General considerations concerning food chain disruption news

During the month of August, news concerning disruptions to global food value chains varied considerably between developed and developing countries, and within the same groups. What is immediately evident is that most of the news detailing food chain disruptions mentioned developing countries, rather than developed countries (80 mentions against 50 mentions, for a total of 130), and that some of the stages are exclusive to one group or the other: disruptions to the market, post-harvest and transport stages were mentioned only in reference to developing countries, while disruptions to the retail, harvest and distribution stages were exclusive to the group of developed countries. Finally, most of the news highlighted information related to producers, consumers and exports: these three categories represented more than half of the total mentions (76 out of 130).

News related to producers struggling in the English-speaking world

18 news mentioned difficulties faced by producers in the United States, United Kingdom and Australia (respectively the first, fourth and fifth most mentioned countries during the month). More in particular, one of them mentioned the issues posed by climate change phenomena and the use of pesticides on the activities of the American beekeepers: the lack of bees in the United States assumes importance considering that three quarters of the world’s food crops depend on pollinators (almonds, apples, blueberries and cherries, for example), and that the number of such crops increased by 300% over the last 50 years. Other news related to American producers mentioned low milk prices affecting dairy producers and dry weather in parts of the Midwest affecting maize and soybean producers.

     6 news mentioning Australia highlighted various issues faced by exporters. The Chinese anti-dumping tariffs on Australian barley have been often interpreted as a retaliation against Australia, after its call for an investigation on the origins of the coronavirus pandemic. Such trade restrictions concern the Australian agricultural business leaders, who are worried about the impact of China’s alleged retaliation on their exports. The British producers, on the other hand, were mostly affected by the issuance of an EU insecticide ban, which allowed the resurgence of the cabbage stem flea beetle, resulting in huge losses for the British oilseed production. Furthermore, potato farmers in the UK faced two of the worst crops in 40 years, due to both a major drought and torrential rains.

Challenges to storage facilities and producers in South Asia and the Middle East

On 4 August a large fire broke out at the port of Beirut, followed by a colossal explosion that generated a mushroom cloud into the air, a blast wave that left buildings within miles from the port in ruin (up to 300,000 people suffered damages to their homes), killed more than 200 people and destroyed a huge grain store with a capacity of 120,000 tons and around 250 tons of rice that were temporarily stored in 10 containers. The explosion immediately sparked concerns about a possible shortage of flour and further worsened the situation of civil unrest that was already present in the country due to a devastating financial crisis. Pakistan is still facing similar risks related to a flour shortage, which the central government is trying to contain with poor results.

     China and India (second and third most mentioned countries during the month), on the other hand, mostly faced difficulties related to the agricultural and meat production. Severe floods still caused heavy damages in China in early August, affecting large portions of rice fields, with economic losses amounting to around CNY 41.64 billion and a total of 11.2 million tons of food lost. In India, on the other hand, the main difficulties faced by producers stemmed from the coronavirus lockdown, which heavily impacted on beef production, especially since the collection of animals is usually carried out in the form of home visits. Finally, the Malaysian and Indonesian production and export of palm oil contracted because of a worsening labour shortage amid the pandemic and to heavy rains. More in particular, Malaysia’s palm oil production decreased by 5%, while Indonesia’s palm oil exports declined for all destinations, except for India and Pakistan, while the internal demand for this commodity remained stable.

Beef prices and export trends in the US, Brazil and Australia

The most mentioned commodity in reference to the impact of the disruptions to the global food supply chains during the month of August was beef (20 mentions), and it was mainly connected to issues faced by the United States, Australia and Brazil. More in particular, beef was often mentioned in articles related to the rising food prices in the US’ grocery stores and supermarkets over the last year. Such price increases are caused by an increased demand from consumers following the initial shortages caused by the coronavirus pandemic (beef prices were up 25% toward the end of July), and by the additional distribution costs that meat processors had to bear. The difficulties caused to the industry by the pandemic were addressed by state governments, such as Montana’s Department of Agriculture, which granted USD 7.5 million to small and medium-sized meat processors through the Montana Meat Processing Infrastructure Grant Programs.  

