Food security: Understanding the effects of a centralized global wheat supply

Almost a quarter of the food produced for human consumption is traded globally (D’Odorico P., Carr J.A., Laio F., Ridolfi L., et al.2014), and while global food supply has increased since the 1960’s, food self-sufficiency has not seen remarkable changes (Porkka M., Kummu M., Siebert S., et al. 2013). Around 720 to 811 million people are still considered undernourished despite enough food for human consumption being produced and traded globally (Suweis S., Carr J. A., Maritan, et al.2015).

Since 2014, FAO has seen a rise of 9.5 percent in global undernourishment levels between 2014 and 2019. The global COVID-19 pandemic added an extra 161 million people to the undernourishment ranks in 2020 (FAO, IFAD, UNICEF, WFP and WHO. 2021). Such statistics point to trade as central in solving hunger while also accelerating the achievement of the United Nations (UN) Sustainable Development Goal on ending hunger (FAO, IFAD, UNICEF, WFP and WHO. 2021). Policymakers have suggested a variety of responses ranging from calls to convert more wildlands to arable land, intensifying crop production, or redistributing what is produced through a shift in trading policies. Aiming to redirect exports or emphasize isolation from global markets (Brown M. E., Carr E. R., et al. (2017).

Network analysis of global food trade shows that the world has become more interconnected over the last thirty years (Sartori M. & Schiavo S., et al 2015).  Research shows that trade intensification in itself does not erode food system resilience but that resilience is dependent on network structure (Tu C., Suweis S. & D’Odorico P. 2019). In a similar fashion, global wheat and rice commodity networks have evolved towards becoming less vulnerable over time. As countries have established greater interconnectivity resulting in more trading partners (Fair K. R., Bauch C. T., et al 2017).Nonetheless, the resilience of global food systems sees itself undermined when countries are either super exporters or almost entirely trade dependent importers (Tu C., Suweis S. & D’Odorico P. 2019).

Given the reliance of a majority of countries to meet demand for staples and domestic shortfalls through trade (Puma M. J., Bose S.,et al. 2015), the global food system is vulnerable to both self-propagating risks (i.e. trade restrictions) and global systemic risk such as climate change (Cottrell R. S., Nash K. L., Halpern B. S., et al. 2019).

Therefore, as sensitivity to perturbations has increased, so has food insecurity. Developing countries absorb more of the trade shock as interconnectivity increases and these uneven impacts of trade have great implications in regards to nourishment and hunger.Putting an even greater load on countries that are already struggling to keep consistent food supplies.

A surge in global food insecurity during the recent pandemic due to grain exports restrictions (Osendarp S., et al. 2021)  aggravated by the war between Russia and Ukraine, have sparked an urgent need to assess and address vulnerability within global food and trade networks.

Study

A study carried out by researchers at the University of California, Davis, in conjunction with the International Food Policy Research aimed to analyze how the global grain network influences country-level nourishment, while controlling for per capita land and food production

Results and discussion

Focus on local feed systems

This study calls for a greater emphasis on regional and localised food systems, because well-functioning local food systems more effectively counter shortfalls and disruptions in the larger globalised food system.

Co-author of the study Catherine Brinkley said global grain supplies were now at the forefront of global trade concerns: Food grains – wheat, maize and rice – account for over 50% of human caloric consumption and underpin global food security.

Most influential countries

Researchers used international wheat data to reconstruct the global trade network and identify the most influential countries. They found that countries most central to the global grain trade account for more than half of all wheat exports globally by volume:

• Germany,
• Italy,
• France,
• Turkey,
• Russia,
• United States
• Canada.

This makes the global wheat value chain vulnerable, as a shock to one of these countries is likely to propagate across the globe.

That is the curse of operating with a food system where components, big or small, are all connected, added Brinkley

Greater farming area does not always translate into reduced hunger levels

Researchers found that a greater availability of agricultural land does not necessarily translate into higher levels of local and national nourishment within a country.

One might expect that having lots of farmland would help buffer against hunger. Yet, agriculturally rich areas of the world are often literal battlegrounds for control over resources. Said Brinkley.

Prioritizing economic growth over food security

Food resources are often plugged into the vast globalised food chain with little to no positive impact on communities where the chain started. According to researchers, many times countries tend to undercut their own the food security to leverage their advantage within the international food economy.

Countries in the Global North, with low production capacities control a significant share of that supply chain giving their purchasing power and location adjacent to important wheat trade hubs.

Historically, patterns of wealth accumulation through colonisation and the slave trade are also visible when you look at the global wheat trade. Many European countries with limited agricultural lands find themselves highly central to the global wheat supply chain, reflecting trade agreements and trade patterns that emanated from their colonial past. Raj said.

Conclusions

• Food trade has become an essential component of meeting caloric and nutritional adequacy but has also opened economies up to shocks and extraction of food resources.
• The previous study aimed to  assess how arable land per capita, purchasing power parity, food production and
  trade networks influence country-level nourishment. It was seen that relatively few countries in Europe and North America control the wheat supply chain. The centrality of such countries as opposed to volume of wheat produced or traded, determines their influence in the wheat supply chain network.
• The analysis within this study confirms that trade, and centrality have significant impacts when it comes to determining national nourishment levels.
• For countries with low purchasing power, trade allows improvements in nourishment level but for countries with very high purchasing power, trade is associated with increased hunger outcomes.
• Although it is logical to assume that countries that are central within the global grain trade and have higher purchasing power parity would also have increased nourishment levels, findings from this study support previous literature where it is argued that super-exporter countries tend to undercut the food security of their own people as they become heavily engaged in trade through extractive models that aim to achieve comparative advantages in
  the economic system over the food system.
• Although the importance of centrality in the global wheat network  and its effects on nourishment were assessed within this study, researchers believe that there are still knowledge gaps regarding what
  strengthens or erodes food systems’ resilience. Future research must evaluate how local food system measures and local food system dynamics may affect global food systems.

Source: Abstract taken from “Connected and extracted: Understanding how centrality in the global wheat supply chain affects global hunger using a network approach.”