May 12, 2022
WASHINGTON – During a Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs hearing yesterday, U.S. Senator Roy Blunt (Mo.) questioned World Food Programme Executive Director David Beasley, African Development Bank President Akinwumi Adesina, and Mercy Corps CEO Tjada D’Oyen McKenna about the impact of Vladimir Putin’s brutal invasion of Ukraine on global food supply and food prices. Blunt also discussed the importance of expanding agricultural production in Africa to help alleviate price increases and food shortages. Russia and Ukraine produce about 25% of global wheat exports, 75% of sunflower oil exports, and 15% of corn exports.
Following is a Transcript:
On Russia’s Attacks Against Ukraine’s Shipping Routes for Food Exports:
BLUNT: Thanks to all three of you for being here. 10 years or so ago, when I started talking about the demographic impact on food, which is highly predictable, and the doubling of world food need in a relatively short period of time, and I was talking to somebody who runs one of our big agricultural companies. And I said, 'How can we do this?' And his answer is, 'Yes, we can do it. But we can't do it without science, and we can't do it without Africa.' That that incredible population growth in Africa that—what all three of you are saying—the importance of Africa producing more of its own food, and us helping figure out how to do that, is critical. I do think, at this moment, this immediate $5 billion, frankly, is going to go pretty fast, and go fast to meet the crisis need. Governor, you said you've bought a lot of—Governor Beasley, you buy a lot of food from Ukraine. What happens as the Russians move across southern Ukraine? They've almost destroyed Mariupol, if not probably the port at Mariupol. I don't know. But they're now focusing on Odessa. What happens, one, to the rest of the world if those ports are not operational for some period of time? And then, two, what do you think happens to Ukraine and the food they maybe would be able to still continue to grow if those ports aren't available to them or to anybody else, perhaps?
BEASLEY: I guess you could actually say goodbye to Ukraine if you don't get those ports open because the economy collapses. Forty or more percent of their GDP is based upon agricultural products that are exported through those ports. So it's critical. And then you talk about the impact that it will have on global food security, famines around the world, pricing that we're already seeing spiking. And so, over the next 8 to 12 months, you'll see continued pricing spikes. And here's what's very frightening, when you look at Arab Spring in 2011-2012, the economic indicators now are worse than they were in Arab Spring because we see food pricing and what it leads to, from migration to riots to protests and destabilization. Just in the past few weeks, you've seen Sri Lanka, Indonesia, Pakistan, Peru. In the last few months, you saw Chad, of course, and Burkina Faso and Mali. And so it will only get worse in these places if food prices continue to spike. And they will because you don't have the availability of 400 million—Ukraine feeds 400 million people with the food. So if that's out of the equation, where's that going to come from? You can't make that up that fast, so it creates tremendous market volatility. And then you compound that with the fertilizer problem. Like Ethiopia and Sudan, 85% of their fertilizer comes from Russia, Belarus. And they are already in very, very fragile states. That's just two, and I can go from country to country.
BLUNT: But without those ports, could Ukraine, even if it could grow the food, how would they get the food—how would you get the food out of Ukraine?
BEASLEY: You can't. You can't get enough food out. To try to truck it out, for example, when an average day at the port is 3,000, give or take, train carloads per day, and the average train carload is three to four trucks. So do the math. That would be at least 10,000 trucks per day, and it's not a one-day trip. It's several days. So you could talk about four to five days worth of trucking operations, 50,000 trucks. What we have, in sitting down with the Ukrainian government, a best case scenario is you could truck and train out about a 1 million metric tons a month. Now the problem with that, and that's not much compared to how much they produce. It's a drop in the bucket. But the problem with that is pricing spikes with that because the cost of transportation will move it up to $120 more per ton, which prices it out of the market.
On Expediting Food Aid to Countries Impacted by Shortages:
BLUNT: Right. Alright. Let me ask one more question here. You said—and I think Ms. McKenna has also said—we'd need to move fast. What can we do to speed up our efforts through you, through USAID? Are there tools we can better use to get this done quicker? And I want to go next to Ms. McKenna and ask her if the NGOs have the capacity to do more if we'll work in a better way. But, David, do you want to answer that?
