Recently the U.N. Secretary-General announced at this year’s 76th UNGA Food Systems Summit that the alleviation of hunger should be a principal world endeavor. Among talks of climate change, technology and geopolitical diplomacy, once again hunger was among the top discussed themes. According to an official release, the inaugural Food Summit had nearly 300 commitments and 148 registered commitments by world stakeholders from farmers to civil society and indigenous groups among others.
“I am here to sound the alarm: The world must wake up. We are on the edge of an abyss–and moving in the wrong direction,” the UN Secretary General said. Indeed he was right, and that is not more felt than by quotidian populations around the world and businesses, markets and industry.
While hunger has been among the 17 United Nations Sustainable Development Goals since the initiative’s inception in 2016, the scourge remains unresolved. In 2016 the World Health Organization reported 815 million people or 11 percent of the global population were affected by hunger. In 2019 that number had decreased to 690 million globally. Today post pandemic that number is nearly 1 trillion souls. It is insightful to note that even before the pandemic, hunger levels were rising.
One of the main barriers to good nutrition and access to food is poverty. In developing economies poverty ranks high among the majority of citizens. The world poverty rate rose from 8.4 percent in 2019 to 9.5 percent in 2020 according to U.N. Statistics. However that does not preclude advanced economies like the USA and others from their share of poverty. The United States Census Bureau indicated that in 2020 the poverty rate rose by one whole percentage point from 10.5 to 11.4. But perhaps one of the overlooked aspects of high poverty and nutrition gaps are the devastating effect poverty has on food and supply chain for agribusinesses.
You can’t make much money in the food and farming industry if nobody has money to buy it. Spiraling economies make earning a living in food production hard. A cyclical pattern emerges that leads to instability for both the farmer and his would-be customers. It. Impacts everyone along the supply chain.
In some places where the need for profit over people stands, many would rather burn and dispose of their food production rather than give the food away to hungry citizens. A 2020 Times article details the irony of farmers burning crops during periods of immense need. With farmers slaughtering livestock, disposing milk and even crushing eggs because there is no one to sell to–both internationally and domestically. Many Americans have assumed soaring food prices were due to inflation or a gross lack of supply chain labor, but actually, a large part is due to food destruction and an attempt to recoup losses.
This was a common, albeit inhumane practice during the 1930s depression when the US stock market crashed and America was teetering on the brink of collapse. Farmers’ biggest buyer became the government. Now with millions in government subsidies to keep US farmers competitive, the lack of buyers leaves an indescribable crunch choking finance for local farmers unwilling to fork over produce at bargain basement prices.
According to an official release, the inaugural Food Summit had nearly 300 commitments and 148 registered commitments by world stakeholders from farmers to civil society and indigenous groups among others.Data via UNGA 76, Food Systems Summit 2021
In 2020, the US government determined to purchase over 200 million in agricultural products to help with the income loss and redistribute through food programs. And more recently, farmers can now apply for a grant with the USDA to slow production and burn fields to let them lie fallow. The food market is in crises and oddly that practice of food destruction has returned.
Americans griped about food prices, assuming the spike in price was because of a natural scarcity. Um, actually, no. Food is rotting in barns and being burned because liquidity is drying up in many parts of the economy. Most assuredly lower middle class and working classes can’t buy in volume without living wages. Marketers in the restaurant, food and related industries should be deeply cocerned as well, since one can’t market a product that no one can afford–even when everyone needs it.
Whether you are a fan of cash payments or not, when people don’t have money or are uncertain about money, they ration and save. If local people at the very lowwest level of society are unable to gainfully engage with their economy through employment, business or other avenues, certain segments of that economy will fail. The food industry is a prime example as many farmer are unable to sell humanity’s most valuable resource–food. And as many retailers have been quick to learn, people without an income or liquidity of cash DO NOT BUY. Investment in people at all levels has become critical for the the market.
While these poor masses can be ignored, the absence of their contribution to the economy cannot. Every household is a reflection of the health of the market. As more households reach breakpoint at the lowest levels, more food production will go unused and likely destroyed. The goal of food security then, can only actualizes in transactional economies when consumers are able to fully participate at even the lowest level.
Everybody eats. Marketers and those in agricultural business have a vested interest in the success of the common man and the growing poor. As a marketers and businesses in food, textiles or even services learn that, poverty and hunger is a big deal, because that represents the viability of their market. The pandemic has exacerbated the breakdown of the food markets, causing bankruptcies and huge losses across the industry. The US like other nations is in crisis and marketers should pay attention. Because, without buyers, there is no market.