The International Panel of Experts on Sustainable Food Systems (IPES-Food) issued a report that sounded the alarm over the world’s food insecurity and debt crisis. The report shows that more than 349 million individuals suffer from severe hunger, and many more are likely to suffer hunger as food prices remain at record highs and many countries cannot pay debts.
In the report ” Breaking the Cycle of Unsustainable Food Systems, Hunger, and Debt,” IPES-Food writes that the COVID-19 virus and Russian invading Ukraine caused a rise in prices for food in the past two years.
“Although there has been some easing of food prices in recent months, it is unpredictable what the fallout from the interplay with the debt crisis will be,” Jennifer Clapp, Canada Research Chair in Global Food Security and Sustainability at the University of Waterloo, Ontario and co-author of the report says to Food Tank. “But we are seeing food price inflation remaining higher than overall inflation, and this is deeply troubling.”
The authors say that middle and low-income economies (LMICs) are at risk from the growing debt crisis. IPES-Food estimates that 60 percent of countries with low incomes and 30 percent of middle-income countries are at risk of defaulting on debt. As per the research, Zambia, Sri Lanka, and Suriname have already defaulted. In addition, other countries like Ghana and Pakistan could also be at risk of defaulting.
The report outlines four crucial ways that food systems that are not sustainable create debt crises for hundreds of LMICs. The countries are in a position of dependence on imports for fertilizers and food, forcings them to depend on cash crops to pay back debts and hindering their ability to diversify their crops. In addition, the decades of detachment from social services and agriculture have exacerbated the problems. As food prices rise and fall, farmers are in a position of no competition to large corporations. The escalating climate crisis is creating more uncertainties, ruining harvests, and increasing farmers’ debt.
In addition, the rising cost of imports of fertilizer and energy is the biggest challenge for producers. According to IPES-Food, Countries already dependent upon foreign assistance will feel the effects of inflation, which extend beyond food items.
The report’s authors offer three policy recommendations to tackle the dual food insecurity crisis and debt burden. They argue that international institutions need to respond to the current needs by increasing development and debt relief investment for countries in need. They also say that they must adopt policies that deal with decades and even centuries of divestment of wealth of Global South states. Procedures include taxing agricultural businesses for price increases and debt repayments based on ecological destruction.
The report also suggests changing current institutions’ structure and forming new financially independent institutions. A radical reform could increase the ability of less developed nations to negotiate debt agreements.
Another option is the introduction of security measures, such as the need for examinations of lending practices between Global North and South countries within existing institutions such as that of the International Monetary Fund or World Bank.
“Any new initiative for climate financing or debt restructuring must not repeat the mistakes of the past, damaging conditionalities and colonial power relations,” Lim Li-Ching from IPES-Food, Chair and Senior Researcher for Third World Network, tells Food Tank.
“And rather than using public money to guarantee private investments, we should rather find ways of repairing historical injustices and return resources to the Global South, while deterring climate destruction in the first place.”
The report recommends democratizing decision-making within global food systems and financial institutions, such as the International Monetary Fund and the World Bank. The report says that achieving diversity in who is seated in the room is an essential aspect of resolving this complicated problem.
“In fulfilling their domestic mandates, big central banks are inadvertently triggering debt distress for countries across the world when they raise interest rates because their actions are raising the costs of servicing debt worldwide,” Clapp says on Food Tank.
IPES-Food asserts that financial institutions with independent status can aid in easing the pressures of international crises instead of sustaining these dependent relationships between wealthy and less developed countries.