IIn today’s climate-changing world, climate events occurring thousands of miles away are driving up the cost of everything around us – from airline tickets to a new piece of clothing to the market price of a meal at your favorite restaurant.
Take olive oil and chocolate as examples. Severe droughts in the Mediterranean have reduced Spain’s olive harvest by 40 percent, driving up prices for American consumers by 27 percent in June compared to a year ago. Prices for some chocolates, such as Cadbury’s Freddo, are also already 200 percent higher in Australia this year, and a similar rise is expected in US markets, largely due to extreme weather conditions hitting smallholder cocoa farmers in Ghana and Ivory Coast.
Such climate disasters in wheat-producing countries like Argentina also affect staple foods like breakfast cereals, pasta and bread. The price of wheat – and wheat-based foods – has experienced the greatest volatility in years since 2021. Why? Wheat production in Argentina was hit by droughts in 2021 and then in 2023, sending panic into global wheat supply chains already strained by the Russia-Ukraine crisis. Food companies responded to this volatility by preemptively raising consumer prices.
For me, as an Indian-American living in California today, rising wheat prices may mean a dollar more for pasta, but for my cousins in India, food inflation means cuts elsewhere, like in the education budget. Growing up in an extended family of 14 children in rural India, we often faced these challenges. When food prices rose, my three siblings and I had to switch to used textbooks at the start of the new school year. A similar pattern can also be seen in low-income American households, which are switching from fresh to canned fruits and vegetables in response to rising food prices.
Our planet will continue to be affected by climate change for decades to come, regardless of our current mitigation efforts. As an entrepreneur committed to making food and agricultural supply chains more climate resilient, I know that we need to fundamentally rethink our approach to supply chains to ensure affordable and accessible food for all.
Read more: How we can feed the world sustainably
Food supply chains are among the world’s most critical, facing some of the greatest climate change-related threats, such as extreme weather, rising temperatures and water scarcity, which impact crop yield and quality – all of which affect food security. But while climate change contributes significantly to this problem, other events such as wars exacerbate it. As a result, many governments go into “panic mode” and take protectionist measures to protect their interests. However, this often has ripple effects that exacerbate the very problem they were trying to avoid: price increases in food supply chains that disproportionately affect low- and middle-income consumers, including farmers who are themselves net consumers. This means that many farmers spend more money on food for their families than they earn from growing crops.
In theory, strategies like nearshoring (moving supply chains to neighboring countries like Mexico), friendshoring (moving supply chains to allied countries like India), and “America First” are helpful for semiconductor supply chains. But they don’t work for food supply chains. Sriracha peppers can’t grow in Minneapolis, and avocados can’t grow in Canada. Even if countries manage to diversify their food supply chains with friendly countries, that doesn’t necessarily mean that supply chains on both sides won’t be affected by climate events at the same time.
Instead, we need to radically rethink our approach to building resilience in food supply chains. So far, all approaches to climate change adaptation have been country- or company-specific. But this global challenge requires a global solution: a joint, cooperative effort by governments and companies at the international supply chain level that is proactive, not reactive, to build climate change resilience.
One of these global initiatives could be the introduction of Supply Chain Climate Adaptation Plans (S-CAPs). These plans, similar to national climate adaptation plans, would be led by multilateral organizations – WTO or World Bank in collaboration with governments – and private companies in the food, agrochemical and transport sectors. They would first identify vulnerable global food supply chains, focusing on staple crops such as wheat and rice. They would map areas of climate risk, critical transport routes and key agricultural regions. They would then develop strategies and identify projects to reduce these risks, such as creating climate-resilient seeds, diversifying transport methods, investing in hazard detection technologies and growing crops in safer areas.
Such an effort would require funding – a combination of international funds and corporate contributions to support assessments, research and development, and implementation. Unlike initiatives to reduce carbon emissions, which are primarily driven by reputational and regulatory concerns, initiatives to protect our food supply chains could deliver a two to ten times higher return on investment in the short to medium term. For example, Ethiopia’s investments in drought-resistant crops and water management increased yields by 40% and improved food security, returning two to four dollars for every dollar spent.
An international agreement may not seem like the most exciting solution to climate change, but it can help maintain food supplies and keep prices low for the average consumer.
When the COVID-19 crisis hit, the world came together and managed to go from ignorance of the virus to developing and delivering 5 billion vaccines in 18 months. We can certainly repeat that with the food crisis. But to succeed, a collaborative mindset, not an isolationist “America First” mentality, is critical.
