Presentation prepared by Xinshen Diao, Paul Dorosh, Pauw Karl, Josee Randriamamonjy, James Thurlow, and John Ulimwengu, all with the International Food Policy Research Institute, Washington, DC. This is part of the Global Crisis Country Series.

1. Version: 28 June 2022
Democratic Republic of the
Congo
Impacts of the Ukraine and Global Crisis
on Food Systems and Poverty
Xinshen Diao, Paul Dorosh, Pauw Karl, Josee Randriamamonjy, James Thurlow, John Ulimwengu
International Food Policy Research Institute, Washington DC
These country studies are conducted by IFPRI with financial support from
BMGF, FCDO, and USAID. All studies use data and models developed with
ongoing support from BMGF, USAID and the CGIAR’s “Foresight and Metrics”
initiative. The DRC case study benefits from the knowledge about fertilizer
adoption provided by several agronomists from National Agricultural Study and
Research Institute (INERA), DRC.
Xinshen Diao (x.diao@cgiar.org) | Paul Dorosh (p.dorosh@cgiar.org) | James Thurlow (j.thurlow@cgiar.org)

2. Version: 28 June 2022
Overview
• Series of country case studies
• Economywide modeling
• Capture world market shocks
• Estimate impacts on economy, agri-food
system, poverty, food security, etc.
• Simulate policy responses
• Three phases of analysis:
1. Initial data collection and impact assessment
2. Data revisions and analysis of broad policy options
• Cash transfers, food aid, and fertilizer subsidies
• Fiscal implications for national governments
3. In-country engagement and tailored policy analysis
Impact
assessment
Policy
analysis
Country coverage
Countries with IFPRI RIAPA models
May June
July
USAID-AGRILINKS links for all briefs and slide decks
https://www.agrilinks.org/activities/ifpri-analyses-country-level-impacts-high-food-fuel-and-fertilizer-prices

3. Version: 28 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations World Price Shocks
Source: World Bank Pink Sheets
Global data
11%
-13%
100%
56%
34%
88%
101%
Maize Rice Wheat Palm oil Crude oil Natural gas Fertilizer
Change in real world prices (June 2021 to April 2022)
30 Jun 2021 - 31 Jan 2022 31 Jan 2022 - 30 Apr 2022
30 Jun 2021 - 30 Apr 2022

4. Version: 28 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Supply and Demand
Supply
(% by source)
Demand
(% by use)
DRC data
Source: IFPRI DRC RIAPA Model
100% 99% 93%
7%
100%
Maize Rice Edible oils Oil products
Imports
Domestic
52%
44%
9%
67%
48%
56%
91%
4%
29%
Maize Rice Edible oils Oil products
Exports
Final use
Input use
+ Others = 100%
+ + +
9.3% 10.7% 1.3% 3.2%
Products’ share of the
value of total demand
throughout the economy

5. Version: 28 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Consumption Baskets
DRC data
Source: IFPRI DRC RIAPA Model
28.2% 38.2% 40.5% 44.0% 38.2%
56.2% 80.3% 75.3%
84.6%
76.6%
15.6% 19.2%
24.6%
14.9%
23.1%
All households Rural Urban Poor Nonpoor
Composition of household consumption spending
Cereals & edible oils Other foods Non-food goods & services

6. Version: 28 June 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations Fertilizer Adoption Rate
Source: Estimates based on exchanges with agronomists from the National Agricultural
Study and Research Institute (INERA), DRC
Timing When is the fertilizer needed?
DRC data
70%
2%
60%
30%
15%
50%
40%
15%
60%
60%
20%
30%
Maize
Sorghum & millet
Rice
Pulses
Groundnuts
Oilseeds
Cassava
Irish potatoes
Sweet potatoes
Leafy vegetables
Other vegetables
Plantains
Coffee
Share of cultivated land using fertilizer

7. Version: 28 June 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations
Crop Calendar
Source: FEWSNET DRC
Timing When is the fertilizer needed?
Planting for DRC’s 2022 main season is already underway
DRC

8. Version: 28 June 2022
Results | GDP and Employment
• National GDP and employment decline
• Negative terms-of-trade shock
(i.e., negative effect of higher import prices outweighs positive
effect of higher export prices)
• Rising import costs reduces spending on
domestically produced goods
• Falling production leads to job losses
• GDP impacts mainly on agri-food system
• Employment fall in both agriculture and
nonagriculture
• Agri-food system GDP and employment fall more
• GDP declines in both primary agriculture and off-
farm agri-food sectors (e.g., processing, trading)
• Larger GDP declines in agriculture
• Faster job losses in off-farm sectors, especially in
food-related services, incl. trade and transport
Source: IFPRI DRC RIAPA Model
-0.5%
-1.6%
-1.9%
-1.3%
0.5%
-5.6%
-4.9%
-2.5%
-8.8%
-7.1%
-10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Change in GDP and employment due to food, fuel
and fertilizer shocks (%)
GDP Employment

9. Version: 28 June 2022
Results | Drivers of GDP Losses
• Fertilizer shocks are the main driver of the decline in
national GDP
• The country exports a small amount of crude oil
• Fertilizer shocks are also the main driver of the decline
in agri-food GDP
• Fertilizer directly affects primary agricultural production
• Disrupts downstream processing via supply chains
• Off-farm also adversely affected by higher fuel and food
prices, which raise the cost of food processing and food-
related services
• Modest GDP gains outside the agri-food system driven
by fertilizer shocks
• The negative terms of trade effect from the fertilizer
shocks lowers prices for domestic trade and transport
services, which lowers trade margins for DRC main export
sectors and increases their exports and production
Source: IFPRI DRC RIAPA Model
-0.2%
-0.1%
-0.2%
-0.1%
-0.1%
-0.4%
-1.2%
-1.7%
-0.9%
0.3%
-0.5%
-1.6%
-1.9%
-1.3%
0.5%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Percentage change in real GDP due to food, fuel and
fertilizer shocks (%)
Food prices Fuel prices Fertilizer prices & response

