The Impact of COVID-19 on Food Value Chains
The human race is not new to pandemics. In fact, in the course of history, we have experienced many of them. The crossroad for them all is usually the negative effects left to the detriment of economies around the world.
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The food value chain, one of the most significant areas of the economy, is not left out. From the farm to the consumer’s plate, the ever-lurking Covid-19 has had an impact. It’s incredible how supply chain stakeholders all across the world have been able to recoup their positions in order to continue providing food. According to the OECD Policy Responses to Coronavirus (OECD), this is especially true in the industrialized world. Don’t get it wrong: some food value chain difficulties still exist as a result of Covid-19’s lingering effects on production on the farm, processing of food, transport and logistics, and consumer demand.
The demand for a flexible calculated risk global trading system, where industries can get commodities from new sources when conventional ones are compromised, has never been felt like it has during this period. Also, policymakers, according to OECD, have been able to avoid “the mistakes made during the food price crisis of 2007–8, and have also taken a range of other steps which have helped ensure the continued functioning of food supply chains” (2020).
Many components of Food Production, particularly labour, were affected. Crop farm production normally necessitates a significant amount of labour. Fruits and vegetables are good examples, although cereals normally don’t require exhaustive labour. The restriction on the movement of people reduced the accessibility of labour for many farm tasks in countries around the world.
Other farm production input aspects like pesticides, seeds, and fertilisers were not left out. The seed sector surprisingly didn’t really take a hit as that economy is highly developed internationally but experienced some shortages because seeds are usually transported by air, a mode of transport that was severely affected by Covid-19.
Before China, one of the major suppliers of pesticides, came out of lockdown there were fears of a price increase of pesticides but those fears faded as they gradually eased out of lockdown. According to the Agricultural Market Information System, general fertiliser accessibility has not been a problem, but there have been a few logistical challenges due to transportation difficulties.
Although vital to protect the health of the people, emergency containment measures have contributed to the decline in consumer spending power to a serious worldwide recession (Alliance for Green Revolution in Africa, 2020). In Sub-Saharan Africa, most of these increases in poverty will occur.
This trend has already had terrible effects on food and nutrition security. From February to June 2020 alone, the number of persons with extreme food safety jumped to 45 million (Science Direct, 2021). However, the Regional Transport Transit Facilitation Cell (RTTFC) drafted a short-term action plan, ensuring that food and basic items reach those most in need in the Southern African Development Community However, the Regional Transport Transit Facilitation Cell RTTFC prepared a short-term action plan to ensure that food and essential elements reach the people in the Southern African Development Community who would be affected most (Trade Economics, 2020).
“COVID-19 has led to disruptions in Food Processing industries, which have been affected by rules on social distancing, labour shortages due to sickness, and lockdown measures to contain the spread of the virus” (OECD, 2020). Constricted work environments, such as warehouses, may result in lower efficiency due to necessary Covid-19 protocols such as social distancing, as not all workers can be allowed in the space. In fact, a large number of meat processing companies in the worst-affected regions of France reported a 30% reduction in labour availability (Cerou, 2020). In spite of this, the impacts of the rigorous Covid-19 norms have steadily dissipated as countries have slowly withdrawn from them.
Different aspects of the Transport and Logistics sector were affected in different ways, resulting in a variety of effects. Bulk shipments suffered one of the most negative consequences, and bulk freight prices in 2020 were near their lowest levels in years (Agricultural Market Information System, n.d.)
Not surprisingly, transportation by air was the most affected. Its capacity was down 26% lower than during the same period in 2019, with the largest decline in capacity on routes between Europe and Latin America (with declines of more than 80%). This sharp decline was obviously caused by the travel restriction of air passengers (Accenture, 2021). In 2020, over half the air traffic Africa received in 2019 was lost, and so was half of the sector’s jobs rendering an effect of a USD 6 billion passenger revenue reduction. Also, a survey on the economic impact of COVID-19 showed that the food value transport and logistics sector in Africa was to experience a 41–50% reduction in revenue (Baker, 2020). While commercial road transportation has recovered significantly in 2021, it has also experienced a sharp drop of about 50% globally. (Sixfold, 2020).
The Covid-19 virus drastically altered how people obtain food. At least when it was at its peak. From being unable to make restaurant reservations to obtaining raw materials for the preparation of food for work and other outings. Consumers were put under more pressure to keep desired food commodities stocked, to obtain the ‘right’ food commodities at all times, and to prepare them for consumption at all times. This had a significant impact on “food away from home” operators (hotels, restaurants, catering, and cafés), as patronage and thus revenue “fell to practically zero as lockdowns were enforced” (OpenTable, 2021).
Fortunately, the imposed restrictions were effective, as many parts of the world reopened after a month or two of total lockdown. This has aided revenue generation, but it has not fully recovered, as the United States, a major contributor to the global restaurant market, is experiencing a 13.74 percent decline as of April 2021 (Lock, 2021).
