Ukraine’s grain deal halt and how to truly help developing countries - OPED


The grain deal between Ukraine and Russia has been cancelled, which is bad news. Yet it did not help the very poor countries in particular, Nout van der Vaart of Oxfam Novib thinks.

Blog by Nout van der Vaart, Oxfam Climate Policy Lead
Published: 2nd August 2023

The termination of the grain deal between Ukraine and Russia is mostly portrayed as hurting poorer countries. However, United Nations figures on the grain deal show that only 2.5 percent of the grain was destined for countries like Somalia, Ethiopia, Sudan, Yemen and Afghanistan, countries ravaged by conflict and climate change. Slightly more prosperous countries such as Kenya, Egypt, Tunisia and Bangladesh received 17 percent. Europe and China got most of the cake. The question is to what extent the grain deal has really improved the availability and affordability of food in the world's poorest countries, and in reducing hunger. As it turns out, while nearly 800 million people worldwide still go to bed hungry every day, the reach of the grain deal has been limited. Food-deficit countries ultimately benefit more from supporting small farmers and developing local food markets.

Even worse off

To be clear, the interruption of Ukrainian grain exports is indeed bad news. Without the 725,000 tons of grain, which is about 2 percent of the 33 million tons of total exports, that the World Food Program shipped out of Ukraine last year, the poorest countries would be even worse off. However, the 53,500 tons received by Somalia and the 95,000 tons for Sudan (0.16 and 0.28 percent of the total, respectively) are in stark contrast to the amount of grain received by countries like the Netherlands and Spain (1.95 and 6 million tons, respectively) for example, grain that was destined primarily for the European feed industry. The termination of the grain deal is thus bad news for European consumers of meat and dairy rather than for hungry East Africans. This raises two pressing questions. First, how come that after a year, so little of the exported food has reached the places of greatest need, despite earlier UN promises?

The answer is that food destined for the world market, even before it has been planted and harvested, has already been traded and sold to the highest bidder. Poorer countries and the United Nations World Food Program may join the back of the queue. In addition, emergency relief agencies like the World Food Program are desperately short of funds to meet the growing need, the greater demand for food. Rich donor countries like the Netherlands should provide funding much more generously to address acute hunger. The option exists to give the World Food Program a preferential position in the international grain market during acute famines, but that would require global coordination, which does not seem very realistic given the political reluctance of rich countries in particular.

Local crops

The second pressing question is: how can developing countries effectively combat and prevent hunger? By protecting and strengthening local food production and processing in these countries, reducing dependence on food imports, and increasing farmers' adaptability to climate change. For example, Senegal is already successfully experimenting with baking bread with locally grown, thriving crops such as millet and sorghum. These are replacing imported wheat. Through development cooperation and other investments, the Netherlands can accelerate the development of local food markets in African countries. This will enable local farmers to adapt their own seeds faster to a changing climate and thus continue to provide food for themselves, their communities and to the local market.

To stimulate further growth of local food markets, it is also important to encourage developing countries to protect their own markets - wherever possible and desirable - from cheap imports from outside. The Netherlands can also take steps in this regard: the import of cheap Dutch and European milk powder has been undermining local market development in Nigeria and Kenya for years.

Fragile system

In short, although the grain deal has had a somewhat dampening effect on global food prices over the past year, with a small portion reaching the poorest countries, it has in the end not sufficiently benefited these countries and communities. Global hunger, poverty and inequality have not abated; conflict and climate change have further strained the capacity of relief agencies. While diplomats must remain fully engaged in the coming weeks to get Ukrainian grain exports back on track, we must face the fragility of the current system, in which only a limited number of countries produce the bulk of global food. To effectively combat hunger, food-scarce countries in Africa, Asia and Latin America must, with the help of the international community, more explicitly commit to scaling up local and regional food production and processing. The Netherlands, a donor country renowned for its agricultural expertise, should take the lead in this effort.