Food Security within the Global Risk Matrix

The rules of political survival call for the governments meeting at the G20 summit in Paris on February 18 to improve food security. While the scandal of almost one billion people worldwide affected by chronic hunger persists, it is the political risk of food riots that might give the matter a new priority. Various factors are currently driving up food prices, similar to the situation in 2008. Then, food price inflation resulted in social unrest breaking out in more than 50 countries. Price volatility for agricultural commodities is generally seen as a serious threat to governmental stability.

Measures taken by the G20 to curtail the risks attached to food issues will have to be assessed in view of the complexities of food security, characterized by multiple causal relations to other risk areas. The following outline will place the issue of food security within the wider context of the Global Risk Matrix. Developed by the Berlin Risk Institute’s independent research program, the Global Risk Matrix forms the core of a new database for risk assessment and management.

The table attached below is a non-exhaustive extract from the Global Risk Matrix featuring 11 risk domains of global relevance and inter-regional impact. In addition to Food Security, other domains include Climate and Environmental Risks, Energy Supply, Water Scarcity, Population and Demographic Changes, Underdevelopment, International Governance and Economic Regulation, Health Risks, Regime Risks, Organized Crime, and Conflict Risks. The Global Risk Matrix is unique, because it considers each risk domain both as an independent variable (IV) and a dependent variable (DV). In combining these eleven risk domains, the Global Risk Matrix altogether consists of 121 cells with specific risk effect entries defining causal relationships between the individual domains. This risk display is well suited to monitor the development of related risks over time as well as to promote integrated risk management seeking to take control of unwanted side-effects, too.

The matrix extract regarding the placement of food security within the global risk domains can be read in two ways. The risk domains listed in the first column are risk drivers (IV) in relation to food security, which is the risk object in the second column (DV) — including a feedback loop for food risks. Apart from that, the issue of food security is also a risk driver;  view the third column in relation to the first column and see how the other domains are turned into risk objects.

Table: Food Security within the Global Risk Matrix

Global Risk Domains
connected to Food Security as independent variables [→ 2nd col] and/or dependent variables [← 3rd col]

Food Security

as dependent variable
[1st col → 2nd col]

Food Security
as independent variable
[3rd col → 1st col]
Climate and Environmental Risks Extreme weather events (droughts, floods, storms) due to climate change endanger harvests in various world regions; environmental degradation (erosion, salination of soil) threatens sustainable agriculture
Deforestation in order to extend farmland increases the concentration of carbon dioxide in the atmosphere and contributes to climate change; food and livestock production emit greenhouse gases
Energy Supply Generation of bio-fuels competes with food production and may contribute to the rise and volatility of food prices; higher energy prices drive up food prices Production of fertilisers and pesticides as well as the transportation of food involve high energy consumption
Water Scarcity Lack of access to water or to efficient irrigation technology affects agricultural productivity Water-intensive agriculture leads to the depletion of non-renewable water resources, such as aquifers, in some areas
Population and Demographic Change Rise in global population size results in increasing pressure on food supply; urbanisation drives competition for land Hunger and starvation reduce live expectancy and force migration
Food Risks
[feedback loop]
Dietary changes with more meat consumption will increase competition for scarce land and put pressure on grain farming; high waste rate impedes sustainable food supply; new technologies in agriculture, such as genetically modified crops, may entail new bio-risks
Underdevelopment Population with low income and purchasing power is highly vulnerable to rising food prices Malnutrition and hunger reduce productivity of the working population
Health Risks Pests and diseases threaten crop yields and might require culling of livestock Lack of nutrients causes physical and mental impairment; over-consuming causes cardiovascular disease and diabetes; some animal diseases can infect humans (‘bird flu’)
Governance and
Economic Regulation
Export restrictions drive up food prices in times of shortages; speculation on the food market is suspected to increase volatility; lack of international governance allows for overfishing Agricultural subsidies and trade barriers distort fair international price-building; international land-purchase and leasing agreements affect market access for smallholder farmers
Regime Risks Autocratic regimes are less willing or capable to protect the population from famine; poor government may entail insufficient infrastructure and storage to ensure food safety Food shortages and rises in food prices can cause social unrest and popular uprisings against governments
Organized Crime Corruption can affect food production and supply, including artificial shortages to drive up local prices; criminal neglect of hygienic standards or contamination may affect food processing The cultivation of illegal drugs competes with food production in some regions and sustains organized crime
Conflict Risks In areas of armed conflict the agricultural use of land is impaired, even for an extended period due to mines in the ground Competition for farmland can induce armed conflict and civil war
© Dr. Carsten Giersch, Berlin Risk Institute, 2011

For example, the projected rise in world population to about nine billion by 2050 will further increase the demand for equitable food supply, also exacerbating the competition for limited agricultural land. What does that mean for future conflict risks? Competing territorial claims are a major driver of ethnic conflict, which can easily escalate to civil war. Armed internal conflict over farmland will most likely lead to starvation and forced migration of refugees involving demographic risks with a strong regional impact. With respect to the problem of farmland limitations as a major issue of food security, one also has to consider the loss of land for food production due to climate change or environmental degradation, or due to other uses, such as the production of biofuels in order to meet energy risks. The spreading practice of countries buying or leasing farmland abroad might add to local land competition.

Another example is the already mentioned risk that comes with price volatility. Rising food prices are not bad per se, because they also incentivise farmers to grow more. However, high volatility of food prices is a problem, affecting the already poor and therefore most vulnerable parts of the world’s population. High price volatility usually results from combined risk effects originating form various risk domains. Climate effects such as droughts are involved, inflation of energy prices, export restrictions of large food producers, bad regime governance regarding storage and transportation are among the drivers. People do not starve because of a lack of food, but because they are poor and lack the income necessary to buy food at increasing costs (an important differentiation made by Nobel-prize winning economist Amartya Sen). The lack of safe access to sufficient food, in turn, has serious negative effects on various other risk domains, of which health, regime and conflicts risks are the most prominent.

The added value of the matrix approach consists of specifying the causal relationship between various risk effects, as outlined in the single cells. It is also particularly useful for targeted and tailored assessment of regional risks, or of different time horizons for action, be it emergency scenarios and response, or long-term risk prevention and management.

In the future, operational risk assessment tools that allow for complex impact control will become ever more important for decision-makers who aim to enact food security reforms. The topic has gained a high political priority internationally. Comprehensive and sophisticated research is available, too. The recent report The Future of Food and Farming issued in January 2011 by Foresight, the renowned research unit at the UK Government Office of Science, might serve as a major reference study for political action.

The report explores in great detail five challenges that need to be addressed at the same time in order to realize a sustainable food system: ‘balancing future demand and supply sustainably; addressing the threat of future volatility;  ending hunger;  contributing to low emissions; maintaining biodiversity’. In view of the complex tasks facing these challenges, even more data and better metrics brought together in a ‘food system dashboard’ are required, according to the report (p. 256). However, this might not be enough to solve the conflicts of interests involved in balancing the challenges. Reforming the food system and improving food security will be a matter of international negotiations, for which risk scenario and assessment tools with a more qualitative approach could provide useful assistance and guidance.