Recent restrictions on rice exports by India prompt this analysis of the on the ground conditions of global food insecurity, returning to some of the themes we explored in The Future of Food (In)Security and Agriculture Cybersecurity: Grain Hoarding, Rice Shortages and the War in Ukraine.  In 2024, we are on the lookout for technological and geopolitical convergences.  Global rice supplies and fertilizer access in war torn countries are just such a convergence. 

World’s Poor Face Even Pricier Rice If India Extends Export Curbs

“Rice-importing countries in sub-Saharan Africa have felt the greatest impacts, scrambling to find alternative sources…”

From Bloomberg last week:   India’s restrictions on rice exports have already sent ripples around the world. Those curbs may now be extended, threatening to keep food inflation in many countries higher for longer.  The world’s top shipper started restricting sales of key varieties last year to help keep local food prices in check ahead of national elections.  The impact of existing measures is evident in the high cost of the staple that’s vital to the diets of billions of people in Asia and Africa — home to some of the world’s poorest countries.  Benchmark Asian prices are near a 15-year high. India’s exports of the grain to its major markets have slumped from usual levels, especially in sub-Saharan Africa, according to recent analysis from the International Food Policy Research Institute.

For example, in the four months through November, India’s exports to West Africa slid some 54% from a year earlier. Shipments to East Africa and Central Africa dropped 58% and 80%, respectively, the Washington-based IFPRI said in a note.  “Rice-importing countries in sub-Saharan Africa have felt the greatest impacts, scrambling to find alternative sources,” said the note’s authors Joe Glauber and Abdullah Mamun.

About half of the global population relies on rice for daily diets. The key question now is how long India’s export curbs will remain in place. If exports continue at their current sluggish pace beyond India’s elections in the coming months, it will likely result in higher prices and more pressure on rice-importing nations, the IFPRI warns.

India’s Strained Farmlands Are a Threat to Global Food Supply

“…restrictions have tempered cost increases at home, but they’ve hurt vulnerable importing nations, pushing the global price to a 15-year high and raising the possibility of social unrest in reliant regions such as Africa.”

Back in November, Bloomberg provided a detailed report of the on the ground conditions in India  India’s farm sector is fraying. That’s bad news for its 1.4 billion people, for tens of millions of cultivators, for a government seeking reelection — and for global food supplies.  The world’s most populous nation is today a leading producer of rice, wheat, milk, sugar and more. But its agricultural sector still leans heavily on ill-equipped smallholders. Farm plots have been shrinking for decades, infrastructure remains rickety and climate change is only bringing more disruption.

The South Asian nation still lags China in yields for major crops, even though the government has more than doubled farmer subsidies over roughly the past decade.  The most significant effort to tackle this underperformance, effectively by deregulating internal markets, sparked many months of dramatic demonstrations by farmers in 2020 and 2021 — the worst protests of Prime Minister Narendra Modi’s near decade-long tenure.  The crisis reflected a rushed, poorly handled legislative process but also the tangle created by decades of distorting subsidies.  That’s turning into a growing headache as India — either unable or unwilling to tackle its structural problems — limits exports to curb food inflation and appease the electorate. Farmers and overseas buyers pay the price.

Take rice:

• India’s production has surged over the past decade, accounting for about 40% of worldwide shipments before the latest limits, broadly equivalent to the next four exporters combined.
• Now, restrictions have tempered cost increases at home, but they’ve hurt vulnerable importing nations, pushing the global price to a 15-year high and raising the possibility of social unrest in reliant regions such as Africa.
• Domestic producers again lost out, too.
  • The farming sector — and cultivators’ lives — were transformed by the green revolution that started in the late 1960s. But the industry continues to reflect priorities of that period.
  • Subsidies still focus on the production of staples such as wheat and rice rather than the crops needed for balanced nutrition or that command higher returns for farmers.
  • Too little attention is paid to land degradation, the unsustainable application of fertilizers and pesticides, and an overuse of groundwater.
  • Until India can unpick its subsidies, resolve structural issues like insurance access and invest more significantly in research and development, farming in the country will remain a gamble in which the odds are stacked against cultivators.

