Global food crisis can generate conflicts in the world and pressure in Brazil

General Augusto Heleno Ribeiro Pereira, chief minister of the Institutional Security Office, told the Guerra Jogos column that “there are countries that are terrified of Brazil being what it is, as a granary of the world, in terms of of food”. The statement comes at a time when the world is on the brink of a new global food crisis.

On Thursday (4), when the interview was shown on the Gazeta do Povo channel, the Food and Agriculture Organization of the United Nations (FAO) announced that the price of food in January this year reached the highest level since 2011. That year, the rise contributed to the uprisings that toppled the governments of Tunisia, Egypt and Libya and catalyzed other Arab Spring shocks.

The FAO index, which measures agricultural commodity prices, reached 135, 7 points. In the crisis of 2011, when the Arab world was swept by a series of popular revolutions that culminated in the Syrian War, the level reached was 131,9 points.

According to analysts, the popular uprisings of 2020 were not triggered only by the rise in food prices, but by a mixture of problems such as inflation, corruption and unemployment, in addition to geopolitical factors.

The trigger took place in Tunisia, when street vendor Mohamed Bouazizi, from 20 years, he had his fruit cart seized and for that reason he set himself on fire, in front of a government building. Less than a month later, waves of protests toppled President Zine al-Abidine Ben Ali. Then came Hosni Mubarak of Egypt, Muammar Gaddafi of Libya and Ali Abdullah Saleh of Yemen.

In these cases, rising food prices encouraged internal riots and conflicts. But it is almost a consensus among international analysts that scenarios of scarcity of both food and components (such as computer chips) and minerals also have the potential to increase competitiveness between nations.

This global rivalry can lead to economic and health sanctions and barriers, protectionism, diplomatic reprisals, cyber attacks and other aggressive actions below the line of armed conflict. But, although less likely, they also increase the possibility of total war involving nations.

How is Brazil in this geopolitical scenario?

Brazil is the fourth largest grain producer in the world, after the United States, China and India, according to data from 2020 from Embrapa. But Asian countries consume a lot of their production, which makes Brazil the second largest grain exporter in the world (19% of world production), behind only from the USA (20, 6%). Then come Argentina (8%), France (4.5%), Canada (5.2%), Ukraine (8.3%), Russia (8.1%), Australia (3.1%), India (2.1%) and Germany (1.5%).

Brazil also ranks second in meat exports, with 13,4% of the market, behind the US (14,8%).

“There are interests in the world to end this Brazilian production, which makes the world market almost captive to Brazil”, said Minister Heleno.

“So, the countries that have agricultural production, they they want Brazil to collect itself in terms of production. Will not happen. Brazil is destined, even by divine providence, to be the breadbasket of the world”, he said.

Heleno did not say which countries these would be. But he said that the rivals of Brazilians in this field act to portray Brazil as the great “villain” of the environment. They use as arguments crimes that occurred in the Amazon, such as fires, irregular logging, felling of trees to create pastures and illegal mining.

Using these arguments, they try to impose barriers to Brazilian products and, in Ultimately, they can wage a legal war in international forums to try to prevent Brazil from exploiting its resources in the Legal Amazon.

This friction has focused mainly on the field of information warfare, with statements by politicians, debates in the press and academic production by NGOs and Think Tanks.

“We are the country that has preserved the most natural forests to date in humanity and we will fight hard for the preservation, from now on, more and more of the Amazon”, said Heleno.

The minister did not name names, but one of the biggest detractors of the Brazilian government on the environmental issue was French President Emmanuel Macron. The American John Kerry, Joe Biden’s special climate envoy, also criticized Brazilian environmental policy.

Analysts claim that French pressure against Brazil would occur to prevent the conclusion of the free trade agreement between the European Union and Mercosur. The objective would be to protect the French agricultural sector.

The United States, on the other hand, is losing market share to Brazil in corn exports and competes for the Chinese market for the sale of soybeans, according to a report by the US Department of Agriculture. United States.

The world is heading towards a scarcity scenario

Analysts fear that the world is entering a new global food crisis, which could result in scenarios of hunger in poorer countries and high food prices in more developed and developing nations.

This scenario began to take shape last year, from a combination of factors. Most of them are related to climatic factors, such as droughts and floods, and disruptions in global production chains caused by the Covid pandemic-13.

