Russia’s major heat wave – the worst in over 130 years – is the latest example of extreme weather having a significant economic impact on the global agriculture sector. Droughts and forest fires have caused a wheat crop crisis in Russia, raising global prices by nearly 70% and promptin President Vladimir Putin to ban wheat exports entirely.
Similar scenarios are playing out elsewhere in the world. Droughts in Kansas, for instance, have killed off over 2,000 cattle and flooding in Pakistan has destroyed thousands of acres of crops.
“Over the whole globe all these changes in climate… are going to cause some real ripples in our capabilities of producing food,” warned Jerry Hatfield, laboratory director at the U.S. Department of Agriculture’s Agriculture Research Service.
Analysts at HSBC warn that if countries cannot not adapt to higher temperatures and more extreme weather, grain production in G20 countries may fall 8.7% by 2020. With population growth taken into account, HSBC predicts G20 per capita grain production could drop between 11.9% and 16.1% by 2020.
Reduced output could “create havoc” in agricultural markets around the world, driving up the price of food and other essential goods. There is grave concern that price spikes could result in unrest in many poor or resource-scarce countries similar to the riots that took place during 2007-2008, when global food prices spiked based on rampant market speculation.
Watch video of air pollution from Russian fires – released by NASA