Productivity will continue to lag. Governments will turn again to export limits to dampen prices, as they have this year for rice.  Neither India nor the world can afford that.

From the Ground Up: Demining Farmland and Improving Access to Fertilizer to Restore Ukraine’s Agricultural Production

Researchers and experts from the Center for Strategic and International Studies (CSIS) have done great work here:

CSIS and Ukrainian experts examine two aspects of Ukraine’s agricultural recovery that are critical to increasing its food production and exports: demining farmland and restoring farmers’ access to fertilizers.

 A quantitative analysis the introduction to the report:

“In the two decades leading up to Russia’s February 2022 invasion, Ukraine had become a major producer and exporter of numerous agricultural commodities. In the 2020–2021 harvest season—the last season unaffected by Russia’s full-scale invasion—Ukraine was the fifth-largest exporter of wheat, honey, and walnuts worldwide; the third-largest exporter of maize, barley, and rapeseed; and the world’s top exporter of sunflower oil, sunflower meal, and millet.

Due to Russia’s intentional attacks on all aspects of Ukraine’s agriculture sector, and collateral damage from hostilities, Ukraine’s production and exports are diminished today from prewar levels. As of June 2023, the Kyiv School of Economics estimated that Ukraine’s agriculture sector had incurred $8.7 billion in direct damages to agricultural machinery, equipment, and storage facilities, as well as from stolen or damaged agricultural inputs, such as fertilizers and seeds, and outputs, such as crops and livestock. The sector’s $40.3 billion losses represent farmers’ diminished incomes due to foregone production, lower selling prices for products, and higher operational costs across all stages of the agri-food value chain.”

Policy Upshots

Demining Ukraine’s farmland and increasing access to fertilizers are vital to Ukraine’s agricultural recovery—which is necessary to bolster Ukraine’s economy during wartime, restore its capacity as a major global food supplier, and counter the influence Russia wields through its own agricultural exports. 

• The presence, or even the fear, of landmines on agricultural land has affected farmers’ harvests across Ukraine. At the same time, the process of demining farmland could also depress agricultural yields, as some farmers may experience long-term impacts once their land has been demined.
• As Ukraine’s trade relationships with two of the world’s largest fertilizers producers—Russia and Belarus—are now severed, Ukraine’s government and agricultural enterprises are struggling to identify alternative sources to fill the considerable supply gap left by foregone Russian and Belarusian imports.
• As urgent needs—related to agriculture and all sectors affected by the war—occupy the attention of Ukraine and its international partners, they should not lose focus on a resource central to Ukraine’s rise as a global agricultural powerhouse: its black soils.
• Rebuilding Ukraine’s agriculture sector from the ground up must involve identifying the optimal set of soil testing methods for Ukraine’s agricultural soils and scaling up a national infrastructure for such testing within Ukraine in the face of numerous, concurrent challenges imposed by Russia’s war.

For the full CSIS report, go to this link.  

The Fertilizer Institute (TFI):  Fertilizer Market Overview and Challenges

“…a combination of events over the last two years have resulted in fertilizer input cost increases.”

The TFI has made available the one page Executive Summary of the complete text  in response to the U.S. Department of Agriculture’s Request for Information on Competitiveness in the fertilizer industry: 

Issue Summary:  Fertilizer is responsible for 50% of crop yields, hence its critical role in world food security. A confluence of factors has negatively impacted fertilizer markets, which are global. These challenges have constrained supply, shifted trade flows, and increased the cost that farmers pay for this essential crop input.

Issue Background:  Fertilizer is a globally traded commodity that is influenced by global supply and demand factors, as well as domestic conditions. Because fertilizer is resource-dependent, relying for example on natural gas and mineral deposits of potash and phosphate, only about 65 nations have the resources necessary for its production. Competition here at home is significant: the United States is one of only three nations with 20 or more unique producers of fertilizer. We also import many types of fertilizers in significant volumes.  Because the fertilizer industry is globally intertwined   supply disruptions caused by increasing energy prices, foreign trade policies and geopolitical events (Belarus, China, Russia-Ukraine) can affect price and supply conditions in the United States. Consequently, a combination of events over the last two years have resulted in  fertilizer input cost increases. 

