#deglobalization #demography #geopolitics
COVID-19 and the logistical issues that arose from lockdowns illustrated the importance of domestic supply chains. From semiconductors to fertilizer, countries that rely most heavily on imports faced the highest price increases.
In a globalized system this means every country suffered at least to some extent. Although unhappily, the US should be able to withstand long backorders of new cars, appliances, and the like. What no country can do without is food; and no country can grow sufficient food without fertilizer.
From an agricultural point of view, the US is in a comfortable position. Domestic grain and soy production is strong enough that the US is the second largest exporter of wheat and soybeans and the single largest exporter of corn.
Where I worry is not the US or Argentina or France, but countries whose agricultural system relies on imports—this includes grain and soy to feed livestock.
Many countries in Africa and the Middle East cannot source their grain domestically, but instead rely on imports, largely from Russia.
Additionally, American farmers, although unhappily, should be able to adjust to fertilizer price increases, but farmers in poorer, less-industrialized countries will simply have to do with less, and that means smaller yields.
Countries that fall into this category will be eager to join strategic trade partnerships with grain-producing countries. A country like Colombia can feel relatively safe relying on US imports, but elsewhere the logistics are not quite as simple. Egypt, the world’s largest wheat importer, sources 85 percent of its wheat imports from Russia and Ukraine. Sourcing its grain from a more stable region will be a top priority, especially as the Ukraine War drags on.
There is nothing more important than a country’s access to food.
For this reason, I consider the agriculture chapter of The End of the World to be of particular importance. The globalized economic system has been largely responsible for lower hunger and poverty rates in developing countries.
The question is how many of these gains can be preserved as the system disintegrates?
Watch full interview here…
18:20
