Immediate Action to Protect Food Trade

European Market

A‭ ‬U.K‭. ‬think tank has warned governments must take immediate action to mitigate the risk of severe disruption at certain trade‭ ‬“chokepoints”‭ ‬around the world‭, ‬which could have‭ ‬“devastating knock-on effects”‭ ‬for global food security‭.‬

In its report titled‭, Chokepoints and Vulnerabilities in Global Food Trade‭, ‬the Royal Institute of International Affairs Chatham House‭, ‬an independent policy institute based in London‭, ‬said these critical junctures on transport routes through which exceptional volumes of trade pass were coming under increasing pressure as international food trade continued to grow‭.‬

These chokepoints include the Panama Canal‭, ‬the Strait of Gibraltar‭, ‬U.S‭. ‬Gulf Coast ports‭, ‬the Suez Canal and the U.S‭. ‬inland waterways and rail network‭. ‬“Three principal kinds of chokepoint are critical to global food security‭: ‬maritime straits along shipping lanes‭; ‬coastal infrastructure in major crop-exporting regions‭; ‬and inland transport infrastructure in major exporting regions‭,‬”‭ ‬say authors Rob Bailey and Laura Wellesley‭.‬

According to the Royal Institute of International Affairs‭, ‬the top five countries‭ (‬in terms of volume throughput‭) ‬that shipped food products through the Panama Canal en route to Europe in 2015‭ ‬were the United States‭, ‬Canada‭, ‬Mexico‭, ‬Bolivia and Chile‭.‬

“A serious interruption at one or more of these chokepoints could conceivably lead to supply shortfalls and price spikes‭, ‬with systemic consequences that could reach beyond food markets‭. ‬More commonplace disruptions may not in themselves trigger crises‭, ‬but‭ ‬can add to delays‭, ‬spoilage and transport costs‭, ‬constraining market responsiveness and contributing to higher prices and increased volatility‭,‬”‭ ‬say the authors‭.‬

According to the report‭, ‬maritime chokepoints will become increasingly integral to meeting global food supply as population growth‭, ‬shifting dietary preferences‭, ‬bioenergy expansion and slowing improvements in crop yields drive up demand for imported grain‭.‬

In addition‭, ‬rising trade volumes‭, ‬increasing dependence on imports among food-deficit countries‭, ‬under-investment‭, ‬weak governance‭, ‬climate change and emerging disruptive hazards together make chokepoint disruptions increasingly likely‭.‬

Climate change will have a‭ ‬“compounding effect on chokepoint risk‭,‬”‭ ‬the report went on to say‭, ‬increasing the probability of both isolated and multiple concurrent weather-induced disturbances‭.‬

The report also mentions investment in infrastructure lagged behind demand growth‭; ‬critical networks in major crop-producing regions are weak and ageing‭; ‬and extra capacity is urgently needed‭.‬

The Institute recommends chokepoint analysis be integrated into‭ ‬“mainstream risk management and security planning‭.‬”

“For example‭, ‬government agencies should assess exposure and vulnerability to chokepoint risk at the national and subnational levels‭,‬”‭ ‬it said‭.‬

In terms of the risk to these two chokepoints‭, ‬these tend to be climate‭, ‬weather and political/institutional risks rather than security and conflict risks‭. ‬In regards to the Panama Canal‭, ‬the main example of disruption the Institute considered was related‭ ‬to drought and the impact on water levels in the canal‭. ‬For example‭, ‬in March 2016‭, ‬restrictions were imposed on the depth of ships passing through the canal due to low water levels during a particularly strong El Niño event‭. ‬The recent investment in the expansion of the canal should mitigate some of these risks‭.‬

For U.S‭. ‬Inland Waterways and Gulf Coast ports‭, ‬the risks mainly relate to a lack of investment in infrastructure‭. ‬“The U.S‭. ‬inland waterways and ports we focus on are old‭, ‬face congestion and are vulnerable to droughts and storms‭,‬”‭ ‬says the Institute‭.‬

More investment in infrastructure‭, ‬such as by agreeing on guidelines for climate-compatible infrastructure through an international taskforce established under the G20‭, ‬and said confidence and predictability in global trade should be enhanced‭, ‬which could‭ ‬be done through a process under the World Trade Organization‭ (‬WTO‭) ‬to continually reduce the scope for export restrictions is urged‭.‬

Furthermore‭, ‬it recommended emergency supply-sharing arrangements and smarter strategic storage be developed‭. ‬Government has an‭ ‬important role in increasing infrastructure investment‭, ‬diversifying production and cooperating better together‭. ‬These actions should be taken sooner rather than later‭, ‬as any of these policies will take time to take effect‭.‬