Todd Hirsch is the former Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.
Food is getting so expensive that grocery executives such as Loblaw Cos. Ltd. chairman and president Galen G. Weston are being hauled before a House of Commons committee this week – after dodging a previous informal invite.
But cast aside this bit of political theatre and the role of Canadian grocers. Not only is this issue so much bigger than them, everything is also going to get much worse.
Tune into the news on any given day and you’ll be bombarded by sobering issues. There’s inflation, yes, plus geopolitical clashes and climate change – three issues that are raising anxiety levels around the world. And it’s already getting worse. Prior to this year, who would ever have thought that something as simple as a rogue weather balloon would stir up fears of global war?
These three horsemen may seem discrete, but inflation, geopolitics and climate change are combining in ways that could push food insecurity to crisis levels by the end of this decade.
First, even as central banks raise interest rates in an attempt to get inflation under control, food prices are not going to fall back to where they were. In other words, a return to a 2-per-cent inflation target won’t return the price of meat, bread or produce back to 2019 levels. It just means that food prices will continue to rise, only a bit more slowly.
Then consider geopolitics. Everything changed when Russian tanks rolled into Ukraine. Until that point, the global political and economic order had mostly been settled. The end of the Cold War in the late 80s ushered in a new era of political co-operation and trade liberalization. That era has now abruptly ended.
In 2022, we witnessed the shocking speed at which military conflict was able to curtail agricultural exports from Ukraine and Russia – two of the world’s largest producers. What were once considered stable and reliable food supplies were suddenly cut off. Famine loomed over many African countries as a result. Global commodity prices skyrocketed.
What lies ahead geopolitically is hard to predict. But with tensions building between China and the United States, not to mention troubling developments in places such as North Korea and the Middle East, it’s likely that the world will be rocked by more military tension. That could further disrupt trade in agriculture, and in turn, intensify food insecurity.
The third issue is perhaps the most sinister of all, and that is the impact of climate change and more severe weather events. Even as politicians argue over how to lower carbon emissions, much of the damage of a warmer planet has already happened. More severe drought, more devastating flooding, more torturous heat and more crippling cold: All are having an increased negative impact on agricultural production around the world.
It all underscores the enormity of the crisis we are headed for, and it’s because of one obvious truth: You have to eat. Along with fresh drinking water and shelter, food is one of the few things humans absolutely require to live.
This is why agriculture and food insecurity need to be addressed at least as urgently – if not even more so – than the other concerns mentioned here. It is a complex system in which agriculture is both affected by, and contributing to, the worries of geopolitics, inflation and climate change.
Policy prescriptions are also complex. Historically, few industries have been as politically charged and motivated as agriculture. Depending on the region, the type of agriculture and the overlying political backdrop, farmers have often been either kingmakers or pawns in the halls of legislative power.
Industrial policies to help nurture and sustain agricultural production are needed urgently, and not just for political expediency. Required are sensible paths forward to increase domestic food production. While it may seem counterintuitive, some of that sensible path forward might lead toward smaller, more environmentally sustainable and more local food production.
The world is a troubled place at the moment. So many issues and concerns are creating public anxiety unlike what many of us have ever experienced. And while these issues are serious, they will all be made far worse in a world of bare grocery shelves, food hoarding and empty stomachs. It’s time to take agriculture and food insecurity more seriously.