Bishkek mayor Aziz Surakmatov assuring the media that food supplies are plentiful. (Bishkek mayor’s office).
This briefing explores government policy and food provision in the Caucasus and Central Asia as COVID-19 upsets farming and trade networks around the world.
Truckloads of cabbage are rotting in southern Kazakhstan. Russia, the world’s largest wheat producer, has limited exports this year. In Tajikistan, potatoes cost 86 percent more than last spring.
Rich countries, meanwhile, are destroying fresh food supplies as restaurants remain closed.
COVID-19 is upending trade networks around the world, putting some people at risk of food shortages. The director of the UN World Food Program warned in April of “biblical” famines.
While the South Caucasus and Central Asia do not invite such alarm, roughly one-third of the populations of Armenia, Georgia and Tajikistan are chronically food insecure. Add an economic crisis of as-yet unknown dimensions to obstructed supply chains and a less predictable climate, and the authorities are clearly worried.
Governments are hoarding food, possibly contributing to price increases. These protectionist impulses risk hampering the global response, says the World Trade Organization, which reckons that only about half of countries enacting new export restrictions are keeping their policies in line with WTO rules.
Russia, the world’s largest wheat exporter, on April 26 suspended grain shipments until July 1 except for members of its trade bloc, the Eurasian Economic Union. The EAEU has also restricted exports of some food staples.
Fortunately, Russia expects a good harvest this year. In 2010, when drought and fires plagued the country, Moscow banned wheat exports. Six months later, higher bread prices in the Middle East helped stoke the Arab Spring. Academics have linked the two.
Of course, it is impossible to say how the current changes to food supplies will reverberate around the world. This briefing explores government policy and food provision in Eurasianet’s core coverage region.
Armenia is one of the most shock-prone countries in the world, recent crises have shown.
Armenia’s food security is “strongly linked to global and regional economies, making it vulnerable to future shocks caused by external factors,” such as declining remittances from workers in Russia, a report by the National Statistical Service, the WFP and the United Nations Children’s Fund warned in 2016. During the global financial crisis, in 2008, the price of bread and flour increased almost 30 percent, the report said. It found 28 percent of households “at risk of becoming food insecure if affected by any shock.”
More recent government statistics say the country imported one-third of its wheat supply in 2018, almost all its rice and the majority of its maize. It also imported almost half of its pork and 69 percent of its poultry.
Fortunately, cereal crop conditions are looking favorable this year, the UN Food and Agriculture Organization (FAO) said on April 14, but the country will need to import far more wheat than in recent years “as a result of the sharp decrease in domestic production.” About one-third of arable farmland in the country has been abandoned in recent years due to “inefficient farm structures, aging rural population, and labor out-migration,” the FAO said on April 20. With the COVID-19 crisis, “the re-engagement of abandoned agricultural land into production has become imperative.”
When schools closed in mid-March under the state of emergency, the WFP suspended its school feeding program: “For children and most vulnerable families who can no longer rely on this critical social safety net, WFP and the Ministry of Education have designed food assistance activities targeting 100,000 children across the country.”
As a member of the Moscow-led Eurasian Economic Union, Armenia is not subject to Russia’s export restrictions. “There will be no shortage of goods,” Prime Minister Nikol Pashinyan said at an April 16 Cabinet meeting, adding that commodity prices had stabilized. Pashinyan’s government has introduced export restrictions for staples until June 30.
At the beginning of the year, before the coronavirus crisis, the FAO estimatedAzerbaijan would need to import 10 percent less wheat in 2020 than it did last year. The country is not a member of the EAEU, so Russia, Azerbaijan’s traditional sourceof grain, is, in theory, not available to provide.
"There is no reason to worry" about wheat supplies because the government has reserves "and import contracts are reliable," said a May 4 commentary on Haqqin.az – a site reportedly linked to Azerbaijan’s security services. "As for potatoes, the country's available resources are quite sufficient to meet demand. The situation with the production of onions and other vegetables is also under control." The piece concluded by praising President Ilham Aliyev's efforts to secure the country's food supply.
Economist Natig Jafarli told Sputnik’s Azerbaijani service on April 21 that the country does not appear to have a problem with food stores, but lamented a lack of transparency. In the same article, Vugar Bayramov, a member of parliament, noted that whereas in 2015 Azerbaijan imported 84 percent of the food consumed in the country, that figure is now around 60 percent.
According to official figures, consumer prices increased 3 percent in the first quarter compared to the same period in 2019. Yet during a period of uncomfortably high inflation last year, Azerbaijani economist Gubad Ibadoglu of Rutgers University told Eurasianet that government inflation figures were “unbelievable.” The true inflation rate, he said, “is a minimum four or five times more than the official rate, and last year  especially the inflation on food was very high.”
A decline in living standards has sparked anger and even some protests in recent years. That was before the coronavirus crisis. Now Baku is spending billions of dollar reserves defending the manat, but with the price of oil – which accounts for over 90 percent of exports – having collapsed, a devaluation seems inevitable.
