Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 14/07/2020

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

    A sack containing coffee beans is displayed in a stall in the area of Merkato, in Addis Ababa
    ©FAO/Eduardo Soteras

    FOOD CHAIN DISRUPTIONS

    In the United States, the coronavirus pandemic and the shortages it caused have determined a shift in food production and in the consumers’ preferences; moreover, the pandemic further increased government’s subsidies to farmers, which have totaled USD 32 billion this year (thus exceeding the Agriculture Department’s USD 24 billion discretionary budget). While food companies have curtailed the variety of what they offer in order to maximize their efficiency, forcing consumers to change their buying and eating habits, the government had to boost its financial support to farmers after restaurants and schools closed and producers were forced to dump their food products, resulting in heavy financial losses for farmers.

    ‘Here’s your check’: Trump’s massive payouts to farmers will be hard to pull back

    Under the current US administration, the government payments to farmers have reached a historic level (this year they amount to USD 32 billion), as they have the objective of containing the impact of both the tariff fights and the coronavirus pandemic. However, the payments could make the farmers excessively dependent on government support. Since agriculture is fundamental to the food supply, the US government has always been keen to provide subsidies to farmers, but the current trade bailout and COVID-19 relief efforts caused farm spending to double, disadvantaging other sectors.

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    Flour and Toilet Paper Are Back at N.Y. Supermarkets, but There’s a Catch

    There is not a shortage of food products in the US’s supermarkets anymore, as the empty shelves brought on by the coronavirus pandemic have been restocked across the country. However, many companies had to reduce the variety of their offerings in order to be as efficient as possible. This shift in production has curtailed the options for the consumers at the stores: this applies to flour and to some specific cuts of meat, for example.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    Some positive signals concerning the American and Swedish harvests: crop progress has been above average amidst a favourable weather in the United States, the domestic demand for almonds, walnuts and pistachios has been robust, and the wheat export activity has been strong; in Sweden, a large agricultural cooperative estimates that, despite the coronavirus pandemic, the annual harvest of grain, oilseed crops and pulses will be lower than last year’s, but overall higher than the 5-year average.

    Economic recovery in US dependent on virus control and consumer confidence

    The coronavirus pandemic dealt a heavy blow to the agricultural supply chains. However, despite the current situation, the US grain industry is recovering thanks to an increased domestic demand and good exports. Furthermore, the favourable weather conferred crops a better quality than usual: the US Department of Agriculture has rated 70% of corn, soybean and wheat crops as good-to-excellent in a recent report. With regard to the poultry industry, it was less affected by the pandemic than the beef or pork industries, and dairy producers were impacted by an extreme market volatility caused by COVID-19.

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    Lantmännen's harvest forecast: A normal harvest for 2020

    Lantmännen, a Swedish agricultural cooperative that is specialised in agriculture, machinery, bioenergy and food products, estimates that the annual harvest of grain, oilseed crops and pulses in Sweden amounts to 6.1 million tons, which is slightly above the 5-year average but lower than last year’s harvest. Sweden has one of the world’s most sustainable agricultures, and the country’s food sector employs a large number of people (around 300,000, out of a total population of 10 million people); furthermore, during the coronavirus pandemic the country prioritized the objective of reaching self-sufficiency.

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    COUNTRIES' RESPONSE

    As soon as the WFP and FAO published an alarming report on the increasing number of people suffering from food insecurity by the end of the year, as a result of the coronavirus pandemic, international organizations, global businesses and donors developed a series of response plans to support rural communities in vulnerable countries. For example, the European Commission secured around EUR 15 billion to assist several developing countries, while OCP Africa implemented a development program targeting women farmers in Ghana.

    COVID-19: Towards a resilient agriculture model in Africa

    The threat represented by an increased number of people facing food insecurity by the end of the year (also because of the coronavirus pandemic) prompted different global donors, like the European Commission, to mobilise around EUR 15 billion in aid for vulnerable countries. Furthermore, OCP Africa (a subsidiary of the first world producer and exporter of phosphate, the OCP Group) developed an emergency programme to help farmers cope with the COVID-19 crisis in 18 African countries. For example, “Women in Agribooster” programme assisted 5000 Ghanaian women farmers in ensuring a stable income.

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    WFP and Takeda partner to strengthen public health supply chains in Africa and the Global COVID-19 response

    The Takeda Pharmaceutical Company (the largest pharmaceutical company in Asia) will contribute JPY 1.5 billion to the World Food Programme to support the pandemic response, thus improving the world health systems. Part of the contribution will be used by the WFP to build an isolation centre for humanitarian and health worker infected with COVID-19, while the remaining part will be used to reinforce public health supply chains in four African countries.

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    How Rwanda’s coffee industry plans to recover from COVID-19 induced disruptions

    The coronavirus pandemic impacted on Rwanda’s coffee sector, posing workforce (shortage of seasonal workers), logistical (transportation channels disruptions that led to high freight rates) challenges and creating market uncertainties. Rwanda’s National Agriculture Export Board is planning to support coffee farmers and exporters in the country by strengthening the communication with the buyers and exploring the digital dimension of coffee trade (for example, promoting the products by organizing online exhibitions).

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    REGIONAL FOCUS

    A meeting of agricultural supply chain innovators and researchers and one of ministries of agriculture discussed different solutions to the disruptions caused by the coronavirus pandemic to the sector in two different regions of the world, respectively Oceania and Latin America. Both of them came to the conclusion that focusing on digital improvements to agriculture would be beneficial to support family farmers, and to tackle recurrent issues, such as droughts.

    AMERICA – Llaman a no poner trabas a la exportación de alimentos

    During a meeting recently convened by Mexico and organized by FAO and the Inter-American Institute for Cooperation on Agriculture, different ministries of agriculture from the entire continent agreed on the need to avoid restrictions to the trade in agricultural products, and to support the family farmers in the region (which provide 70% of all the stable food in Latin America and the Caribbean). More in particular, the importance of enhancing digital agriculture has been recognised as one of the means to reach such objectives.

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    OCEANIA – $250k prize pool for practical agri-water supply chain solutions

    Experts, researchers and innovators in agricultural supply chain solutions from Australia and New Zealand will bring together ideas to better manage water across the supply chain and work around the challenges posed by droughts. This will also be an opportunity to involve the private sector into research, as many universities face the challenge of how they could continue to deliver solid research.

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    ASIA – Number of undernourished people in India declines by 60 mn, says UN report

    According to the most recent State of Food Security and Nutrition in the World, prepared jointly by FAO, IFAD, UNICEF, WFP and WHO, the number of undernourished people shrank in China, and in India it has declined by 60 million (from 21.7% in 2006 to 14% in 2019), while the prevalence of stunted children (too short for their age, due to poor nutrition) decreased from 47.8% in 2012 to 34.7% in 2019. However, more Indian adults became obese between 2012 and 2016.

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