again since 2018, largely fuelled by the US initiative to reduce its reliance on imports of industrial and finished goods, most notably from China that expanded the conflict also to agricultural markets. However, trade escalations began to ease with the signing of the bilateral Phase One Trade agreement (2019) while the US pledged to realign its interests, particularly by using bilateral trade pacts with several countries and regions, challenging the long-fought establishment of multilateralism.

Although not completely inured to a bout of unilateralism and protectionism, the agricultural sector, building on multiple resiliencies over the years, has demonstrated its capacity to remain largely insulated from major disruption, including trade escalations. Elevated awareness, much in line with the main goal of AMIS, and instantaneous price signalling, have helped maintain global food supply chains intact, even during the current pandemic of COVID-19. In fact, trade in grains and oilseeds has continued to expand over the past couple of months, contrary to massive contractions confronting non-agricultural sectors.

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