Seven people were detained for protesting unemployment in the southern town of Bilasuvar, the Interior Ministry said on May 5.
Writing on April 23 for the Caspian Policy Center – a Washington think tank that often reflects the Azerbaijani government’s views – the former head of the American Special Forces Command in Europe said the United States should send excess defense articles and food surplus to the Caspian region: “Widespread medical casualties could substantially disrupt food supplies and the agriculture sector which would produce a major international humanitarian challenge, especially in the urban centers.”
For a country with such a rich culinary tradition, Georgia imports a lot of its food, much of it from Russia.
In March, the government dedicated 10 million lari ($3.1 million) to stabilizing the prices of nine food staples through May 15. Tbilisi also earmarked 16 million lari to buy sugar, vegetable oil and pasta stocks and signed an agreement to import 27,000 tons of American grain at the end of May.
The ISET Policy Institute at Tbilisi State University released a paper on April 8 looking at how COVID-19 is affecting Georgia’s food supplies. Key findings:
- Georgia imported 85 percent of its wheat in 2018; of wheat imports last year, 98 percent came from Russia and Kazakhstan. It also imports most of its vegetable oil; last year 81 percent came from Russia.
- It is a net importer of dairy, but suppliers are diversified.
- Georgia imports almost half of its meat – largely from Brazil, Ukraine and Turkey, though ISET says demand could fall as the economy contracts.
- It is a net fruit and vegetable importer, mainly from Turkey.
- ISET recommends the government encourage farmers to produce more goods with import substitution potential and target support to farmers “affected by the dramatic decline in demand for full-service restaurant and hotel meals.”
A 2018 government report said 69 percent of poultry is imported.
In late April, farmers in Marneuli blocked roads to protest the state of emergency lockdown, which was preventing them from reaching markets with their produce. There are other reports of supply-chain disruptions as well.
Levan Silagava, director of the Georgian Flour Producers Association, said on April 27 that despite Russia’s wheat export ban, contracts continue to be fulfilled and he does not expect a wheat shortage. The FAO forecasted in March that Georgia would need to import slightly less wheat this year than last.
Like many of its neighbors, Kazakhstan is taking a top-down approach to managing food supplies. In March authorities introduced quotas for exporting wheat and flour and banned the export of potatoes, buckwheat, sugar, sunflower oil and livestock. President Kassym-Jomart Tokayev, appearing in a well-appointed food warehouse, said speculation and price gouging would be punished. He added that he had established a 14.8 billion tenge ($35 million) fund to ensure adequate food supplies are available and distributed where needed.
Food prices increased 9.3 percent in the first quarter, the chairman of the central bank said on April 14. The increase was caused both by seasonal factors and panic buying, he added.
Others paint a bleaker picture, however. A consumer group in late March said food prices had increased 15 percent. They may in part be affected by the 11 percent decline in the value of the tenge since March 1.
The government has set price controls for “socially important” food stuffs, drawing ire from the business community. Some supermarkets have said they are struggling to break even. On April 24, business ombudsman Rustam Jursunov wrote that the prices the government set are too low, forcing business owners to make a difficult choice: “to either violate the requirements for maximum prices and risk being fined or work at a loss.”
Kazakhstan is one of the world’s largest wheat exporters, yet the harvest last year was down almost 18 percent due to hot and dry weather, according to the U.S. Department of Agriculture (USDA). The oat harvest was also down 20 percent.
In the southern Turkestan region farmers say roadblocks are preventing them from taking their cabbage crop to market. Truckloads that would have been sold to Russia are going to waste, local media reported in late August, with farmers offering anyone who can get to them to come take cabbage for free. On April 28, the regional governor said farmers have 250,000 tons of cabbage they cannot sell. Only a month earlier, on March 25, in a bid to shore up supplies, the government dropped import duties on a number of staples, including cabbage.
On May 1 the UN said 500,000 Kyrgyzstanis “require immediate direct food assistance,” with about 1.83 million in total – 29 percent of the population – needing food or cash assistance of some kind. It also said that 400,000 farmers need “support to sustain and maintain” this year’s agricultural season.
The UN said there is an “urgent” need for over $11 million to feed the most vulnerable through June.
In the countries it surveyed across Europe and Central Asia, the FAO foundKyrgyzstanis working in the agricultural food supply chain the hardest hit by illiquidity. Some 65 percent of respondents from this industry told the FAO they are struggling to access financing. Access to storage for fruits, vegetables, dairy and fish is also a problem in the country, as is transportation for most of the same items. Food prices increased in April over the previous year, though only three staples increased by over 10 percent, said the FAO: potatoes (57.1 percent), mutton (12.7 percent) and wheat flour (11.9 percent).
The government has fixed prices for wheat and potatoes until mid-June, using state budget resources to shore up supplies.
Kyrgyzstan imports about half of the wheat it consumes. The FAO forecasts imports will need to be 10 percent higher than average in the year through June to make up for reduced domestic output.
The WFP estimates 184,000 children are no longer receiving free meals due to the school closures.
