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The February 2023 issue examined how the crisis had turned food into a security problem for more than half of Lebanon's residents. Heavily dependent on imports and lacking any agri-food development plan, the country faced currency collapse, the lifting of subsidies on wheat, milk, cooking oil and fuel, the presence of around two million Syrian refugees, the loss of the Beirut port grain silos and higher global food and energy prices. Household incomes, largely unindexed, fell far behind the cost of the minimum survival basket.
The authors identified a price ratchet effect: food prices rose with each depreciation but did not fall when the currency steadied. They attributed this to the absence of effective Ministry of Economy and Trade control, insufficient local substitutes for imports, the loss of bank credit that once financed imports, expectations of further depreciation and the obligation to price in pounds, which led retailers to apply exchange rates above the prevailing market rate.
The way forward combined a government-led, UN-assisted medium-term plan for agriculture and rural education with interim measures: factoring and reverse factoring to finance food imports and contain final prices, support for local import-substitution production, action against cross-border smuggling, and an agriculture and land bank within the banking restructuring.
Key findings
- By December 2021, 53% of residents, some 2.06 million people, needed social assistance, and 33% could not meet minimum dietary requirements.
- Lebanon imported around US$4 billion of food a year, about 55% of domestic supply, while banks never allocated more than 3% of their loans to agriculture.
- The survival minimum expenditure basket for a family of five rose from about LBP1.01 million in October 2019 to LBP7.4 million in June 2022 and an estimated LBP19 million in February 2023.
- At the time of writing the average salary covered only 24% of that basket, against 93% in June 2020, with the market rate at LBP82,000 per dollar.
Archive: written in Feb 2023; figures and assessments reflect conditions at the time of writing.Summary of the paper; the full analysis is in the PDF.