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CARICOM Leaders Address the Agricultural Effects of Russia’s Attack on Ukraine

As leaders from CARICOM and Central America gather on Ambergris Caye for the CARICOM SICA Summit, Caribbean nations are being advised by the former Managing Director of the World Bank to increase their budgets by at least twenty percent. The advice comes via a publication in Forbes Magazine that spoke on the effects the Caribbean region could face due to the Russia/Ukraine conflict*. *The article noted that in the Caribbean, economists and leaders are reflecting on how conflict in the breadbasket of Europe will affect an import dependent region that is still reeling from the financial impacts of Covid-19. Important factors being considered at this time are the supply chain disruptions, hikes in oil and commodity prices, rising shipping costs and limited availability of vessels and containers. With Russia, the second-largest exporter of crude oil and the world’s largest natural gas exporter being cut off from global markets, economists predict that oil prices per barrel could easily hit the one-hundred-and-twenty-dollar mark. The article further states that Caribbean food security is deeply threatened by any major disruption that impacts the region. For those CARICOM member states that import up to 60% and sometimes as much as 90% of their food supplies, there are massive implications surrounding any war on this scale in the context of Covid-19 stricken flailing economies and struggling tourism sectors. If predictions hold true, that oil prices could rise as high as $130 per barrel, there will be implications for the cost of shipping, the cost of raw materials and the cost of finished goods. According to Forbes, “given their status as “the breadbasket of Europe,” the Russia-Ukraine conflict will have severe implications for current inflationary dynamics in the Caribbean— despite neither country being a major regional trading partner. Globally, Russia and Ukraine account for one third of all wheat exports. In the space of a few hours since Russia’s invasion of Ukraine, the price of wheat jumped to its highest levels since 2012 and analysts have warned that war would not only impact grain production but could double global wheat prices— and by extension, flour, bread, noodles, biscuits, cereal— major components in the typical basket of goods of the poor and vulnerable.” According to the USDA, more than two million metric tons of wheat (mainly for flour) and more than two point five million metric tons of corn (mainly for animal feed), was imported by Caribbean countries between 2021 and 2022. Jamaica Flour Mills (JFM), the country’s largest producer of wheat-based flour was forced to raise prices three times during 2021. In December 2021, Trinidad’s Majority State-owned National Flour Mills (NFM) also complained that the cost of wheat had gone up by more than 100%, causing a 19% increase in the price of flour. Similar impacts were felt in Barbados, Guyana and elsewhere within the region. Director General of the Organization of Eastern Caribbean States, Didacus Jules, commented saying that Caribbean region’s foreign ministers have been so focused on the myriad of issues pertaining to Covid-19 that limited consideration would have been given to the food security implications of Russia’s potential invasion of Ukraine. Trinidadian agricultural economist, Omardath Maharaj, has called on governments to respond by rethinking development policy and planning in agriculture, in order to systematically reduce reliance on foreign food products and bolster capacity.