Eurasia Press & News
To Prevent a Global Food Crisis, Expand the Lend-Lease Program
The Russian invasion of Ukraine has already killed tens of thousands, displaced millions, and thrown global financial markets into chaos. But without serious international action, Moscow’s war will lead to another deepening crisis: worldwide hunger. Both Russia and Ukraine are major producers and exporters of grain and other agricultural goods. The conflict has thoroughly disrupted this trade, with potentially disastrous consequences.
Russia has blockaded the Black Sea ports from which Ukraine exports nearly all of its grain. Combined with the unwillingness of maritime insurers to protect cargoes moving through the war zone, the conflict will reduce Ukrainian and Russian wheat and corn exports moving through the Bosporus to a trickle. International sanctions on Russia have restricted its grain exports and interfered with its capacity to finance these cargoes, limiting its ability to raise scarce foreign exchange and costing it foreign buyers. The war and the blockades have also led to a surge in commodity prices. Wheat prices rose from $7.79 per bushel at the end of 2021 to $12.83 per bushel in mid-May of 2022, an increase of 64 percent. The United Nations reported an overall year-on-year global food price increase from March 2021 to March 2022 of over 30 percent. Some countries, notably China and India, have reacted to these price hikes by hoarding food and imposing export controls, further inflaming food price instability.
Ukraine and Russia account for at least a quarter of global wheat exports and nearly 60 percent of sunflower oil exports, but the crisis is wider and deeper than the shortfalls in these commodities. Global food and energy prices were already rising before the Russian invasion, as a combination of natural and manmade disasters and pandemic-related supply chain disruptions created food insecurity hot spots in more than 20 countries, according to the United Nations. From January 2020 to early 2022, the Consumer Price Index for food increased in the United States by nearly 15 percent and in Germany by 14 percent, but it rose even more sharply in more vulnerable countries: in Egypt by more than 21 percent and in Lebanon by an astounding 402 percent in 2020, 438 percent in 2021, and an annual rate of 374 percent in the first four months of 2022. The knock-on effects of the Russian invasion now threaten to make basic food staples inaccessible to many people, particularly in the global South.
The United States and its allies responded to Russia’s invasion with alacrity in supplying Ukraine with weapons and intelligence to repel Russian forces. They now need to muster a similar response in staving off a full-blown international food crisis. To do so, the United States can draw from its own history. Its World War II–era lend-lease programs sent copious amounts of food to sustain the British and Soviet war efforts. The United States remains the world’s largest exporter of agricultural produce and can turn that bounty to good use today. Working with the World Food Program (WFP), the private sector, and other partners, the United States can save millions of lives and demonstrate leadership on the international stage by delivering food to those who need it the most.
A PRECEDENT FOR ACTION
U.S. actions during World War II provide a template for policy today. In 1940, the United Kingdom stood virtually alone against the Nazi onslaught. The country had its back to the wall, with its foreign reserves drained and almost no capacity to fend off what seemed like an imminent Nazi invasion of the British Isles. In the United States, President Franklin Delano Roosevelt, straddling the politics of an impending foreign war and domestic isolationism, sought a solution that would allow his British ally to be both armed and fed.
The U.S. response came in March 1941: the Lend-Lease Act, a program of assistance that underwrote the British war effort. Lend-lease is remembered largely in terms of the U.S. provision of ships and military hardware to the United Kingdom, but it also included food aid. The United States sent grain, fats and oils, vegetables, canned meat, milk, butter, dried fruits, and nuts to feed the British public and sustain British forces. This food amounted to over 13 percent of total lend-lease tonnage. After Hitler attacked the Soviet Union in June 1941, it also became a leading recipient of lend-lease largesse. Between 1941 and 1945, the Soviet Union received more than $10 billion of the $50 billion in total U.S. lend-lease assistance, equivalent to $162 billion in today’s money, second only to the huge amount of aid received by the British Empire.
That history should embolden policymakers in Washington to address the new global food crisis. The world is not short of grain and food, but many countries are in dire need of aid and assistance. For instance, Egypt, the world’s largest importer of wheat, was sourcing 80 percent of its grain from Russia and Ukraine before the war began. Egypt now faces wheat price increases of between 40 and 50 percent. As the Egyptian scholar Ammar Ali notes, the price of a loaf of bread “defines the bond between people and the state” and was the key factor that sparked Egypt’s 2011 revolution. Over a quarter of Egypt’s 89 million people live below the poverty line. Nearly four million Egyptians are extremely poor and cannot meet minimum caloric requirements. And Egypt is hardly alone in this precarity: Afghanistan, Ethiopia, Kenya, Nigeria, Pakistan, South Sudan, Yemen, and many other countries in the Middle East and North Africa are staring into the abyss.
LEND-LEASE TO FEED THE WORLD
In May, Biden signed the Ukraine Democracy Defense Lend-Lease Act of 2022, resurrecting the lend-lease program to provide arms and weapons to Ukraine. The act authorized the lease or lending of military equipment to Ukraine and other eastern European countries and exempted them from five-year limits on the duration of the loans and repayment of the costs incurred by the United States in leasing the equipment. But U.S. officials seem not to have recalled the key role of food in past lend-lease programs. Fully following the historical model would mean making use of the Lend-Lease Act to tackle the looming global food crisis.
