Food prices started rising long before Russia’s military operation in Ukraine, a senior Russian official says
The looming global food crisis that could result from skyrocketing food prices was enabled by a series of policy mistakes by Washington and Brussels in recent years, Maksim Oreshkin told RT.
The conflict in Ukraine alone could not have caused the crisis on such a massive scale, Oreshkin, the economic adviser to Russian President Vladimir Putin, said on Thursday.
The international food price index calculated by the UN Food and Agriculture Organization shows that between April 2020 and April 2022, global food prices rose by more than 60%, or 60 index points. The increase occurred for the most part before February 2022, when Russia launched its military operation in Ukraine.
Between 2020 and 2021, during the first year of the Covid-19 pandemic, the index grew by a whopping 27 points – from 98.1 to 125.7. In the previous four years, between 2016 and 2020, it grew by less than 7 points – from 91.9 to 98.1. In the second year of the pandemic, prices continued to rise, and in February 2022, the index stood at 141.1 points. The period since the start of Russia’s military operation saw the index grow by a further 17 points, amounting to around 12% of the overall rise in food prices over the two-year period.
“Swings like that, with such huge increases in prices, are not happening due to one reason. It’s always a combination of a number of reasons which is leading to such a result,” Oreshkin, who served as Russia’s economic development minister between 2016 and 2020, said.
According to the presidential aide, America’s overreaction to the Covid-19 pandemic was one of the first major factors that triggered the food price hikes. The US “increased the money supply by almost 40%” since February 2020, he said, adding that the $6 trillion the US printed to support its economy ended up flooding the markets around the world, and led to the rise in not only food prices, but commodity and energy prices as well.
Another reason for the crisis, according to Oreshkin, is Europe’s overreliance on renewable energy sources, which drew resources away from food production, and the overreliance on short-term gas contracts that led to gas price hikes in late 2021.
In early May, German Economic Cooperation and Development Minister Svenja Schulze said that the focus of some nations on green energy contributed to the food shortage. According to Schulze, up to 4% of biofuel in Germany is made from food and animal feed. “It needs to be reduced to zero, and not just in Germany but potentially internationally,” she told Bild at the time.
Oreshkin said these factors also led to a decrease in fertilizer production, which in turn hit the harvests and drove food prices higher, and the waves of sanctions unleashed by the US and its allies on Moscow after the start of the military operation in Ukraine significantly exacerbated the crisis.
“It’s about a lot of sanctions imposed on the different fertilizer producers in Belarus, in Russia, it’s sanctions on ships, it’s sanctions on payments which halted trade,” he said, adding that Russia and Belarus both want “to export more food … more fertilizers,” but the “sanctions are blocking access to the global market and, of course, limit supply.”
According to Oreshkin, the 20 million tons of wheat supposedly blocked in Ukraine, which has become a hot topic among Western politicians and media, account for a mere 2.5% of global wheat production. He also stated that Russia is prepared to partially substitute the potential losses regarding Ukrainian wheat by exporting 13 million more tons this year than in 2021.
He also pointed to the unequal distribution of food in the world as a root cause. “In reality, there is enough food on this planet,” but developed nations such as the US are simply consuming much more food than the others, he said, adding that people in the US are “consuming more than 50% calories per day more” than people around the world on average.
“They’re printing the money, they’re taking all the food, and of course they are taking the food from those who cannot afford it.”
He added: “if countries like the United States consume less, there will be enough food for everyone.”
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