Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 11/08/2020

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

    Workers cut up the beef carcass at the meat factory in the town of Slutsk, some 90 km south of Minsk.
    ©FAO/Sergei Gapon

    FOOD CHAIN DISRUPTIONS

    The difficulties posed by the restrictions to trade and movement made necessary to limit the spread of the coronavirus pandemic are still hampering the food supply chain in North America. Some of the food companies in the US are experiencing raw material shortages, which cause knock-on effects on all their activities, while Canadian traders in the agricultural industry saw the trade tensions that already existed with China and India exacerbate. In the Netherlands, a university conducted four country assessments and found out that the ones currently facing more difficulties are women and the youth, who are losing their jobs and are unable to provide enough food to their families.

    An overview of food chain disruptions caused by Covid-19 and solutions in the US

    The coronavirus pandemic continues to wreak havoc on the US food supply chain. As is now well-known, livestock farmers had to keep their pigs under the weight limits because they could not sell them to meatpacking plants (many of which closed in the US, because of the growing numbers of Covid-19 cases in such environments), and the whole industry experienced shortages. The food companies, on the other hand, had to deal with the shortages of raw supplies. Some of the solutions to these disruptions include varying supply chains geographically, keeping raw materials in stock and revising sick policies to incentivize workers to stay at home if they don’t feel well.  

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    Trade tensions prompted by Covid-19 pandemic affect Canada’s agricultural industry

    Trade tensions have been heightened worldwide by the effects of the coronavirus pandemic, impacting on different economic sectors, including Canada’s agricultural industry, which was growing faster than any other sector in the country’s economy and now it has to adapt to these issues. Before the pandemic, after two years of trade-related disagreements in the agricultural sector between Canada and China, India and the US, trade relations seemed to be improving, but when ensuring food safety became the top priority for many countries, most of them banned their exports to protect the food supplies. However, Canada is still in a good position, as many countries depend on its agricultural exports to feed their populations.

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    Food systems in Mali, Kenya, Ethiopia and Bangladesh are in danger

    A university in the Netherlands conducted country assessments in Bangladesh, Ethiopia, Kenya and Mali, and identified the main challenges caused by the coronavirus pandemic that food systems in those countries are facing. It resulted that, in all of them, women and youth are the ones facing the biggest income losses, increasing the vulnerability of the families in terms of food security. Most of the women in those countries work in informal sectors, while youth with little savings are usually casual labourers. Furthermore, lockdown measures in the four countries are preventing traders and seasonal labourers from travelling and are hampering the trade in crucial commodities.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    Since food prices show no sign of diminishing in India, due to the fact that different agricultural producing states have not reduced the lockdown restrictions that are hampering the supply of fruits and vegetables, the country’s inflation rate has slightly edged up in July. On the other hand, the US’ dairy industry is experiencing low milk prices, while Australia’s reduced beef production is negatively impacting on the country’s exports (further hindered by a rising Australian dollar and by a recovering beef production in the United States).

    Australian beef exports to China decrease

    Because of the suspension of the activities of four abattoirs, Australian beef exports to China are decreasing and now amount to half of what was shipped in this period last year. Other factors include an increased competition and a strengthening Australian dollar: more in particular, the growing competition may come from the United States (where beef production is slowly recovering), and it is aggravated by the rising Australian dollar. Furthermore, panic buying continues in the state of Victoria, where new lockdown measures have been recently introduced.  

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    Low milk prices in US dairy industry

    Dairy products are classified into different categories in the United States: Class I is intended for fluid milk processing; Class II includes products like yogurt and ice-creams; Class III is for cheeses and whey; Class IV is reserved for butter and milk powders. This categorization was designed to level the prices between milk classes through a Producer Price Differential, which is usually positive. However, it is now negative, signalling decreasing milk prices in the US dairy industry.

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    Higher food prices in India drive up inflation rate

    India’s retail inflation slightly increased in July, due to the higher food prices, which account for nearly half of the inflation basket and have been growing since April due to the food supply chain disruptions caused by the coronavirus lockdowns imposed by the authorities. While the central government has gradually eased such restriction measures in June, the regional lockdowns in many agricultural producing states (such as West Bengal) continue to disrupt the supply of perishable items like fruits and vegetables. Analysts expect food prices to decrease starting from September.

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    COUNTRIES' RESPONSE

    In Ghana, an agro-based organization has recently managed to organize the Second Women in Food and Agriculture Leadership Training Forum in the Ashanti Region, during which several women farmers were rewarded for their efforts in ensuring gender sensitivity in the agricultural value chain. In the United States, on the other hand, a senator has introduced a bill that aims at rewarding essential workers for the fundamental part they played in the Covid-19 response, such as nurses, grocery store workers, truck drivers and child-care providers.  

    Ghana’s Minister of State for Agriculture stresses importance of gender sensitivity in agriculture

    Ghana’s Minister of State for Agriculture has recently stressed the need to remove the socio-economic barriers that currently hamper women’s active participation in the agricultural value chain, and therefore to ensure gender sensitivity and an equitable distribution of resources to strengthen women’s contribution and boost productivity in the sector. Thanks to Canada’s and Absa Bank Ghana’s support, the Agrihouse Foundation has recently managed to give the opportunity to 15 women farmers in Ghana’s Ashanti Region to be awarded with plaques, citations and boxes of liquid fertilizer, putting emphasis on what the Minister of State for Agriculture stated and providing an initial example of women farmers empowering.

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    US senator introduces bill to reward essential workers

    A US senator has recently introduced a new bill to allow essential workers on the front lines of Covid-19 (nurses, truck drivers, grocery store workers, child care providers) to keep more of their incomes by suspending federal income taxes for them, up to an annual income cap that would be set at the highest level of pay for an enlisted person in the US armed forces. Furthermore, the bill would provide the suspension of federal payroll taxes for essential workers that earn up to USD 50,000 annually.

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    REGIONAL FOCUS

    While African countries need to focus on cold chain development, which is fundamental to ensure both decent food security levels and a future efficient distribution of the Covid-19 vaccines (according to the World Health Organization, 50% of all vaccines lose effect due to insufficient or incorrect temperature control practices), countries in the Asia Pacific region should invest more efforts in the digitalization of the food supply chain. Digital improvements to farming operations, for example, would ensure the flow of raw agricultural ingredients and maintain stable food security levels during a crisis (such as the one prompted by the coronavirus pandemic).

    AFRICA – African countries need to focus on cold chain development

    Sustainable cooling is a development challenge that has not received as much attention as it should in Africa: in fact, a Covid-19 vaccine that requires cooling will also require an expansion in cold supply chains, meaning that not focusing enough on this issue would threaten the most vulnerable in the continent. Vaccine cold chains were already insufficient prior to the pandemic (the World Health Organization estimates that around 50% of all vaccines are wasted due to insufficient temperature control), and they should be developed also because they serve other purposes, such as nutrition: a lack of access to cooling may encourage people to prioritize cheaper, less nutritious foods, for example.

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    ASIA – Panel of experts discusses digital supply chain transformation in Asia Pacific

    An expert panel consisting of technology and food service firms’ representatives and a UN Development Programme’s representative has recently stressed the importance of focusing on digital supply chain transformation in the Asia Pacific region, in order to ensure resilience and sustainability post-Covid-19.  Digital farming and traceability technologies, for example, help countries maintain decent food security levels, while farm management technologies may ensure the achievement of higher crop yields and ensure the optimization of raw material inputs and costs. For what concerns sustainability, on the other hand, limiting single-use plastic packaging is paramount.

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