Beirut’s port explosion was a huge blow to Lebanon, costing the country’s already battered economy a repair bill of over $15 billion.
Importing about 80 percent of the country’s goods, the capital’s port is a key economic artery for Lebanon. Roughly three-quarters of imports go through the port, including food items. In addition, the port’s 120,000-ton capacity grain silo—the only in the country—was destroyed, worsening a looming food crisis that has continued to worsen in tandem with the economy.
In less than a year, the Lebanese lira has devalued by roughly 80 percent, crippling the supply of food and primary materials needed to produce food. This has led food prices to skyrocket for both suppliers and consumers, including for items as basic as bread.
Lebanon’s spiraling import economy
Lebanon’s agricultural sector makes up only a miniscule fraction of the economy, accounting for about 5 percent of the country’s GDP and 8 percent of the labor force.
Local wheat production for bread only satisfies about 10 percent of consumption demand. Most of Lebanon’s wheat thus comes from imports, which have been increasing in the years preceding the economic crisis of late 2019. The combination of both imported and exported wheat along with government subsidies kept the price of bread fairly stable at 1,500 Lebanese pounds, exactly $1 at the official rate.
But this has changed following the country’s economic crisis and currency decline, which hindered the ability of Lebanon’s mills to import the country’s wheat supply. Intermittent wheat shortages in recent months forced bakeries to implement purchase limits to prevent hoarding. The situation was so concerning that the already cash-strapped government considered importing wheat (80,000 tons) for the first time in six years. It was therefore unsurprising that the Lebanese government eventually raised the price of subsidized bread by one-third, reaching 2,000 pounds.
The Beirut blast was an additional blow to Lebanon’s already concerning food crisis, with the economy minister admitting, just days after the blast, that the country had less than a month of grain reserves. And while the minister said there was enough flour and food assistance coming in to avoid a crisis, news had surfaced recently that Lebanon’s Central Bank only had the financial capacity to subsidize grain and other key imports for just three months.
A small slice of the country’s crisis
While Kuwait promised to rebuild the grain silo at the Beirut port—with humanitarian aid, including food parcels, flowing into Lebanon—the country’s food security crisis continues to pose a great threat on a battered population, as food prices continue to skyrocket.
Back in April, Prime Minister Hasan Diab warned against price hikes that reached as high as 70 percent. Today, inflation of food prices has gone up to over 336 percent—and those numbers are from the state-run Central Administration of Statistics.
Significant structural economic reforms are necessary to alleviate Lebanon’s food security and sovereignty crisis in the short-term, but its long-term solution is tied to its wider economic problem. Since 1990, and following the end of the country’s 15-year civil war, Lebanon’s post-war reconstruction transformed the country’s economy into one that became service-based, depending largely on banking, luxury tourism, and real estate. Its productive sectors, notably industry and agriculture, received far less economic investment and slowly phased out as imports took center stage.
One example is Lebanese apples, one of the largest sectors in the country’s agricultural industry. Prior to the civil war in 1975, Lebanon produced some 200,000 tons of apples per year— a top supplier in the region. Between 1990 and 2001, those numbers fluctuated at around 100,000 tons, much of which failed to meet international standards for export. By 2019, numbers dropped to around 30,000 tons, as half-hearted media campaigns by the Agriculture Ministry–such as the National Lebanese Apple Day–failed to increase domestic and regional demand for local apples.
The rapid decline in local food production and soaring food prices are more than just an inconvenience for Lebanon’s population, as poverty and unemployment rates continue to swell at an alarming rate. In November 2019, the World Bank feared 50 percent of the population could be living in poverty as a result of the economic crisis. Yet, recent numbers from UNESCWA revealed that poverty rate has already worsened as of May, with 55 percent of the population now living in poverty. The economy minister expects that number to reach 60 percent by the end of 2020. Another startling fact from the UNESCWA report indicates an alarming increase in extreme poverty from 8.1 percent in 2019 to 23.2 percent as of May.
The Lebanese government is cutting public spending at a time when it needs to re-allocate funds into public goods. Rather than cutting services, the government ought to cut public sector waste and use that to invest into productive sectors of the Lebanese economy, including agriculture. While Lebanon also relies on importing fuel and medicine, it should at least look at a lasting solution to its food security crisis, one that would entail a redistribution of public money with a focus on bolstering local industries. This would not only create jobs in productive sectors and stimulate the local economy; it would also guarantee that the population wouldn’t have to worry about going hungry at one point or another.
The international community can also play a crucial role in alleviating what could be a devastating food crisis. The World Food Programme increased its capacity in Lebanon following the explosion and delivered shipments of food parcels for affected families. While this short-term response is important, international support must also have a long-term vision that focuses on food sovereignty, boosting local production, and bolstering labor rights.
An example of this is the recent calls by Michael Fakhri, a U.N. special rapporteur on the right to food, on the International Fund for Agricultural Development to help establish a “national development agricultural bank,” which would help Lebanese farmers with sales–both locally and regionally. This would also help the population at large cope with the burden of the country’s worsening economic crisis. A boost in production with this kind of support, he argues, would also set up “long-term stockpiles” of essential food that could then be provided for free or at subsidized prices.
Lebanon is not famished as some tabloids claim, but to experience a food security crisis with no clear vision to alleviate it is a cause for concern.