Sara Menker warns of fallout from growing food insecurity

Sara Menker runs a private company, Gro Intelligence, which uses data and AI to make predictions about climate change and food security, but when she appeared before the United Nations Security Council on May 19, she looked more like a lawyer. Data from Gro revealed that due to rising food prices around the world, 400 million people have become food insecure in the last 5 months alone. (Food insecurity, as defined by Gro, refers to people living on $3.59 a day or less.)

That’s the same number of people China has lifted out of poverty in the past 20 years, meaning two decades of progress have been reversed in five months.

Addressing world leaders gathered on May 19, Menker said: “I come here today to share insights from our data, with the underlying hope that all of us here with the power to change the course of the world. history will choose to do so.”

Menker, 40, who was chosen as one of TIME’s Most Influential People of 2021, was born in Ethiopia, attended Mount Holyoke University, worked as a commodities trader on Wall Street and left to start Gro to use technology to address challenges like hunger and climate change. Today, Gro works with governments and major food companies, analyzing hundreds of trillions of data points from satellites, governments and private sources, to forecast the supply of agricultural products around the world.

In recent months, as the war in Ukraine raged, Gro’s systems began reporting issues that put increasing numbers of people at risk of going hungry. Some have been made worse by the war, but many others have been built longer, due to the actions of other governments banning exports or imposing tariffs. Menker spoke to TIME shortly after briefing the UN

(This interview has been condensed and edited for clarity.)

Gro shows that 400 million people have become food insecure in the past five months because the price of staples like wheat, corn, soybeans and palm oil have risen dramatically. Is there a simple way to explain what happened?

All of them are driven by different things, but I break them down into five major crises that are happening, each of which on its own would actually be considered significant. The five handsets are truly unprecedented.

The first is that the price of fertilizers has increased threefold over the past two years. This is driven by a combination of factors. The war obviously adds fuel to the fire, but there is a problem with the availability of natural gas. There are sanctions, and then there are logistical bottlenecks to get out. So even though fertilizers are not sanctioned by Russia, it is quite difficult to get anything out of Russia. So it’s a confluence of things.

Your second is the climate. The wheat-growing regions of the world are facing the worst drought they have seen in the past 20 years. And so, climatic shocks continue to harm production and productivity. Think of these two things as a kind of starters.

Then, from a production perspective, you have a cooking oil crisis. The price of palm oil has been multiplied by 3 in the last two years, and this is explained by the increase in demand for biofuels. This is due to increased demand from China. Brazil and Canada experienced droughts and therefore produced less vegetable oil. And then Russia and Ukraine exported 75% of the world’s sunflower oil. Indonesia, the world’s largest producer of palm oil, has banned exports. Today they just announced that they are lifting the ban. But once you ban it, prices don’t go down as fast as they went up.

Read more: Sara Menker, CEO of Gro Intelligence, thinks big data can save our climate and our food supply

The fourth is the record low level of grain stocks in general. If you look at estimates from government agencies, we have about 33% of annual consumption needs in stock globally. We just need to move it. Our data tells us that this number is closer to 20%, or only 10 weeks of overall inventory remaining. And that’s a really big deal.

And then your final fifth is logistics. You can’t get anything from Ukraine. We’re talking about things moving by rail, but if you move everything you can by rail, you can move maybe 10%, so that’s just a drop in the bucket. And then you can’t take things out of Russia either, because of the maritime risks. The seas are mined.

If the Russian-Ukrainian conflict ended tomorrow, how much of this supply problem would be solved?

I want it to be explicitly clear that this war did not trigger this crisis. This fueled a fire that was already burning and shaking even before the COVID-19 crisis revealed the fragility of our supply chains. A crisis is therefore brewing. And the reason I frame it that way is that it’s really important for global leadership to understand that it’s not a back and forth [issue].

If the war ends, it’s better than where we sit today. But there is also a lot of infrastructure that was destroyed during the war. So you have to rebuild that and it’s not like you go right back to the volumes you were at.

How does climate change make it more difficult to manage these crises?

Climate change leads to a lack of predictability and stability in our food supply. It blows my mind when last year we were writing about how North Dakota was suffering from a record drought and its corn and soybean yields were going to drop and they did – by 24%. This week we write about how it’s too wet there and farmers can’t plant. It is climate change, this lack of predictability, this lack of stability itself that makes our food systems very, very fragile.

Then you saw record demand growth. Economic growth and population growth in places like sub-Saharan Africa and Asia where populations are still young.

You run a private company, but you have also spoken at the UN to call on the countries of the world to come together to solve the impending food crisis. Why step into this advocacy role and do you think there are solutions you can help with?

So we are a private company, but we work with financial institutions, we work with very large and very small companies. We also work with governments to help them think about food security. I started Gro to avoid something like this. I wish people had paid attention to us when we sounded the alarm in 2017. Because it’s still about preventative medicine rather than ending up in the emergency room.

We are a mission-driven company. We created this company to help address the serious challenges facing humanity. We believe businesses have a huge role to play in this, because that’s how you make them sustainable. That’s how you fund it. But you know, also, I think these are not normal times. Knowing that and saying nothing would be a crime

What could have been done earlier to prevent this?

Re-examining what agricultural trade looks like is a very big part of it. There is no version of a country that actually has all the natural resources it needs in one place. You cannot grow everything you need in one country. You actually need the world to work in a particular way, but the world has become more isolationist over the past five years – not more connected – as politics and politics have come into play. -even has undermined the diversification of business partnerships.

We could have invested a lot more in climate adaptation. It is only now that adaptation is somehow central and becoming a bigger part of the agenda. It was about transition and the risks of transition, as we live through the consequences of actions we took 20 or 30 years ago.

Were there any governments or companies that used your data to change what they were doing about food insecurity?

I can give you an example without naming a country. A country was about to ban the export of maize because the rains were not normal. But it causes all sorts of problems for people downstream, people who have contractual obligations for exports no longer honor the contracts, which creates problems with their banks.

We heard about it from one of the big institutions and we pulled the data very quickly and looked at the rainfall and they were absolutely right. It was quite dry. But we also looked at things like crop health and soil moisture and it looked healthy. It started the season with sufficient soil moisture, that the crop was drought resistant, that it had enough fuel in the tank itself.

And if you looked at the domestic prices in this country, and you looked at it in all the different cities, the prices weren’t going up, they were going down, which isn’t a signal when you’re running out of anything. So we put that together and the ban was lifted.

Where do we go from here if there are no major changes? Does the number of 400 million keep growing?

Where do we go from here? Lots of political instability in the world. Prices will not continue to rise. You’ll just start losing demand, and demand destruction means more poverty, which means more instability and a lack of economic growth. If we do nothing about this, we are heading towards a real global economic crisis and no country will be immune.

You will see that it manifests itself in so many different ways. I keep seeing Netflix headlines lose subscribers. Netflix is ​​losing subscribers because the average price of a grocery cart in America is twice what it was in April 2020. Something’s gonna give – you’re gonna buy fewer shoes – and that’s why I said that it would manifest completely independently. industries too.

Who benefits from rising prices?

Nobody. Some net exporting countries obviously earn more money. American farmers are certainly making more money from this. Does America as a country benefit? Absolutely not, because economic shocks are global. We live in a tightly-knit financial system globally, period.

So if you think about decades of economic progress and what drove it is the number of people who come out of poverty and the number of people who become consumers of all these different products of all these different businesses that are global in nature. They have their products purchased in Nairobi, Addis and Jakarta. It all starts to dwindle, and no one wins. That’s why I really think there has to be some level of tough decision-making about the right actions to take.

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