At the invitation of IICA, representatives of the companies were engaged in a dialogue on the challenges posed by the situation. They agreed that Russia’s invasion of Ukraine had already triggered increases in the prices of agricultural products, fertilizers and energy, demonstrating once again the importance of public policies in support of family farmers, who are the main food suppliers in the region.
San Jose, 12 May 2022 (IICA). – Agrifood enterprises—operating at the global level and with a strong presence in the Americas—agreed on the need to develop joint strategies involving public and private sector efforts to address food security risks arising from the war in Eastern Europe.
At the invitation of the Inter-American Institute for Cooperation on Agriculture (IICA), representatives of the companies were engaged in a dialogue on the challenges posed by the situation. They agreed that Russia’s invasion of Ukraine had already triggered increases in the prices of agricultural products, fertilizers and energy, demonstrating once again the importance of public policies in support of family farmers, who are the main food suppliers in the region.
Given that Russia and the Ukraine are important grain producers and that Russia is also a major exporter of energy and fertilizers, the war has led to greater volatility in already struggling global markets, reeling from the combined effects of the COVID-19 pandemic and the increasingly apparent effects of climate change.
Thus, according to IICA Director General, Manuel Otero, in opening the debate, the different crises are feeding off each other, causing Latin America and the Caribbean to lose ground in terms of poverty and food security. This places the region in a difficult situation that it will only be able to overcome after a proper assessment.
Paula Uribe, Director of Public Policy and Government Affairs at PepsiCo and Chairwoman of the Food and Agribusiness Working Group of Americas Business Dialogue, remarked that, “We are talking about external phenomena like the pandemic, climate change and the war in Europe, which are all affecting food security. Thus, we feel it is important that the topic be included in the agenda of the Summit of the Americas, which will take place in Los Angeles. A side event must be organized at the Summit to encourage governments in the region, the private sector and organizations like IICA to make serious commitments with respect to this issue”.
“The invitation by IICA demonstrates the spirit of openness of the organization and its will to cooperate with the private sector”, said Facundo Etchebehere, Vice-President of Global Public Affairs at Danone. Etchebehere expressed the need for the agrifood sector to maintain a strong presence at the next United Nations Climate Change Conference (COP 27), where agriculture should be viewed as part of the solution to global environmental challenges.
José Perdomo, President of CropLife Latin America, stated that one of the region’s greatest forms of capital was the presence of small farmers with the potential to increase their production, if they are given access to science- and technology-based solutions”.
Senior Director of ADM, Matt O’Mara, applauded the role played by IICA in ensuring that agriculture is present at the table in international discussions, stressing that, “In the current situation, Europe and the Americas have to engage more closely to discuss and agree on agricultural policies, sustainability and the climate agenda”.
Fresh Del Monte’s Ronald Romero felt that, in general, agricultural producers, and more so medium- and small-scale farmers, may be find it difficult to effectively pass on cost increases to the rest of the food supply chain, which may eventually affect their ability to maintain levels of production and could slow down investment in sustainable development and research.
“We are fixated on continuously increasing our production, but the fact is that there is an extremely high degree of food wastage throughout the supply chain, and that cannot continue”, insisted Ricardo Coto, Global Director of Fresh Foods at PriceSmart.
Servando Valdez, another PepsiCo representative, stated that companies “have the responsibility and resources to support our farmers, through the signing of annual contracts as an assurance that their products will be bought and by providing innovation and technology systems to assist them during these times of crisis. The entire private sector and governments must also coordinate efforts to assist small and medium-scale farmers with marketing and productivity strategies, since they are the ones facing the most daunting challenges”.
“We have observed that these farmers are going to reduce the amount of inputs they use in production, which will logically lead to a decline in output”, said Carlos Torres, Sygenta’s Regional Director for Central America and the Caribbean. This is a troubling situation for strategic crops in the region, such as corn, rice and beans, which will increase in price and in turn generate more poverty.
Similarly, Martín Zúñiga, Director for Central America and the Caribbean at CropLife, anticipated that the crisis could worsen. He said that, “Currently, the problem is not food availability, it’s prices. Countries will have to make a fiscal effort to help families that will be not able to purchase food. They will have to help farmers that are facing cost-related issues. If not, the problem will no longer be a price issue, but a relative food shortage”.
On the other hand, President of DSM Latin America, Mauricio Adade warned that complications arising from the current situation should in no way cause countries to think of putting environmental priorities on the back burner. “We are already several years behind”, he said.
Manuel Otero presented some data that reflects the direct impact of the Eastern European crisis on regional agricultural production and exports and he referred to fertilizer prices as the Achilles heel of many countries of the Americas.
For example, Brazil imports 85% of its fertilizer from Russia and Belarus. Russia is the primary market for frozen beef exports from Paraguay and Colombia and also accounts for 20% of Ecuador’s banana sales. Moreover, food commodity price increases are having a major impact on vulnerable countries such as Haiti and the Eastern Caribbean countries.
The IICA Director General recalled that last March, just a few days before the Ukraine invasion, the Institute had launched its Observatory of Public Policies for Agrifood Systems (OPSAa), which has proven to be an important tool to assist countries to navigate this period of uncertainty and instability.
Finally, Otero said that “Food security is the top priority in the global agenda, as the world’s leaders have already confirmed. We must be clear that agriculture, in addition to supplying food and generating foreign exchange and employment, is above all, an instrument for peace. The region of the Americas is a guarantor of the world’s food and nutritional security and global environmental sustainability. This time of crisis provides us with the opportunity to strengthen our efforts to bring about sustainable production”.
More information:
Institutional Communication Division.
comunicacion.institucional@iica.int
