In Europe, we often talk about the pleasures of food, but we rarely talk about food as a lifeline. The war in Ukraine, happening on the European Union’s doorstep, has brought that notion sharply into focus.
Over the past few weeks, I have heard many stories of bravery, solidarity and kindness to bring food aid to Ukrainian people in need, often in very challenging circumstances.
From our Estonian food association member, we heard about Vitali, a Ukrainian truck driver who took a truck loaded with food donations from Estonia to Ukraine. After he made his delivery, he put his truck driving duties aside to join his countrymen in the fight for freedom. I cannot comprehend how he must have felt making those decisions.
Today millions of people inside Ukraine face serious food insecurity, while latest figures show there are 3.9 million Ukrainian refugees, scattered around Europe, who are also in great need of assistance.
We are proud at FoodDrinkEurope to collaborate with the European Food Banks Federation and join their #AllTogether4Ukraine campaign. The food bank network is providing essential aid in Ukraine and neighbouring countries such as Hungary, Moldova, Poland, Romania, and Slovakia.
Beyond this, European food and drink companies have been providing vital humanitarian support to Ukraine. This includes providing food and medical supplies to people in Ukraine; raising money to support charities and NGOs that are delivering urgent assistance to people in need; and providing accommodation, jobs and support to Ukrainians fleeing their country.
Urgent need to address global food chain pressure
To add to the immediate humanitarian crisis, the war in Ukraine is also disrupting food supply chains and increasing the pressure on global food security.
Ukraine and Russia are key suppliers of sunflower oil, wheat, maize, barley as well as fertilisers and packaging material used in agriculture and food production. A break in this supply will impact net food-importing countries in particular, especially those with high import dependencies such as in the Middle East and North Africa region.
While food security in the EU may not be immediately at risk today (and there is no need to hoard!), the pressures a lasting war and consequential supply challenges may put on global commodity prices and producer costs across the food chain are not to be underestimated and could have a serious knock-on effect in the years to come.
This is not only an issue for European agriculture, but the more so for European food manufacturing, one of Europe’s largest sectors in terms of turnover, employment and value added, given the cost inflationary impacts which are likely to stay around for some time.
“While food security in the EU may not be immediately at risk, the pressures a lasting war and consequential supply challenges may put on global commodity prices and producer costs across the food chain are not to be underestimated and could have a serious knock-on effect in the years to come.”
Already today, stocks of some critical raw materials used in food production, such as sunflower oil, are running low and prices are rising steeply. Already confronted with rising input costs since the Covid pandemic, shortages of food ingredients and packaging materials mean many European food and drink companies are struggling to keep up their production, further aggravated by the rising energy costs. Several food processors across the EU have halted or scaled back their production.
To help minimise supply chain disruptions and prevent costs from further spiralling, we need short-term as well as medium- to long-term action:
Short-term:
- Overcome logistical bottlenecks: Transport bottlenecks across the European region should be unblocked for critical food and packaging goods through the introduction of protected “green lanes”.
- Access to energy supplies: Sufficient energy should be made available at affordable prices to European food and drink companies in the event of energy supply shortages to maintain food production. ‘Food and drink’ is systems-critical.
- Pragmatic (temporary) leniency to address immediate sourcing challenges: Harmonised flexibility in food labelling and official controls across the EU, under the condition that food safety and human health are not impacted, may help companies in dealing with rapidly changing availability of ingredients. Temporary tariff suspension for certain products in short supply, for example sunflower oil, should be considered to ease imports from third countries.
- Resist protectionism: National export restrictions and other protectionist measures should be avoided as they exacerbate price volatility, limit the buffer capacity of the global market and fragment the EU Single Market.
- Support for SMEs: All businesses are facing increased input and energy costs, while some have lost access to markets or cannot source materials. Certain SMEs are particularly vulnerable to bankruptcy and job losses and will require support. The Temporary Crisis Framework for State Aid should provide relief.
Medium- to long-term:
- A food systems contingency action plan: While Europe’s supply chains have remained resilient during times of crisis (e.g. Covid), robust and proactive contingency preparedness mechanisms must be put in place at EU level, rather than relying on ‘plaster on the wound’ approaches when a crisis hits society.
- Diversification of supply: Engaging in a strong, smart and proactive EU trade agenda and promotion policy to diversify sourcing of supply of raw materials, increasing regulatory cooperation and identifying alternative export markets can contribute to increasing our long-term resilience. A serious discussion about strategic autonomy is needed at EU level, which should not be reduced to narrow-minded protectionism or self-sufficiency at the expense of others in the world.
- Uphold the Green Deal and Farm to Fork ambition (and accelerate where possible): Looking to the EU’s legislative agenda, our industry fully remains behind the objectives of the Green Deal and Farm to Fork Strategy. Climate change has not disappeared and we need the right policy tools to deliver more resilient food systems. Food security and sustainability are not mutually exclusive. Priority should now be placed on immediate win-wins for the environment and for business, such as cost efficiencies through circular economy actions (e.g. less food loss and waste, valorising by-products, etc.); we expect policy-makers to enable companies in the transition, now more so than ever before.
While the EU food and drink industry remains in crisis management mode – safeguarding employees caught up in the Ukraine conflict, securing food supply chains and providing humanitarian support to people impacted by the crisis – we are committed to work with the EU, governments and food chain partners to mitigate global supply chain issues and avoid disruptions as much as possible.
For now, though, our thoughts remain with all those impacted by the war. We stand in solidarity with the people of Ukraine.
