Imagine a blight that killed off the grasses and grains. This is not an unheard off event. Mutant spores, molds, and diseases have killed off a wide variety, even who classes, of plants in the real world. Something that kills off grasses, sounds like science fiction (and the premise has been used in many 'end of the world' movies and stories), but it is very applicable to a fantasy world... especially because they are mostly agrarian.
First, the human population will go away. Most human peoples have a society based upon grain. Humans need grain for food, for beer, and for feed. So the lowest level of the human society will soon disappear due to starvation. That will have echos up the social change, as there will be no grain food for others, and very few left to grow other things.
Secondly, without grasses and grains, many herbavores will be starving as well. Most forest and plains herbavores will be without much in the way of food. After a big boom to the carnivore population, (which will then even out), the entire food web will shake and begin to collapse. New nitches will be carved out by animals eventually.
Thus the hunting people (including the Elves) will find themselves without game. Gathering people will have issues as well.
Population near the sea or waterways might do better, as they can have protein and food not based upon grain. Inland societies might trade for sea based food, but there are limits to how far the food can go.
On Arth, this is a non issue. The Biomic nature of the world prevents this from being a world wide catastrophy. There are no microbes on the planet. While there are molds and spores, molds and spores can only exist in their native biomes (normally). Mass die off of plants... and the related species... would be corrected by a biome pylon no matter how many keys had been removed or added. If it slowly became the way of a biome, the disaster would not spread to any other biome.
On Kerren, grasses are not very developed yet. Herbavores munch upon bushy, fern like things. Grassy plains have really yet to develop on Kerren. The Humans who have been trying to develop native grains would be quite put out.