Russian Roulette: Ukraine exposes Lebanon’s dangerous food security game

The Ukrainian crisis is merely the latest alarming threat to Lebanese food security in recent years. It follows on the heels of the country’s economic crisis, the COVID-19 pandemic, and the Beirut Port explosion – a series of unambiguous warning shots.
Shaya Laughlin, Zeina El-Khatib

February 25, 2022

As Russian soldiers pour into Ukraine, grave uncertainty looms over Lebanon’s wheat supply. For years, Lebanon has relied overwhelmingly on both countries to provide the wheat used to make the nation’s leading staple food: bread.

Already, the conflict has exposed that Lebanon’s indolent political class has left the country wide open to catastrophe. Within weeks, Lebanon could face crippling wheat shortages. This would inevitably drive up the price of bread for a population already struggling to buy food.

The Ukrainian crisis is merely the latest alarming threat to Lebanese food security in recent years. It follows on the heels of the country’s economic crisis, the COVID-19 pandemic, and the Beirut Port explosion – a series of unambiguous warning shots.

Without doubt, war in Ukraine matters to Lebanon. The country relies almost entirely on imports from the Black Sea countries to meet annual wheat demands; according to UN-FAO statistics, in 2020 Lebanon sourced 66% of total wheat from Ukraine and a further 12% from Russia. If wheat prices continue to spike, then the cash-strapped Lebanese government will struggle to secure bread for its people.

It is for precisely these emergency situations that countries maintain a strategic grain reserve – a large wheat stockpile to mitigate supply line cuts. In Lebanon, the state previously ensured that about three months’ worth of wheat always remained in storage, ready to ward off unexpected food security threats. That was until Tuesday, 4 August 2020.

Source: FAOSTAT; Reuters

Delaying the rebuild

The country’s strategic grain reserve could scarcely have disappeared in more dramatic circumstances. The Beirut Port silos – which could store up to 120,000 tonnes of wheat – bore a massive part of the explosion that tore through Beirut. The shattered building has remained largely untouched since – a grisly, visible reminder of the political class’ criminal negligence, instead of its proper function: an essential storehouse for food.

Since then, the government has taken no effective steps to replace the Beirut Port silos’ storage capacity. The Ministry of Economy & Trade blames the ongoing explosion investigation for not rebuilding the silos within the port precinct. Yet proposals to construct a storage facility elsewhere – in the Bekaa Valley, for instance – have led nowhere.

“The administration is not studying, planning, or executing what needs to be done” said Riad Saade, director of the Lebanese Center for Agricultural Research and Studies.

“We need the silos to be rebuilt – yesterday,” warned Saade.

Geryes Berbari, head of the General Directorate of Cereals & Sugar Beets, agreed with Saade’s assessment. “(Establishing) a strategic grain reserve is necessary to avoid food insecurity,” he asserted.

The General Directorate, which operates within the Ministry of Economy & Trade, is tasked by law with overseeing Lebanon’s strategic grain reserve.

Instead of rebuilding, the government has relied exclusively on private flour mills to store Lebanon’s wheat stocks since the explosion. Yet this approach has not solved the problem at all.

Until now, flour mills have been importing only enough wheat to meet immediate market demand; they have not been stockpiling emergency reserves. Should the government rent storage space from private flour mills or other storage facilities to do so, the extra, non-state storage capacity would not even come close to the Beirut Port silos.

An informed grain industry source said that, even if all private storage facilities in the country were empty, their total capacity would only add up to approximately 40,000 tons, about one-third of the Beirut Port’s destroyed grain house.

Going further afield

If Ukrainian and Russian wheat becomes unavailable, imports will need to come other countries. This approach, which Saade describes as the state’s “Plan B”, will weigh heavily on cash-strapped Lebanon.

“If we are not importing from the US, Argentina, or Australia, it’s because the Black Sea wheat is much cheaper,” observed Saade. In 2020, just 0.4% of Lebanon’s wheat came from Australia, while no Argentinian or American shipments arrived.

A sudden need to buy expensive, foreign wheat could not arrive at a worse moment. Private flour mills receive subsidies from the Banque du Liban (BDL) to help meet shipping costs. Yet BDL has increasingly delayed in paying bread subsidies to wheat importers, who are already struggling with rising import costs and the Lebanese Lira’s savage devaluation.

During the economic crisis, Ukrainian and Russian wheat has offered some respite. Importers have been able to purchase relatively small wheat shipments, given the proximity of the Black Sea countries to Lebanon. Importing from distant places like Australia or Argentina will require buying in much higher quantities – not to mention at a more expensive rate.

This pricey alternative will also take time, further delaying the re-establishment of Lebanon’s strategic grain reserve. The same grain sector source offered the example securing wheat shipments from Argentina, which could take up to two months to reach Lebanese shores.

What about pulses?

In import-dependent Lebanon, one might forget that countries can bolster food security in another way: scaling up local production. Based on the most recent figures, Lebanese farmers contribute just 18% of the country’s total wheat supply. In addition, most domestically produced wheat is durum, which is more useful for making pasta than bread.

Lebanon can never compete with wheat market titans like Ukraine and Russia, which benefit from sprawling farmland and massive economies of scale. Yet Lebanese farmers do excel at producing other strategic crops – especially pulses, like legumes and broad beans – which can bolster emergency food reserves.

Despite these natural advantages, Lebanon has long relied on importing pulses from overseas. As one example, Lebanon produced only around 5% of the nation’s broad bean supply in 2020, using far more products from Australia (48%) and the United Kingdom (28%).

In May 2020, as the COVID-19 pandemic threatened global supply lines, the Ministry of Agriculture announced plans to produce more food locally. Unfortunately, the strategy echoes the failures of restoring the strategic grain reserve.

The Ministry of Agriculture plan set out to increase domestic wheat output by 2025, while also supporting farmers in growing pulses. To date, however, the policies have not borne fruit.

A source within the ministry revealed to Triangle that grain and pulse production has not risen significantly. The informant blamed high costs of agricultural inputs for farmers, coupled with the fuel crisis that has crippled agricultural infrastructure.

Dangerous times

The crisis in Ukraine has exposed yet another Lebanese catastrophe. As matters stand, the country does not have enough reserves of wheat and other grains – or any other strategic crop, which could act as a substitute. Without replenishment, the country’s current wheat stocks could last as little as six weeks, according to the government.

And even if Lebanon had kept more crops aside, the government currently has nowhere to store them. Rather than replacing the Beirut Port silos, the country’s sectarian warlords have bickered over the explosion investigation. Audaciously, the government is now using the much-delayed judicial enquiry as an excuse for not restoring the strategic grain reserve.

Further procrastination is simply not an option if Lebanon hopes to restore a semblance of food security. “If we decide to build silos today, it would need three years minimum,” predicted Triangle’s grain sector source.

Many of Lebanon’s crises require long-term solutions. Amongst others, these thorny issues include resolving the economic crisis and building a viable, nationwide public transport network. Maintaining a strategic grain reserve – which simply requires keeping a specified amount of food in a storage facility – does not fall into this category. For many other governments, this would be an easy win. Yet for now, even the most basic public services still prove elusive in Lebanon.

 

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