Conclusion
Yes, the food value chain is recovering from COVID-19’s devastating effects, but its impact on jobs and livelihoods has remained relatively unchanged. “Especially in developing countries, where social safety nets are less well-developed” (OECD, 2020). According to Azim Premji University, “37% of the farmers in India were unable to harvest, 37% of the harvest was sold at reduced prices, and 77% of the households surveyed consumed less food during the nationwide lockdown” (Das & Mohanty, 2021). This had a significant impact on farmers, as some were losing money and others were completely in debt due to the loans they were using to run their farms.
The majority of farmers in the United States suffered significant losses as a result of perishable agricultural items such as milk, apples, and cabbages. A study reported by Aday and Aday (2020), stated that “70% of consumers reduced the frequency of shopping. This resulted in those farmers into perishable agricultural produce production making losses as the market was performing below the expected due to prohibition of the common marketplace.”
Farmers in Zimbabwe were losing money due to perishable products during the lockdown, and it was clear that an extended lockdown would have a more devastating effect. Due to travel restrictions, all farmers who exported produce to neighbouring countries saw their produce spoil (Taylor & Francis Online, 2021).
During the lockdown periods, the world experienced a recession, with many people losing their jobs and facing a lack of income. “Social safety nets and food assistance programs are thus essential to avoid an increase in hunger and food insecurity” (OECD, 2020).
The pandemic’s impact on food systems, which is still being unravelled, has yielded a number of lessons. A flexible risk calculated global trading marketplace has been realised as essential to ensuring that food is distributed smoothly along supply chains and that it can reach its destination.
When transportation or logistics issues arose, it became clear that food chain enterprises must be able to react quickly when certain sources of input are threatened by being open to alternative sources of input. “Finally, meeting the needs of vulnerable groups requires attention to food access, such as ensuring targeted, flexible safety nets” (OECD, 2020).
Now, more than ever, it is crucial to build a more resilient value chain, particularly in Africa to guard against future disruptions. Doing this requires a collective effort which makes now the best time to get involved in agriculture in order to help the industry recover from the effects of Covid-19 as quickly as possible. What better way to do that than to become a Digifarmer on Complete Farmer and farm from the comfort of your own home while we take care of the entire farming process, from step-by-step farm setup to finding reliable buyers for your farm yield after harvest?
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With nothing more than a few taps on your mobile device, you can help feed the world while helping to build a more resilient food value chain in Africa.
References
OECD Policy Responses to Coronavirus. (2020, June 2). Food Supply Chains and COVID-19: Impacts and Policy Lessons. Retrieved from https://www.oecd.org/coronavirus/policy-responses/food-supply-chains-and-covid-19-impacts-and-policy-lessons-71b57aea/
Agricultural Market Information System. (n.d.). Retrieved from http://www.amis-outlook.org/
Cerou, M. (2020, June 1). Covid-19: The meat sector under pressure. Retrieved from https://www.processalimentaire.com/vie-des-iaa/covid-19-la-filiere-viande-sous-tension?sso=1590405164
Accenture. (2021, August 6). COVID-19: Impact on air cargo capacity. Retrieved from https://www.accenture.com/us-en/insights/travel/coronavirus-air-cargo-capacity
Sixfold. (2020, April 22). Covid impact on logistics — share of idling trucks almost triples. Retrieved from https://sixfold.com/news/covid-impact-on-logistics-share-of-idling-trucks-almost-triples
Open Table. (2021, August 11). The restaurant industry in recovery. Retrieved from https://www.opentable.com/state-of-industry
Lock, S. (2021, April 27). Year-over-year daily change in seated restaurant diners due to the coronavirus (COVID-19) pandemic in the United States from February 24, 2020 to April 25, 2021. Retrieved from https://www.statista.com/statistics/1104362/coronavirus-restaurant-visitation-impact-us/
Das, K. & Mohanty, B. (2021, March 1). The impact of COVID-19 on smallholder farmers in India and the way forward. Retrieved from https://www.theigc.org/blog/the-impact-of-covid-19-on-smallholder-farmers-in-india-and-the-way-forward/
Taylor & Francis Online. (2021, April 27). The impact of COVID-19 on agricultural extension and food supply in Zimbabwe. Retrieved from https://www.tandfonline.com/doi/full/10.1080/23311932.2021.1918428#
Belton, B. et al. (2021, July). COVID-19 impacts and adaptations in Asia and Africa’s aquatic food value chains. Retrieved from https://www.sciencedirect.com/science/article/pii/S0308597X21001342#bib7
Alliance for Green Revolution in Africa. (2020, October). A Rapid Analysis of the Impact of the COVID-19 Pandemic on Selected Food Value Chains in Africa. Retrieved from https://agra.org/wp-content/uploads/2020/12/Africa-Covid-19-Country-Rapid-Analysis-Synthesis-Report.pdf
Baker, P. (2020, May). The Impact of COVID-19: Reflections on the Transport and Logistics Sector. Retrieved from https://www.tradeeconomics.com/iec_publication/impact-covid19-transport-logistics/