The vaccination of populations in 2021 led to the end of lockdown policies and an economic recovery. But the reduction in the traffic of goods has diminished the capacity of maritime transport. The value of freight rose and high value-added products were given preference in transport – while food was in the background.

In addition, oil production had been reduced by the countries of the Organization of Exporting Countries of Oil (OPEC) and not fully resumed.

In parallel, there was a rise in coal prices in China that made the value of natural gas rise in Europe as well. There was also a global attempt to replace fossil fuels with clean energy.

The rise in oil also impacted transport and increased inflation globally. This “perfect storm” threw the world into a serious energy crisis.

The rise in the price of natural gas is particularly important in the food crisis issue, because it is used in the production of some types of fertilizers . Factories had to close, as the gas was directed to heating homes in Europe.

There were also US sanctions against Belarus, one of the largest producers of potassium-based fertilizers in the world. Allied to the stoppage of factories in the United States due to hurricanes, these factors started a global shortage of agricultural inputs – including fertilizers and pesticides. Producer countries decided to stop exporting to preserve their domestic markets.

Brazil holds only 2% of the world’s fertilizer production, according to a report by consultancy Cogo. The lack of inputs should impact the off-season corn and winter crops, which are being planted at the beginning of this year.

With higher production costs due to the scarcity of inputs and the devalued real, producers they prefer to export (to receive in dollars and reduce their losses) instead of selling to the domestic market. The government says that there will be no shortage of food in the country, but prices will rise even more.

In this context, the problem of protectionism comes in. In a liberal economy, it is not desirable for the government to intervene in the decision of producers. In Argentina, the government has imposed restrictions on grain and meat exports to lower domestic prices. According to analysts, this alleviates the problem in the short term, but over time it can break agricultural producers.

The fear of actions such as Argentina’s, which disrupt international supply chains, has led to countries dependent on food imports to seek unorthodox alternatives.

The most controversial is the purchase or lease of land and water sources in poor countries, as South Korea, Saudi Arabia and China have already done . The target countries were Sudan and Ethiopia, in Africa. The richest countries transport all the production to their territory and end up depleting water sources and supposedly damaging the soil in the “host” countries.

The fact that a population victim of food insecurity sees carts loaded with food leaving the country can lead to social upheavals.

Intelligence sectors in Brazil are investigating an alleged purchase of land by China in the Bahia region, but for now there is no concrete evidence that this has happened. The local government denies it.

Prospects for the future

Many nations try to reduce external dependence in the food sector by irrigating areas to make them productive, but this solution is temporary. Saudi Arabia, for example, pumped water from its aquifers for 20 years until it was exhausted. Its solution now may be to exchange oil for food in a more serious food crisis.

In parallel, there are estimates by analysts that rising global temperatures could influence global food production over the long term. time, supposedly decreasing production efficiency. There are no guarantees that technological advances will make the agricultural sector capable of keeping up with the increase in the world population.

The irreversible process of transition to clean energy can also mean that part of arable land is destined to the production of grains and sugarcane to generate ethanol – which will generate more pressure on food production.

In theory, Brazil has water reserves and arable land that can shift the geopolitical balance in favor of the country. The economy is often used in geopolitics as a “weapon of war”, to force its will on a rival.

In this context, according to Heleno, Brazil needs to explore its territory in a sustainable way (without destroying the rainforest) and strengthen agribusiness.

But this is not enough. The country needs to invest in infrastructure, according to analyst Gabriel Leal de Barros, chief economist at RPS Capital. For the country to continue to develop a key sector such as agribusiness, it is necessary to eliminate bottlenecks. In other words, create ways to transport production more efficiently, improving logistics and infrastructure.

Economic reforms carried out in the current government, such as the railroad framework and the program to encourage navigation of cabotage, are positive efforts in this direction.

With fewer bottlenecks, the country would be able to escape the “trap” that has been providing low economic growth since the 1990s 1980, according to the analyst.

Similarly, if the world cannot produce more food with less water, maintain fertile soils and reduce transport costs, food crises such as that is configured today can become an increasingly common reality. And in a scenario of scarcity, global rivalries can intensify and armed conflicts within or between nations become more likely.