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Publication | 2022

Implications of the war in Ukraine for agrifood trade and food security in the Southern and Eastern Mediterranean: Egypt, Jordan, Lebanon, Morocco and Tunisia

The SEMED group of countries are among the largest grain, wheat, and foodstuff importers globally. The share of imports in domestic availability of calories ranges from a sizeable 37 percent (Morocco) to a staggering 84 percent (Jordan). Wheat plays a crucial role in these countries, contributing more than a third to overall food supply in each of them. Governments are heavily involved in imports of wheat and other cereals, with state agencies often the largest or the only legally permitted importer.

Given their reliance on internationally traded food commodities, SEMED countries are generally exposed to global price surges, but additionally the Russian Federation and Ukraine are important direct suppliers of wheat, other cereals and sunflower oil. In 2021 the Russian Federation and Ukraine together accounted for about 75 percent of the total wheat and wheat flour imports of Egypt and Lebanon, close to 40 percent in Tunisia, more than 30 percent in Jordan and around 20 percent in Morocco.

Gross food import bills in SEMED countries are high and are likely to increase further in 2022 and beyond. Further, the crisis is hitting some countries at a time of economic hardship driven by a severe drought (particularly in Morocco), sluggish economic growth (Tunisia), or a full economic crisis (Lebanon). Rising food import bills and insufficient foreign exchange earnings pose a challenge from the vantage point of financing crucial food imports. For the SEMED countries, the current crisis is mostly a supply side shock.

In line with their status as net exporters of fertilizers, SEMED countries could benefit from surging global prices, but higher prices are also likely to be passed on to farmers.

Policy recommendations

Overarching principles

  • keep trade in fuel, food, and fertilizer open;

  • avoid ad hoc policy changes such as introducing export bans or import subsidies; and

  • develop and commit to long-term and comprehensive national food security strategies.

Short-term policy recommendations

Mobilize funding for rising food import bills

Work towards diversifying food import sources and reducing the cost of imported food through appropriate policy adjustments in the near term.

  • For government imports of cereals (most notably in Egypt, Jordan,and Tunisia), it would be advisable to review and adjust quality requirements, payment and shipping terms and other conditions to be met by foreign bidders for public tenders.

  • Similarly, governments in some SEMED countries have to clear possible countries of origin before exporters from these countries can supply their markets. Considering the current situation, SEMED countries should simplify and fast-track such clearance processes to gain access to grains from alternative markets.

  • In SEMED countries where private sector engagement in (some) cereal imports is currently permitted, governments could simplify import procedures to drive down the cost of trading.

Support vulnerable groups and provide humanitarian assistance and income support where needed. Governments in the SEMED countries should expand or even roll out new programmes to provide social protection to those most in need, while simultaneously exploring ways to improve the targeting of existing, and sizable public food subsidy programmes (e.g. shift to more targeted measures).

Medium- to long-term policy recommendations

Reduce the cost of imported food through comprehensive reform of import regimes. Permitting or fostering private sector engagement in food import activities in an environment of high prices could be a way to attract private sector engagement into food importing activities.

Consider new technologies for agricultural production with a view to produce sustainably increased quantities domestically, thereby reducing overall reliance on imports. Crucially, decision-makers should be aware of potential trade-offs between increased food self-sufficiency and sustainability goals. Water scarcity in SEMED and the environmental impact of intensified agricultural production domestically may well justify continuing to source the bulk of available food from foreign suppliers that may be better endowed with natural resources and able to produce more efficiently in terms of resource use. Taking into account the sustainability dimension also puts a premium on exploring new agricultural technologies such as more water-efficient irrigation schemes (e.g. drip versus surface or flood irrigation) or technologies falling under the umbrella term of Controlled Environment Agriculture (CEA) that subsume techniques like indoor farming, or methods of growing plants in a soilless environment.