COVID and the Ukraine War may have kickstarted an age of food protectionism

It started with Indonesia banning exports of its valuable palm oil in April. In May, India announced it would begin limiting its wheat and sugar exports. Malaysia also ruled that it would begin banning chicken exports starting this summer.

These are just a few of the more than 20 countries that are suspending food exports right now, according to the World Trade Organization, as the world responds to a surge in food prices and mounting fears of constrained supply.

These fears existed before the war broke out, with countries like Argentina withholding meat exports from global markets since last year in an effort to tame inflation in the country. But with more and more countries implementing protectionist policies of their own, this new wave promises to have potentially global consequences.

“There are going to be worldwide impacts,” Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri, told Fortune. “When India restricts wheat exports, or Indonesia restricts vegetable oil exports, that’s going to affect prices for grains and for vegetable oils worldwide.”

There’s a word for this trend: food protectionism—and while countries implementing it might see it as a necessary measure to protect their economies, it is threatening the world’s most food insecure countries, many of which are on the verge of a hunger crisis.

‘Panic’ in food markets and protectionist policies

For countries that are limiting their food exports, fears of domestic food shortages are all too real, and protectionism is by no means a new tactic.

In 2007 and during the early months of 2008, food prices spiked worldwide due to high oil prices and severe droughts affecting agricultural production in many countries, straining global supply. The result was a massive spike in global food prices, led by a 300% surge in rice prices in the first four months of 2008 alone.

The rice price crisis was particularly concerning for several Asian countries where it is a staple in diets, and many opted to place bans on their rice exports out of fears that a global shortage was imminent. India, the world’s second largest rice exporter at the time, maintained a ban of non-basmati rice exports for two years between 2008 and 2010.

Some experts, such as Peter Timmer, a Harvard emeritus professor in development who has studied food risks for decades, believe that a similar scenario is playing out during the current food price crisis.

“I really do understand why they worry about providing food security to their citizens,” Timmer told Fortune. “There’s no functioning government in Asia that can ignore those pressures.”

For Asian countries traumatized by food price surges in the past, the choice to adopt more protectionist measures during times of potential shortages is reasonable. But doing so for a prolonged period of time could entail serious global consequences, and Timmer says the protectionist response so far has been primarily born out of panic and spooked markets rather than tangible threats.

“It’s totally reactive,” Timmer said of Asian countries’ recent wave of protectionist policies, adding that rash decisions are already leading some countries to walk back protectionism.

Last week, Indonesia, which arguably kicked off the trend this year, reversed its ban on palm oil exports after pushback from local producers and a domestic supply surplus caused the price of the commodity to drop precipitously. In Malaysia, where the chicken export ban is expected to kick off June 1, farmers are already concerned that the main buyer of the country’s chickens, Singapore, will find other suppliers during the ban, leading to a surplus in Malaysia.

Timmer warns that more “panic” in food markets and protectionist policies could lead to further distorted prices and supply chains worldwide. But that isn’t even the biggest risk that food protectionism carries, as many countries reliant on food imports are risking a full-blown hunger crisis.

“I think a lot of economists would agree that these measures are having detrimental effects on the global food system,” Westhoff said. “They may help a particular country fix its problems, but at the expense of causing harm to the global system.”

Food insecurity as a way of life

Food prices last month were nearly 30% higher than they were in April 2021, according to the UN, led by rising prices for meats and sugar. Prices for staple grains also hovered at very high levels.

The Ukraine War kicked price surges into high gear this year, as Russian blockades of Ukrainian food shipments and frequent looting by Russian soldiers means that 25 million tons of grain destined for global markets is sitting unused in storage silos.

But many of the world’s countries most vulnerable to food price swings in Africa and the Middle East have been dealing with food insecurity for years. The Ukraine war has only exacerbated a crisis that was already getting out of hand.

“For decades,” Timmer said when asked how long countries that rely on food imports in North and South Africa have been struggling with food insecurity. “This is something they live with.”

“North Africa and Sub-Saharan Africa are really badly hit,” he added. “First with wheat, and then with rice prices.”

Before the pandemic, Africa imported around 85% of its food, with countries spending around $35 billion a year on food imports. Stalled production worldwide, and disrupted supply chains that constrained imports, created major food insecurity risks on the continent during the pandemic. Combined with droughts that have affected local agriculture, the latest wave of global food shortages has made the risk of hunger even greater.

Countries in Africa reliant on staple rice and wheat imports are suffering the most from price hikes, with year-on-year rice prices up more than 30%, and wheat prices up more than 70%.

“That kind of dependency on outside supplies, whether they are traded food supplies or provided under food assistance, is very hostile to long-term development,” Timmer said.