Natural disasters, wars and political crises make food supplies more difficult and food more expensive. Examples from Singapore and Indonesia show how fluctuations can be mitigated and supplies guaranteed.
Of all the rippling effects of the political, environmental and economic chaos that increasingly appears to define international relations and the health of the planet, food security - or the lack of it - is surely among the most urgent. It’s also comfood plex and subject to the vagaries of markets, weather and geopolitics, but in the simplest terms describes the availability and affordability of basic nourishment.
"The price of food is determined by supply and demand dynamics, and disruptions to either can create significant food insecurity", explains Mariam Ashroff, Head of Sustainability Management for Asia at LGT Private Banking, based in Hong Kong. "Recent years have seen simultaneous supply and demand shocks, a rare occurrence that has exacerbated global food challenges."
Food insecurity is also a relative concept, and is afflicting parts of the population in the richest economies. But the challenges Ashroff describes are especially heightened in poorer regions that are also more vulnerable to the wider effects of such shocks. In total, Asia accounts for more than half of all those facing hunger in the world - about 385 million people and more than any other region, according to the UN. In other words, even though Africa has the largest proportion of the population facing hunger, more people go hungry in Asia than in Africa.
Supply shocks tend to be triggered by:
For example, Southeast Asia was the world’s biggest importer of wheat from Ukraine and Russia when Moscow’s invasion upended global grain supply chains in 2022. Erratic climate activity in major alternative agricultural regions including the US have affected Southeast Asia’s ability to fill that gap in supply.
Similarly, the Ukraine invasion heaped further pressure on vegetable oil prices caused by soaring demand for biofuels made from plants like soybeans or canola, largely driven by emerging economies. Droughts in Brazil compounded the effect, along with protectionist policies from major palm oil producers in Asia, including Malaysia and Indonesia.
In Indonesia, low-income houses spend as much as 64% of their incomes on food
Many parts of Asia are particularly dependent on imports and therefore more vulnerable to shocks. Singapore and Hong Kong, which have limited natural resources, import more than 90% of its food, while Japan relies on imports for 60% of its food.
The effects of such disruptions to supply chains cause more than increases in prices, often compounding existing stresses caused by the same drivers, such as extreme weather, conflict and economic turmoil. Food producers and exporters who cut wages when hit by falling profits risk creating a vicious cycle, in which workers have less to spend on food that is only becoming more costly.
And price rises are disproportionately impactful, affecting countries in particular where households spend the biggest proportion of budgets on food. In Indonesia, low-income houses spend as much as 64% of their incomes on food in a country where food policies and import restrictions create high prices and limit access to healthier nutrition.
There has been a historical tension between self-sufficient approaches to agriculture and a reliance on trade, both of which are vulnerable to shocks of different kinds. "China, with its dual identity as a middle-income country and major global player, exemplifies this tension", write Parjiono Cipto Widarto and Chandra Kusuma of Indonesia’s ministry of finance at the East Asia Forum. "While its focus on food sovereignty has driven domestic investments in agricultural modernisation, China remains a significant importer of staples like soybeans and corn."
They explain that trade is typically the way nations stabilise food supplies after domestic shocks, but global crises expose the risks of such a reliance, promoting a shift towards "food sovereignty".
Meanwhile the climate challenge is "double edged", Ashroff says. "On one hand, the global food system is a major contributor to climate change, responsible for nearly a third of greenhouse gas emissions. Yet the consequences of climate change, including changing and erratic weather patterns, are causing floods, drought and crop failure in key agricultural regions."
Addressing global disparities in resilience requires major investments in domestic agricultural productivity, as well as infrastructure and climate mitigation. Indonesia is positioning itself as a case study in how to improve food security, having allocated USD 8.6 billion for the purpose in its 2025 budget following the establishment of a National Food Agency in 2021.
The country is investing the money in food infrastructure and reserves, as well as new technology such as digital precision farming to improve efficiency and yields, further reducing its reliance on imports. Farmers are also being incentivised to diversify foods beyond traditional staples so that supply shocks affecting particular crops do not pose such a threat. Elsewhere, Singapore has diversified in other ways, by increasing the number of food import sources it relies on.
"Financial innovation is just as critical as policy measures", Ashroff adds. "Ensuring stability requires rethinking capital markets to fund growth of projects in regenerative agriculture." She also points out the increased focus on agriculture at COP level, and the challenges of aligning decarbonisation efforts with the wider move towards better food security.
At the last COP meeting in Baku, for example, The Agriculture Innovation Mechanism (AIM) for Scale initiative revealed a USD 1 billion package to improve access to good weather forecasting for low-income farmers, in a partnership between the United Arab Emirates and the Gates Foundation.
Meanwhile the World Bank last year announced a new agribusiness and agri-finance strategy with a goal to create an ecosystem for the industry with doubling funding to USD 9 billion annually by 2030. In the area of climate finance, the approach includes support for governments to repurpose fossil fuel, agriculture, and fishery subsidies to incentivise greener practices and unlock increased financing for the agricultural sector.
Also, at the global and regional level, mechanisms such as the ASEAN Food Security Reserve are improving food resilience and emergency preparedness by mobilising collective resources across Asia and promoting better sharing of information and best practice.
At the G20 level, the Agricultural Market Information System (AMIS), which was founded in 2011 by the G20 Ministers of Agriculture in response to big hikes in global food prices, is working to improve transparency in international food markets so that member countries have the data to better prepare for and respond to shocks. The Meeting of Agricultural Chief Scientists of G20 states, currently chaired by Brazil, promotes research and innovation in agriculture.
