Extending Black Sea Grain Initiative vital for smallholder farmers
The CFC welcomes the extension of the Black Sea Grain Initiative and its role in preventing price rises that hit the poorest in the community the hardest. We are thankful to the Secretary General of the United Nations, the UNCTAD Secretary General and world leaders for making it possible.
Since the initiative was launched in July 2022 to enable food and fertiliser exports from Ukrainian seaports almost 25 million metric tonnes of grains and foodstuffs have reached 45 countries.
55% of those exports have landed in countries classified as least developing or developing countries, and it is vital they continue to have access to these crucial commodities.
Many of the agribusinesses we invest in, and the smallholder farmers whose livelihoods they support, operate in these countries. Price rises impact them negatively in numerous ways. For example, they struggle to offset increases in the cost of inputs such as fertilisers because they have limited ability to raise the price of their products.
UNCTAD’s report A Trade Hope: The Impact of the Black Sea Grain Initiative demonstrates how developing countries have benefitted the most from the initiative. Extending it ensures prices are stabilised for the people who have the least resilience to inflation.
CFC Managing Director Amb. Mohammed Belal welcomed the news. He said: “Despite their distance from geopolitical events such as the Ukraine war, smallholder farmers have little protection against their disruptive impact. Price spikes limit their ability to build sustainable livelihoods and overcome poverty, which is why the Black Sea Grain Initiative is so important. Although inflation is still a challenge for many, this ensures volatility is minimised and smallholders can afford to keep running their farms.”
Amb. Belal added: “Of course, genuine stability will only come when the war ends. As the UNCTAD report notes that food security is still fragile and currency depreciations limit the benefit to developing countries when prices fall. As we move further into 2023 we will continue our mission to support agribusinesses that are helping smallholders to access new markets, grow their incomes and farm sustainably.”
Read more about how rising prices impact smallholders in Amb. Belal’s article for Sustainable Brands.