10. Version: 28 June 2022
Results | Household Consumption
Source: IFPRI DRC RIAPA Model
• Household consumption falls
• Larger than GDP losses as households are hit twice by rising
prices and falling incomes
• Importance of shocks differs across population groups:
• Rural and poor households affected more than urban and
nonpoor households for all the three shocks
• Fertilizer shocks important for all households and more
important for poor and rural households
• Rely more on farm incomes
• Consume more domestically-produced foods
• Food prices rank at the second and negatively affect all
household groups
• Maize is a major staple in DRC for all households. while higher
maize price benefits farmers, such gains, rising food prices offset
income gains for farmer households
• Fuel shocks affect all households similarly
• Fuel is widely used for all sectors including farming
• Modest gains from crude oil exports did not go to households
much
-0.7%
-0.8%
-0.5%
-0.8%
-0.6%
-0.4%
-0.5%
-0.3%
-0.4%
-0.4%
-1.7%
-1.7%
-1.7%
-1.8%
-1.7%
-2.8%
-3.0%
-2.6%
-3.0%
-2.7%
National
Rural
Urban
Poor
Nonpoor
Percentage change in real consumption
Food prices Fuel prices Fertilizer prices & response

11. Version: 28 June 2022
Results | Changes in Inequality
• Differential effects on poor/nonpoor households drive
changes in inequality:
• Fuel shocks causes slightly larger consumption losses for
households in the top quintiles
• Fertilizer shocks affect lowest quintile more than top
quintile, causing inequality to increase significantly
• Food prices affect all households and hurt the poor
households in the lowest quintile slightly more
• Overall, inequality rises
• Slightly larger consumption losses in the poorer
households in quintile 1
Source: IFPRI DRC RIAPA Model
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
Q1 Q2 Q3 Q4 Q5
Percentage change in quintile consumption
Food prices
Fuel prices
Fertilizer prices & response
Combined food, fuel and fertilizer shocks

12. Version: 28 June 2022
Share of population
falling into poverty
Results | Poverty
• Poverty rises
• Headcount rate up 1.3% points
• 1.14 million more people pushed into poverty
• Fertilizer shocks still are the main driver, while food
shocks become relatively more impact
• Larger increase in poverty in urban areas
• Urban poverty rate rises more than the increase in rural
poverty rate in percentage point
• Almost 50 percent of expanded poor population in
urban area
• Rural population base is large and hence it counts for
slightly more increase in the number of poor people
Source: IFPRI DRC RIAPA Model
0.3%
0.3%
0.3%
0.3%
0.3%
0.2%
0.7%
0.7%
0.7%
1.3%
1.4%
1.3%
National
Urban
Rural
Change in poverty headcount rate (%-point)
Food prices Fuel prices Fertilizer prices & response
290
136
154
226
116
106
620
277
347
1,136
529
607
National
Urban
Rural
Change in poor population (1000s)
Food prices Fuel prices Fertilizer prices & response
47%
53%
Urban
Rural

13. Version: 28 June 2022
• Food, fuel and fertilizer shocks together increase the cost of a
healthy reference diet
• Reference diet is the EAT-Lancet’s “healthy” diet thresholds for
the six major food groups
• Rising prices push up real cost of added fats (edible oil), while
falling incomes reduce demand for fruits and protein foods
(meats and fish) and thus, lower their costs slightly
• The overall real cost for a healthy diet increases modestly by
0.6%
Results | Diet Quality
Source: IFPRI DRC RIAPA Model
• Rising prices and falling incomes cause diet quality to
worsen for many households
• Prior to the crisis, few households had consumption levels and
diversity needed for a healthy diet
• Rising food prices become a dominant factor in diet quality
deterioration; together with fertilizer shocks, it causes more than
2.7 million people to become deprived in at least one additional
food group
• Rural households account for more of the deterioration in diet
quality
0.6%
-0.1%
1.0%
-0.5%
Net change in
cost of healthy
diet
Contributions of
food groups to
change
Shares of six food groups in total cost
of a healthy diet prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
8.1%
18.2%
6.0%
32.6%
30.7%
4.3%
Shares of six food groups
in total cost of a healthy
diet prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
1,441
710
725
1,121
776
2,759
1,089
1,671
National
Urban
Rural
Number of people to become deprived in at least one
additional food group (1000s)
Food prices Fuel prices Fertilizer prices & response

14. Version: 28 June 2022
Headlines
• GDP and employment lead to reductions in GDP and
employment in Kenya in DRC
• Agri-food system more adversely affected
• Agriculture is particularly at risk to fertilizer shocks, esp. if it
leads to lower fertilizer use in the current season
• Poor households are vulnerable to the shocks
• Vulnerable to all the three shocks
• Urban poverty rate rises more, while greater increase in
number of poor people is in rural area
• Food shocks cause diet quality deterioration for many people
• Next steps
• Evaluate policy options available to governments and
development partners to mitigate impacts on food systems,
poverty, and food insecurity (e.g., cash transfers, food aid,
fertilizer subsidies, fiscal support, etc.)
Impact
assessment
Policy
analysis
Country coverage
May June
July