BEASLEY: Yeah, I do. I think there are several things. I think, first and foremost, I think encouragement to USAID from the Senate and the House to move these funds quickly. I think there are a lot of pressures. You got lawyers, and all the bureaucracy, and I think as much encouragement as we can do down to USAID, that would be very important. Number two, in the past, we have mechanisms that we can put in place, that we have in place ready to move quickly. Funds, I mean, cash-based transfer, we can move just like that. IRA accounts in major tranches for regional areas of the world, we can move these funds very quickly. We have the capacity to handle such, and then we can move funds with our partners as quickly as possible. But I think it's going to take a lot of encouragement down the street.
BLUNT: Ms. McKenna?
MCKENNA: Yes, thank you for that question. We would encourage USAID to really work with NGOs to move quickly, obviously. But also really leveraging NGOs and leveraging existing relationships they have to do things like creating cash consortiums that can be used in multiple markets around the world, like Yemen or Syria, to kind of support local markets while also supporting food production and other things. So we saw them able to do that a bit with COVID, being able to top up existing awards to support that. And we would encourage them to look at that again.
On Increasing Food Production in Africa:
BLUNT: Well, from the African bank point of view, what are we, again, the key points to, one, get food out quickly, and, two, to encourage more production?
ADESINA: Thank you very much, Senator. Back to your points you were saying earlier on was an excellent point on the importance of R&D, science matters. And I just want to make two examples of that. One is, in Africa today, we have actually supported what is called the Water Efficient Maize for Africa, which is very, very drought-tolerant based variety. And, interestingly, I was, at that time, an Associate Director at the Rockefeller Foundation, and I was based in Zimbabwe when we actually supported the Global Center for Wheat and Maize Summit, based in Mexico, to develop those varieties. And those varieties worked. When we had drought in eastern southern Africa in 2018-2019, the African Development Bank, through this program that I mentioned to you called Technologies for African Agricultural Transformation, we actually got those Water Efficient Maize varieties out to 5.2 million households. And that's why we were able to avoid a food crisis there. The second one is about wheat. As we all know, wheat is a temperate crop. But, with technology right now, we actually have heat-tolerant wheat varieties. And the African Development Bank was able to provide, the case that Beasley was talking about, the case of Sudan, and also Ethiopia. We provided for Ethiopia—I mean, Sudan—65,000 metric tons of certified seed of this heat-tolerant varieties. And that is about the equivalent of one take an Airbus 380—in terms of passenger, cargo, and fuel—we have a 98.2 or so metric tons. So we are talking about almost 665 A380 Airbuses of seed provided for that. And that allowed them to reduce their import of wheat—most of it, of course you know, comes from Russia and all of those places—by 50%. We did the same also for Ethiopia where, today, they were cultivating in 2018, 5,000 hectares of Italian varieties. They've gone to 400,000 hectares of that today. So technology actually does matter. And, in terms of, you know, the issue of getting things out, I think, just to add to what Tjada was saying, and also David, is I think that we should get it to what's working on the ground. Come back to what Senator Graham was saying: produce food in your backyard. You know, and we have TAT, which actually brings together the global R&D centers, the national centers, the regional centers, the private R&D centers to actually get commodities to agricultural value chains all across Africa. So put the monies where it is working on the ground. The plan that we have put forward here, distinguished senators, it's not one we developed in our offices. It's one that's actually developed from the countries, over 40 countries, where we have an impact in them in terms of access to climate-resilient technologies. So one of the things we can do with this money, given also that the U.S. administration is big on climate, as much as we are big on climate, is to make sure that the money is used for food but also wins on climate. So we can win on food, but we also have to win on climate. And R&D is the best way. And we have the best way of getting these technologies out, I will say, is the mobile phones. We can register, we have to register farmers biometrically, give them access to technologies, and give that via their mobile phones, and send them money via mobile phones. That way we make sure that's inclusiveness, in particular that women have to be carried along. I continue to say that because you have to make sure that women participate and benefit from this because they are the majority. I've done this when I was Minister of Agriculture in Nigeria. We got all the farmers registered on mobile phones. We put them on digital databases, and we sent them monies by vouchers on their mobile phones. And I remember walking into one perimeter one day, the farmer told me the woman farmer there said, 'Well, thank you, minister. Now we get seeds and fertilizers in our villages, and the men cannot cheat us anymore.' You got to bring transparency and accountability and inclusiveness to the way in which these forms are deployed for impact.