Member profile
Ms. Siobhan Kelly
Organization:
FAO
Country:
Italy
Field(s) of expertise:
I am working on:
FOOD SYSTEMS ENVIRONMENT AND FOOD COMPANIES
AGRIFOOD SECTOR STRATEGY FOR FOOD SYSTEMS
VALUE CHAIN DEVELOPMENT
Ms. Siobhan Kelly
Under the aegis of the UN Secretary-General’s Shared Responsibility, Global Solidarity report, FAO has been an active collaborator in the UNs’ socio-economic support to countries during the COVID-19 crisis. An important aspect of this support has been socio-economic assessments carried out to provide a solid evidence base upon which governments can design informed responses to the crisis. The assessment from Kenya mirrors the impact of COVID-19 on a number of countries in the sub-region and beyond. In Kenya, where agricultural contributes 53% of (GDP) directly and indirectly through other sectors, employing 70% of the rural population, the country was already struggling with the fall-out from a seasonal drought in 2019, before the onset of COVID-19 which also coincided with start of the maize planting season, and the ongoing locust crisis. The culmination of these calamities means that food stocks in Kenya are destined to decline, and prices to increase, effecting the poorest and the most vulnerable segments of the population. Logistics restrictions and curfews in Kenya have continued into June including two-week quarantines for the crews of cargo vessels at Mombasa Port and stricter checks at the country’s borders. The Tanzania report has assessed in more depth the impact of reduced traffic in cargo vessels on storage. As domestic production has been sustained due to minimal restrictions, the existing storage capacity is struggling to serve the backlog of destined exports commodities stocks due to delayed take-offs from ports and airports, however mostly impacting non-perishables such as sisal, tea, cotton and coffee. Results also shown that some import purposed warehouses are also empty. These insights indicate that if the fall-out from the COVID-19 crisis is to continue impacting domestic and international logistics, deeper analysis on import/export food storage capacities will be required to match the effects and inform possible repurposing of storage across sectors to fit the evolving situation.
All reports continue to emphasize the severe impacts on small informal actors, particular in the food services segment of the food industry, such as petty traders, micro food processors, and food canteens. Kenya quickly put into place a series of measures to support these types of actors from reducing the turnover tax rate to 1% from 3% and suspending the listing of non-payment of loans by SMEs. Kenya’s advanced cashless economy has also contributed to an acceleration on food e-commerce, with Safaricom implemented a fee-waiver on M-Pesa to reduce the physical exchange of currency, and Standard Bank providing a 90-day Coronavirus Business Interruption Payment Scheme to small business owners.
The assessment from Turkey also highlights the importance of keeping business, particularly those in the food industry, informed about the implications of decrees on changes in logistics, with 36% for exporting companies, and 22% of all enterprises, reporting the need for improvements in advice on foreign trade, logistic restrictions and requirements, with already engaging in foreign trade.
The Tanzanian assessments outlines a useful scenario analysis (best, moderate and worst case scenarios), on the implications of logistics on many of the country’s important import and export commodities. Under the best-case scenario, large losses have still been incurred by exporters of horticultural crops (flowers, cloves and fruits), tea, coffee, fish/crustaceans, sisal and live animals, cumulatively accounting for 70% of export revenue. Failure to export cotton lint, tobacco, and cashew nuts, has also jeopardized the incomes of countless small farming families as well as jobs in the agro-processing industry. The moderate case indicates that the export of cereals, maize and paddy, milled maize and wheat flour and wheat malt will continue to suffer since the situation on transport logistics is likely to get worse. And the worst case, implicating continued logistical export restrictions with reduced foreign exchange will translate into fewer imports of basic commodities like edible vegetable oil, sugar and wheat; as well as fertilizer for the next farming season. Shortage of edible oil, industrial sugar and wheat is likely to affect operations of beer and other beverages factories as well as hotels and restaurants. Worse still, the sudden fall in incomes by producers and businesses in the agricultural value chain will most likely affect their ability to service bank loans or take new ones; as well failure to implement plans for the next farming season. The worst case scenario will also possibly mean that agro-industry establishments are likely to resort to mass retrenchments due to cash flow problems.
Ultimately these assessments highlight that, while compared to the severe impact of COVID-19 on other non-essential sectors, the food and agriculture sector is nonetheless the most sensitive to logistics and restrictions in the movement of people and goods, and therefore requires more analytical assessments and scenario building to inform public sector programming to mitigate the impact of COVID-19 on food security and those actors reliant on the food industry for their livelihoods. More assessment from 44 countries across Africa, Europe, Asia and Latin America can be accessed at www.undp.org/content/undp/en/home/covid-19-pandemic-response/socio-economic-impact-of-covid-19.html