Key Factors:  The following key factors are influencing fertilizer markets – 

• Resource dependent: Only about 65 nations have the resources to produce fertilizer.
• Domestic competition: The United States is one of only three nations with 20 or more unique producers of fertilizers.
• Capital intensive: Fertilizer production facilities cost $1 billion to $4 billion to build.
• Global demand: As farmers   increase crop production to capture additional revenue from high or increasing crop prices, additional acreage is brought into production, and this raises the demand for fertilizer.
• Global supply disruptions: Sanctions, export restrictions, and other factors have drastically impacted major global producers and suppliers in Belarus, China, Russia-Ukraine, and much of Europe.
• Production costs: Natural gas accounts for   70% to 90% of total ammonia production costs. Natural gas prices doubled in the United States in 2021.
• Logistical supply chain: Shipping costs have been rising for many years. Poor rail service is also raising costs and further constraining the entire modal supply chain. The vaccine mandate on transporters of essential commerce has also raised costs and constrained supply on the U.S.-Canadian border.

A more detailed overview of the fertilizer business and factors impacting it is available from TFI’s comments responding to the U.S. Department of Agriculture’s (USDA) request for information on “Fertilizer Access.”

What Next?

A better use of fertilizers is needed for global food security and environmental sustainability

A community of scientists and researchers see global fertilizer solutions as the convergence of the challenges of global food security and the ongoing climate crisis.  There perspective is a holistic view of the role of fertilizer will play in the year’s ahead: 

“The massive use of fertilizers during the last decades allowed a great increase in the global capacity of food production. However, in the last years, several studies highlight the inefficiency and country asymmetries in the use of these fertilizers that generated environmental problems, soil nutritional imbalances and not optimal food production. We have aimed to summarize this information and identify and disentangle the key caveats that should be solved. Inadequate global management of fertilization produces areas with serious nutrient deficits in croplands linked with insufficient access to fertilizers that clearly limit food production, and areas that are overfertilized with the consequent problems of environmental pollution affecting human health.

The global population is expected to increase by about 35% over the next 40 years.  Agricultural output will need to increase substantially to accommodate the growing population. Most of the increase (in agricultural output) is expected to be from producing more food on existing farmland (i.e., intensification), although some new farmland will likely be needed.  Such intensification and expansion might, however, lead to undesirable impacts on carbon stocks in soil and vegetation and on biodiversity in the most productive croplands of the world.  

Boosting crop yields and closing the gap between actual and attainable yields can be achieved by implementing and advancing numerous practices and technologies, e.g., the adequate use of fertilizers and efficient nutrient management can play key roles for global food security.  However, the fertilization intensification of the last decades aimed to increase yields has produced some new global environmental and geopolitical problems, such as nutrient imbalances, leaching of nutrients from crops to environment and the associated impacts, and increasing cost of fertilizers with serious geopolitical and economic problems for the food security in poor countries.”

The convergence of biotechnology (“synthetic biology”), global food security, and the climate crisis

We previously featured SynBioBeta and The Global Synthetic Biology Conference.  Recently, SynBioBeta sent out a list of Food & Ag Insights apropos to our analysis here:

“Agriculture is now recognized as a significant driver of climate change. Current food production methods are unsustainable and likely to increase as our global population climbs to 10 billion by 2050. Agriculture must become greener, more innovative, and bountiful to feed more people on an already straining planet. Biotechnology is already boosting crop yields, but more dramatic innovation is still needed.  Synthetic biology (“synbio”) is already improving soil health and nutrients, dramatically reducing the need for harmful fertilizers. Innovations like gene editing create crops that can better adapt to changing conditions like heat waves, drought, and pests. Crops aren’t the only food in need of innovation. Cultured meat and precision fermentation offer significantly more sustainable alternatives to animal protein farming.  This is only the beginning of why “synbio” might enable our food future.”

