In its report on the food crisis, the IMF announced that food security is in danger due to the sharp increases in prices. The report noted that around $50 billion is needed to eradicate acute food insecurity this year and warned that this figure may increase in the long run.
An IMF research paper estimated that the 48 countries most exposed to food shortages face a combined increase in their import bills of $9 billion in 2022 and 2023 due to the sudden jump in food and fertilizer prices caused by Russia's invasion. This will erode reserves for many fragile and conflict-affected states that already face balance-of-payments problems after a grinding pandemic and rising energy costs, the IMF said.
"For this year alone, we estimate that highly exposed countries need as much as $7 billion to help the poorest households cope," IMF Managing Director Kristalina Georgieva and other IMF officials said in a blog posting.
The war has worsened a food crisis that has been growing since 2018, due partly to the increasing frequency and severity of climate shocks and regional conflicts, they said.
The Fund called for a rapid increase in humanitarian assistance through the World Food Programme and other organizations as well as targeted fiscal measures in affected countries to aid the poor. But it said governments needed to prioritize fighting inflation.
"Near-term social assistance should focus on providing emergency food relief or cash transfers to the poor, such as those recently announced by Djibouti, Honduras and Sierra Leone," Georgieva said.
The Fund also called for eliminating food export bans and other protectionist measures, citing World Bank research that these account for as much as 9% of the world wheat price increase.
Improved crop production and distribution, including through increased trade finance, is also vital to addressing the current food price shock, the Fund said. It added that investments in climate-resilient agriculture, water management and crop insurance are also needed to cope with drought and other unpredictable climate events.