Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 30/06/2020

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

    Food insecurity
    ©Pep Bonet/NOOR for FAO

    FOOD CHAIN DISRUPTIONS

    Thanks to a combined analysis of a food security assessment carried out last year, a study of the economic indicators during the COVID-19 pandemic and different surveys conducted in 2020 to assess the impact of the pandemic on food security and livelihoods, the World Food Programme estimates that the number of people suffering from acute food insecurity throughout the world will double in the current year. More in particular, the socio-economic impact of the coronavirus could be particularly negative in Latin America and the Caribbean, where it could push 10 million more people into poverty and hunger in 11 countries of the region.

    COVID-19 and Food Security: Crisis Within a Crisis

    In the developing regions of the world, the coronavirus pandemic caused serious hassles to an already fragile system, paving the way for a famine in almost 40 countries, as recently stated by the World Food Programme’s executive director, David Beasley. The result of this is that the number of people suffering from acute food insecurity throughout the world (namely, food insecurity caused by unforeseen events) is projected to double, impacting around 265 million people in 2020.      

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    Liquor body CIABC Urges West Bengal government to reduce high sales tax to sustain the industry

    During the coronavirus lockdown imposed to contain the spread of the virus, many state governments in India chose to increase taxes on alcohol by up to 75% of the retail price, in order to boost up their revenues. The Confederation of Indian Alcoholic Beverage Companies has asked the West Bengal government to reduce such levy, which only had the effect of greatly reducing liquor sales (that fell down by 84% in April).

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    How COVID-19 impacts Indonesia’s trade

    Because of the coronavirus pandemic, in the best-case scenario the Indonesian economy will grow by only 0.5% in 2020, compared to a 2.97% growth in the first quarter of the year. In May, the country recorded a trade surplus of USD 2.09 billion, which was actually a result of a profound decline in imports, rather than a sharp increase in exports.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    The fruit industry in Chile and Canada was facing major challenges even before the coronavirus pandemic entered the scene: the Latin American country was recovering from one of the harshest droughts in its history, while Canadian orchardists were incurring losses due to a low apple price. The dairy markets in the United Kingdom shared the Canadian and Chilean’s fruit industry’s resilience, but some of the major importers of the UK’s dairy products may not be able to purchase the same quantities due to a reduction in the price of petroleum.

    Dairy – looking beyond coronavirus

    Despite the widespread economic shock caused by the coronavirus pandemic, the dairy industry in the United Kingdom has remained relatively stable, so far. However, the lower petroleum prices will affect the oil-rich countries’ ability to import dairy products, and this is likely to determine an economic slowdown for the dairy markets.

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    B.C. fruit shortage predicted as farmers make cuts

    A survey conducted by the B.C. Fruit Growers Association highlights that two in three farmers will not plant as many plants as last year in Canada, because of the current financial constraints. Apple prices were very low before the coronavirus pandemic, meaning that the costs incurred by farmers to produce them was higher than their revenues. Now, they are also facing the additional costs determined by the consequences of the coronavirus pandemic.

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    Chile: Last season was a test like never before for produce industry, Global Reefers CEO

    Chile’s fruit industry has recently faced one of the harshest droughts in Chile’s history, and the consequences posed by the COVID-19 pandemic, affecting all stages of the supply chain. However, the sector demonstrated a high level of resilience, and now that the peak of shipments passed, it is almost back to normal.

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    COUNTRIES' RESPONSE

    Two different cases of government policy support in Europe and Africa: Spain’s Council of Ministers officially approved a draft legislation that will improve the country’s food supply chain through the introduction of a list of unfair practices and other measures that will eventually put an end to a lack of transparency in price setting and improve working conditions in the fisheries sector; Ghana’s Ministry of Food and Agriculture launched an initiative that will provide support to women’s farmer-based organizations by enabling them to produce more competitive products for the local and export markets.

    DALRRD confirms SA government policy stance: No ban on live export

    South Africa’s Department of Agriculture, Land Reform and Rural Development officially confirms that there is no policy or legislation opposing livestock exports, even though earlier this month the National Council of Societies for the Prevention of Cruelty to Animals (the largest animal welfare organisation in the country) obtained a temporary restriction on live exports of animals by the Grahamstown High Court.

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    El guiño de Planas al campo tras el Covid: amplía la lista negra de prácticas desleales

    Spain’s Council of Ministers recently approved a draft legislation containing different provisions on the improvement of the country’s food supply chain, including a list of unfair practices, like the cancellation of a contract for the supply of perishable goods within 30 days. The Spanish Food Standards Agency (Agencia de Información y Control Alimentarios) will be the entity responsible for ensuring compliance with the new legislation.  

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    Agric Ministry unveils GHS 2.5m support scheme for women farmers

    Ghana’s Ministry of Food and Agriculture and Ministry of Local Government and Rural Development officially launched a new initiative supporting women’s farmer-based organizations that are involved in the post-production of agricultural products. Such initiative will grant GHS 2.5 million to the said organizations, ensuring their products will be more competitive and attractive.

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    REGIONAL FOCUS

    Together with Brexit and the new African Continental Free Trade Agreement, the coronavirus pandemic may unexpectedly offer the African economies an opportunity to strengthen their trade relationships with the United Kingdom. In fact, the new situation provides an occasion for the two countries to create new commonly agreed biosecurity standards for food and health related trade flows, since the previous trade modalities are no longer acceptable.  

    AFRICA – The ABC triangle: Putting the AfCFTA, Brexit, and COVID-19 to work for Africa

    The entry into force of the African Continental Free Trade Agreement, the official withdrawal of the United Kingdom from the European Union and the coronavirus pandemic have determined a profound change in Africa’s trade relationship with the UK. In fact, the AfCTA is projected to generate annual profits of USD 134 billion, while Brexit may further facilitate the trade relations with the UK and COVID-19 creates new opportunities for the increasingly competitive African economies.

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    AMERICA – The pandemic has America’s farmers on the brink. This could help us survive

    The US government’s financial support to farmers under the Coronavirus Food Assistance Program is only a temporary fix, because for farmers to be able to thrive again they need to be able to trade with partners across the world without restrictions, as the internal market is hampered by the consequences of the coronavirus pandemic.

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