Developments included in their insights included:

• Aanika Biosciences is Accelerating the Adoption of Synbio Through Insurance: The new business model will help commercialize synthetic biology by insuring new technologies.
• Innovative Enzyme Research Unveils New Paths to Carbon-Neutral Biofuels: A collaborative research effort reveals a groundbreaking method to break down plant cellulose, offering a new horizon in producing renewable biofuels and biomaterials.
• Smart Plants are Coming to a Field Near You This Year: InnerPlant is revolutionizing agriculture with its engineered plants that emit fluorescent signals, which are detectable by satellites, enabling early detection and treatment of fungal infections in crops.
• Synthetic Biology’s Miracle Milk: TurtleTree wants to revolutionize dairy, starting with lactoferrin—a high-value healthy kick…minus the hoof.
• Breaking Tradition: Could Synthetic Biology Shape the Future of Winemaking? The wine industry is well known for its strong heritage, but climate change and evolving tastes might coax us into a new era of synbio wine.

Additional OODA Loop Resources 

New Genetic Frontiers:  There have been groundbreaking advancements in genetic engineering and new medical technologies are poised to disrupt the dialogue on health, ethics, global security, and the future of humanity.   We explored these disruptive technologies at OODAcon 2023, such as the revolutionary CRISPR gene-editing tool, breakthroughs in synthetic biology, and the emergence of exponential medical treatments that demonstrate rapid adoption properties.    In this OODAcon 2023 session, Natalie Barrett, Phaedrus Engineering, Biomedical Engineer, Marc Salit, MITRE Fellow, Synthetic Biology, and Andre Watson, CEO, Ligandal, Biomaterials Scientist, shared the following really actionable and forward thinking insights.

The Future of Blockchain Technology in Synthetic Biology: Synthetic biology is a field that involves the engineering of biological systems to create new organisms or modify existing ones for various applications, such as healthcare, agriculture, and industrial processes. We continue our efforts to understand the risks and opportunities in this exponential industry sector by taking a look at the role blockchain technology will play in synthetic biology, particularly in areas related to data management, security, and collaboration.  This research is also part of our current series on the Future of Blockchain. 

Blockchain Meets Bio: The Recent Synthetic Biology Summit and “Sustainable Biomanufacturing for Future Network States”: In this post, We resume our efforts to understand the risks and opportunities in this exponential industry sector by taking a look at the recent 2023 Global Synthetic Biology Conference and the Synthetic Biology Summit:  “Blockchain Meets Bio” ‍‍ – Sustainable Biomanufacturing for Future Network States. This research also intertwines with our current series on the Future of Blockchain. 

Russian Invasion of Ukraine: Russia’s aggression against Ukraine prompts global repercussions on supply chains and cybersecurity. This act highlights potential threats from nations like China and could shift defense postures, especially in countries like Japan. See: Russia Threat Brief

Food Security and Inflation: Food security is emerging as a major geopolitical concern, with droughts and geopolitical tensions exacerbating the issue. Inflation, directly linked to food security, is spurring political unrest in several countries. See: Food Security

Technology Convergence and Market Disruption: Rapid advancements in technology are changing market dynamics and user expectations. See: Disruptive and Exponential Technologies.

The New Tech Trinity: Artificial Intelligence, BioTech, Quantum Tech: Will make monumental shifts in the world. This new Tech Trinity will redefine our economy, both threaten and fortify our national security, and revolutionize our intelligence community. None of us are ready for this. This convergence requires a deepened commitment to foresight and preparation and planning on a level that is not occurring anywhere. The New Tech Trinity.

The Revolution in Biology: This post provides an overview of key thrusts of the transformation underway in biology and offers seven topics business leaders should consider when updating business strategy to optimize opportunity because of these changes. For more see:  The Executive’s Guide To The Revolution in Biology