Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 04/08/2020

    Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.

    Wine barrels in a wine cellar near the town of Veles, Macedonia.
    ©FAO/Robert Atanasovski

    FOOD CHAIN DISRUPTIONS

    The European Union’s exports of agricultural and food products continue to be hampered by the tariffs imposed by the United States as a retaliation for the EU’s subsidies to Airbus. In India, on the other hand, one of the food value chain stages that were particularly affected by the effects of the coronavirus pandemic is represented by restaurants, which have been trying to find innovative solutions to provide a satisfying dining experience to customers. In China, the need to incorporate climate resilience into infrastructure planning became even more evident as the heavy floods in early July greatly impacted on different economic sectors.

    US Trade Representative urged to remove retaliatory tariffs on EU food exports

    The EU agriculture and food sector has been damaged ever since the World Trade Organization took the decision to give the United States the right to levy tariffs on EU agricultural products (such as French wine, Italian cheese and Spanish olive oil) as a retaliation for the European Unions’ excessive subsidies to the aircraft maker Airbus (in the form of low interest rates). In the United States, however, a bipartisan coalition of House members has recently asked the US Trade Representative to remove such retaliatory tariffs.

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    Indian restaurant owners are developing innovative solutions to provide safe dining experiences

    The coronavirus pandemic has impacted the restaurant business in several ways, and in the last three months alone, many restaurants in India have closed their businesses permanently. This has led owners to completely rethink the service they provide to customers, who have become extremely cautious when it comes to eating outside. Innovative solutions that support the creation of a safe dining experience include providing paperless menus and developing cloud kitchens, which are cooking facilities that provide food only for delivery, without any customer facing areas.

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    Productivity in Chinese agriculture and other sectors affected by severe floods

    The severe floods that hit China in early July resulted in 875,000 emergency resettlements and in economic losses amounting to around CNY 41.64 billion. These losses add up to those already caused by climate-related disasters between 1998 and 2017, for a total of around USD 2.2 trillion. The growing impact and frequency of such phenomena highlight the need for China to incorporate climate resilience into infrastructure planning, as productivity in many sectors of the country’s economy (including agriculture) has been greatly affected.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    New Covid-19 containment measures following the increasing number of cases in Australia are hampering both wine exports and meat production. More specifically, workforce in meat processing plants, warehouses and distribution centres in Victoria, Australia’s second most populous state, will be reduced by one third for around one month and a half, until the number of Covid-19 cases in the state (currently 12,335) will start to decrease.

    Australian wine exports decrease due to Covid-19 containment measures

    As a result of the Covid-19 containment measures in Australia, which forced many restaurants, cafes and bars around the world to close, the total value of Australian wine exports dropped to AUD 2.84 billion. In volume terms, overall exports dropped by 9% to 730 million litres, and the most traded wines belong to the lower price segments. The top three destinations by value were mainland China, the United States and the United Kingdom, while most of the consumers are shifting to online market, as most of the on-premise channels were shut down.

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    New lockdown restrictions limit meat production in Victoria, Australia

    After a jump in Covid-19 cases in Australia’s second most populous state, Victoria, a series of new lockdown restrictions has been announced by the state premier. For six weeks starting from 8th August, meat-processing plants, warehousing centres and distribution centres in Victoria will not be allowed to have more than two-thirds of their workforce on-site at any time, meaning that meat production in the state will be substantially reduced. For the moment, Australia has 18,729 confirmed cases of Covid-19, and 12,335 of those are in Victoria.

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    COUNTRIES' RESPONSE

    Thanks to a partnership between different Australian government agencies and the private sector, a new food traceability program in Australia will build trust in the food supply chain through data sharing among all stakeholders. In Madagascar, on the other hand, a rural development project financed by the European Union aims to increase farmers’ and fishers’ incomes by improving the productivity of their activities. More in particular, around 250,000 small-scale family farmers and fishers will be the main beneficiaries of this program.

    EU and Madagascar sign financing agreement to improve rural resilience

    The Agriculture Development Fund of Madagascar’s Ministry of Agriculture and Fishery has recently signed a financing agreement worth EUR 20.5 million with the European Union’s delegation in the country, which will support the development of the agricultural and fishery sectors in Madagascar. More specifically, this financing will activate the RINDRA program (Renforcement Institutionnel vers le Développement de la Résilience Agricole), which has the objective of increasing farmers’ and fishers’ productivity and incomes, especially now that the coronavirus pandemic is hampering their activities.

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    Australian university develops new food traceability program

    An Australian university is developing a new national program to ensure food traceability from farms to consumers and to the export markets. The framework of the program was co-designed by the Food Traceability Lab of the Deakin University’s Centre for Supply Chain and Logistics, a partnership between government agencies and the private sector that aims at providing stakeholders across the agri-food supply chain with product visibility. Thanks to this program, a technology platform will allow data to be shared with different actors throughout the supply chain.

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    REGIONAL FOCUS

    On the one hand, the European countries are investing into the development of sustainable sources of protein in animal feed, in order to allocate larger portions of agriculture lands to food crops, instead of using it to produce feed for livestock production. On the other hand, according to Science (the renowned academic journal), 20% of all soy and beef exports that reach the EU from Brazil come from illegally deforested lands, which landowners deliberately burn to turn them into livestock pastures or to use them for specific plantations.  

    EUROPE – French biotechnology company will develop insect farming model to create animal feed

    The European Union has recognised the need to find sustainable sources of protein in animal feed, because currently around one third of global arable land is used to produce feed for livestock production. Recently, the concept of using insects for this purpose has gained traction, because this would allow farmers to replace feed crops with food crops for human consumption. This year, a French biotechnology company that develops insect breeding and processing processes has received EUR 56.8 million in funding from the EU to create an innovative model of insect farming at industrial scale for animal feed, which would save 57,000 tons of CO2 per year.

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    EUROPE – 20% of all soy and beef exports from Brazil to the EU come from deforested land

    Just like last year, major fires deliberately provoked by landowners in order to create agriculture lands or livestock pastures are currently ravaging the Amazon forest. The World Wide Fund for Nature revealed in 2018 that France potentially contributed to such deforestations through its soy, cocoa, beef, palm oil, wood, paper pulp and rubber imports from Brazil, and it is not the only one: 20% of all soy and beef exports that reach the European Union from Brazil come from illegally deforested lands.  

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    AFRICA – 17% of Egypt’s agricultural land would be destroyed by Ethiopia’s GERD

    Egyptian experts expect that 75% of fish farms and 17% of Egypt’s agricultural land would be destroyed if Ethiopia filled the Grand Ethiopian Renaissance Dam’s reservoir in six years: this could lead to the displacement of around 30 million people (around one third of Egypt’s total population). A preliminary tripartite deal between the leaders of Egypt, Sudan and Ethiopia was signed in 2015, but since then there has not been any further progress.

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