A WFP survey of five markets across Tajikistan in late April found that the average price of mutton had risen 26 percent year-on-year, chicken by 23 percent, potatoes 86 percent, and wheat flour 21 percent. In the same period, the FAO found slightly higher increases, most of which had occurred between January and April this year.
Government price controls appear to be worsening stocks.
“In Khorog market, retailers reported that price control policies pursued by the government authorities leave them with no choice but to decrease the supply of wheat flour to the market [in hopes of higher prices later on]. During this reporting week, shortages were not observed but it was reported that the quality of wheat flour and potatoes currently available in the market is of lower quality when compared to the supplies of these commodities during previous weeks,” said the UN on April 27.
Two journalists were detained trying to photograph panic buying at a Dushanbe market in March, accused by police of “sowing panic,” Reporters Without Borders said.
Inflation was already at a higher-than-desired 8 percent in 2019, driven in part by rising food prices. Even before the coronavirus crisis, the government was not meeting its own social spending targets, instead spending heavily to build the world’s largest hydropower dam. This year, “poverty reduction prospects will be undermined by the increase in food prices and the fall in growth rate and remittances,” the World Bank said in March.
On April 25 Prime Minister Kokhir Rasulzoda ordered a ban on the export of wheat, rice, lentils, peas, mung beans, eggs, potatoes and meat of all kinds. President Emomali Rahmon called for a two-year food supply on April 16.
In keeping with the biblical theme, the FAO said on April 15 that thanks to a warm winter, locusts have begun hatching earlier than normal in the region; they have the potential to attack winter wheat and barley sprouts in the south.
Ashgabat bristles at outside support. Little data is available on the country. That which exists comes from the government, which has a history of inaccurately reporting the state of affairs. What few reliable clues outsiders are able to put together hint at a bleak economic picture.
Wheat production seems to have rebounded in 2019 after a devastating harvest the year before. Last fall, the state news agency said “food security has been attained in the country” and the president ordered farmers to grow more cotton, a favorite cash crop. The FAO expects wheat imports, mostly from Kazakhstan, to be below-average this year, “reflecting adequate domestic supplies due to the 2019 above‑average production.”
The official narrative is of Turkmenistan as a land of plenty, although the occasional references to “food security” in government statements hint at a less rosy reality. Reporting on the difficulty that citizens periodically experience in getting their hands on basic staples falls to exile-run media.
Netherlands-based Turkmen.news on May 4 ran a story under the headline “Is famine beckoning?” in which it reported on how residents in parts of the Lebap, Dashoguz and Balkan region are being issued food rations only on presentation of proof of local residency. This measure is apparently being deployed to prevent speculative buying and reselling, a fact that suggests that the produce supply chain is creaking. Nevertheless, on May 2 the government said it had delivered domestically produced food products to neighboring Afghanistan as humanitarian aid.
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Tashkent is working hard to present a rosy image of its fight against COVID-19. On April 21, journalist Sharifahon Madrahimova was detained for two hours by police in Ferghana province while trying to report on price increases at the local bazaar. Police deleted her audio-visual material.
The FAO says Uzbekistan will need to import 2.8 million tons of wheat in the market year ending in June 2020, slightly more than the five-year average. Flour imports have more than halved since 2012, as local milling capacity has increased. “This allows the country to satisfy its domestic needs of wheat flour and export additional supplies of wheat flour to neighboring countries,” the FAO said. Uzbekistan shipped 1,000 tons of flour to neighboring Tajikistan in early April, Asia-Plus reported.
The EAEU restrictions on food exports will impact Uzbekistan. The https://eurasianet.org/food-security-in-the-time-of-coronavirus-a-eurasianet-briefingcountry imports most of the vegetable oil, soybeans and sunflower seeds it needs from Kazakhstan and Russia, EAEU members. Its own cooking oil refining industry employs 15,000 people, many of whom will lack inputs under the EAEU export ban, said an analysis reprinted by Podrobno.uz on April 13. After a poor harvest in 2018, the USDA saidoilseed and cottonseed production had both risen 7 percent in 2019 to normal levels.
President Shavkat Mirziyoyev said on April 29 that to avoid financial losses among companies working in the agricultural sector, he would allow the movement of vehicles transporting fruit and vegetables between cities and regions.
Earlier in April, the president told regional leaders to oversee increased agricultural output, which could translate into pressure on farmers to meeting production quotas. He said he wanted to see 20 percent more grain, a relapse into the state order system whereby the government fixed quotas for the cultivation of cash crops. Flour imports had decreased by 50 percent and grain by 31 percent in the first quarter, as compared to the same period the year before, Mirziyoyev said. Earlier this year, he scrapped the quota for the production and sale of cotton, leaving farmers who rent land from the state free to cultivate alternative and more lucrative crops.
A May 2 presidential decree would provide arable land to farmers willing to plant potatoes, vegetables, melons, legumes and oilseeds.
Uzbekistan began at the end of April exporting cherries to Russia, where demand far outstripped supply.