The supplemental funding bill accompanying the lend-lease package makes general reference to “emergency food assistance to people around the world suffering from hunger as a result of the war in Ukraine,” but it offers no specific provisions for how this aid is to be raised and delivered. The lend-lease shipments would most readily dovetail with existing support to countries currently receiving help through the World Food Program. The WFP provides huge quantities of food as well as technical assistance to 120 countries but is currently chronically underfunded and undersupplied—both issues that would be relieved by augmented assistance under the lend-lease program. This June, the WFP announced that it was suspending the food assistance it supplies to 1.7 million people in South Sudan owing to a lack of funds.
The organization is currently funded entirely by voluntary donations, with nearly $10 billion raised in 2021, $5.2 billion short of what it needed even before the outbreak of war in Ukraine. The WFP’s staff of around 21,800—87 percent of whom are based in the countries the organization serves—has an unblemished record of honest dealing and preventing profiteers and corrupt middlemen from siphoning away much-needed food. Specific lend-lease aid would flow to nutritional support for mothers and children, school food programs, and food-delivery initiatives in rural areas where children are less likely to attend school.
The war in Ukraine might lead to another deepening crisis: worldwide hunger.
The food would be sourced through normal commercial channels in the United States: grain companies, large cooperatives and dairy firms, and other food-processing companies. In most cases, actual exports would be handled by traditional commercial exporting firms. These firms own or lease export facilities, are familiar with freight brokerage and insurance issues, and in many cases, have a history of serving markets in North Africa, the Middle East, and other food-insecure regions. The U.S. government would pay for the food, either under direct appropriations for the Ukraine legislation or more likely under the authority of the Commodity Credit Corporation of the U.S. Department of Agriculture. The CCC has bought surplus commodities for storage, food aid, and school lunch programs for more than 80 years and has ample budgetary resources that do not require special appropriations. It was created in 1933 as part of the first New Deal agricultural adjustment legislation and is empowered to engage in precisely this sort of assistance. The CCC charter authorizes the sale of agricultural commodities to other government agencies and foreign governments and the donation of food to domestic, foreign, or international relief agencies such as the WFP.
The largest volumes of this assistance would be wheat, corn, and rice, with lesser quantities of vegetable oils, dairy products, and bulk processed fruits and vegetables. The U.S. grain marketing system regularly handles production in excess of 500 million tons per year and exports of 100 million to 150 million tons per year. Shipments from the United States would need to begin immediately and would likely continue for several years.
The United States has the capacity to provide this assistance without causing major diversions from other export destinations. USAID’s Bureau of Humanitarian Assistance procured 697,000 metric tons of U.S. wheat in 2020 for food assistance, representing 47 percent of all commodities purchased by the agency, with wheat the largest commodity used in emergency and nonemergency food assistance. The U.S. Grains Council calculates a metric ton as 36.7 bushels of wheat, so that 697,000 metric tons amounts to 25 million bushels, equal to less than five percent of the 590 million bushels of U.S. hard winter wheat or seven percent of the 353 million bushels of soft wheat forecast to be harvested in 2022. Over five billion bushels of U.S. corn are now swallowed up in the making of ethanol, equal to 40 percent of the huge U.S. crop; a portion of the corn allocated to making ethanol could easily be diverted to exports. Extending aid to a hungry world would not add much to U.S. food prices. U.S. consumers spend less on food as a percentage of household income (8.6 percent last year) than do consumers in any other country. Basic grains contribute only pennies on the dollar to the cost of further-processed foods.
The United States has ample export capacity, as the above figures indicate. There is also no shortage of the bulk ocean vessels necessary to transport food to the places where it is needed; the export market has substantial excess capacity, in part because of the war’s disruption of normal marketing flows. The foreign food assistance that could accompany the lend-lease proposal would constitute a relatively small part of the global food trade and, therefore, can be serviced by the routine practices of that trade.
STAVING OFF A CRISIS
The challenges to democracy and human welfare posed by Russia’s unprovoked aggression have rallied the United States and many of its allies in a fight for Ukraine’s freedom. The United States, the European Union, and their allies have boldly confronted the challenge to geopolitical stability posed by Russia’s invasion by providing munitions, military intelligence, and advanced weaponry. Sanctions on Russian oligarchs and Russia’s economy are beginning to have a meaningful effect, as are policies in Europe to reduce dependence on Russian gas and oil.
The 2022 Ukraine Democracy Defense Lend-Lease Act must now be expanded to mount a similar response to the global food crisis accelerated by the invasion. Every effort should be made to avoid the bureaucratic mishandling of food aid and assistance. The transport and distribution of this food will benefit from the expertise of people and partners skilled in managing global market fluctuations and instability. Commodity firms practiced at procurement, management logistics, and deliveries are accustomed to doing business in collaboration with the WFP and other aid agencies. Distribution within recipient countries through reliable partners such as the WFP also provides assurance against malfeasance but should be accompanied by oversight and audit by the U.S. government.
Producing agricultural goods is one of the United States’ fortes. In taking serious actions to prevent a global food crisis, the United States can begin to restore the respect and legitimacy it has lost in recent years by demonstrating the tangible good it can do for others.