     For what concerns Australia, beef was mainly mentioned in early August, when a hike in Covid-19 cases in the country’s second most populous state, Victoria, triggered a series of new lockdown restrictions, which also affected meat-processing plants, warehousing centres and distribution centres. The lockdown measures immediately caused panic buying in Melbourne, where consumers hoarded supermarkets out of fear of not being able to find meat during the following 6 weeks, and a decrease in beef exports to China, which in mid-August amounted to half of what was shipped in that period last year. Additional factors that caused the contraction of exports included a strengthening Australian dollar and a growing competition from the United States, where meanwhile beef production was slowly recovering thanks to the prompt intervention of the state authorities.

     Finally, the news mentioning beef production and exports from Brazil also underlined that most of the fires in the Amazon rainforest are deliberately provoked by landowners in order to make way for agriculture lands or livestock pastures: according to the World Wide Fund for Nature, 20% of all soy and beef exports that reach the European Union from Brazil were produced through unsustainable practices, such as illegal deforestation.

Rice production in South and South-East Asia

The second most mentioned commodity during the month was rice (14 mentions), especially in connection to South and South-East Asian countries. During the first half of 2020, rice was one of the few commodities that withstood the negative impact of the coronavirus pandemic in Vietnam, which saw its rice exports increase by 5.6% (around 3.5 million tons). However, rice exports slightly decreased toward the end of July, and as the summer-autumn harvest was approaching its end in early August, the reduced production of the commodity (both in Vietnam and Thailand) determined an increase in export prices, which rose to USD 470 per ton.

     Rice was often mentioned also in relation to Bangladesh and India: the former may be importing rice during the next harvesting season, due to its failure to procure enough of the commodity from farmers to replenish its fast depleting food stock. Furthermore, the country’s governments imposed higher rice imports also to keep the market stable, after a hike in prices that could have hurt the consumers (who lost most of their incomes due to the coronavirus pandemic). Rice exports in India, on the other hand, were seriously hampered by the growing number of Covid-19 cases toward the end of July in the Southern state of Andhra Pradesh, which caused a labour shortage and great difficulties in fulfilling rice orders.

     Finally, news related to the Philippines and Cambodia described the measures taken by the respective governments to support the farmers that struggled to maintain high levels of productivity amid the coronavirus pandemic. In the Philippines, the Socioeconomic Planning Secretariat met the need of the rice farmers to have access to disaster-resilient farm technologies and cold storage facilities, while in Cambodia a new blockchain technology ensured that 500 household farmers could sell their products at a higher price, and also allowed for a more precise identification of the country’s main food sources.

Coffee and sugar production East Africa and the Caribbean

Despite the fact that Brazil and Ethiopia have engaged in a number of cooperation initiatives and agreements to enhance their cooperation in coffee production, due to unfair trade terms and low coffee prices (often below production costs), millions of family farmers in Ethiopia (and Uganda) are not able to lift themselves out of poverty, and their total share in the coffee value chain ranges between 8.7% and 12.6%. In Rwanda, on the other hand, coffee exports were recently strengthened thanks to the Rwanda Development Board, which increased the popularity of this commodity among the Chinese consumers through online sales with popular celebrities.

     For what concerns sugar production in the Caribbean, two thirds of all sugar consumed in the region is imported, despite the fact that sugar cane cultivation and sugar production have been going on in countries like Barbados, Belize, Guyana and Jamaica for around 370 years. These countries lack a modern refinery, and this is the main reason for their reduced production and export of this commodity. In Jamaica, for example, in five years the total sugar cane production fell by 52% and sugar production by 44%, and lands that were used to grow sugar cane were allocated to housing and farming.

General considerations concerning countries' response news

Out of a total of 80 mentions to developing and developed countries in articles related to countries’ response selected during the month of August, more than a half (54) referred to developing countries, while only 26 underlined measures taken by developed countries’ governments to offset the negative effects of the food chain disruptions. Furthermore, the measures taken by governments of developing countries were more varied: in fact, three specific kinds of response were exclusive to the developing group (namely, the organization of physical or virtual events, the establishment of new trade arrangements and the improvement of market access for agricultural producers). Developed countries outnumbered the developing ones only in two cases: when providing financial support as a means to repair damages or improve resilience, and when providing training or materials to agricultural producers.

Financial support and technological improvements in the English-speaking world

Taken together, the mentions to the United States, Canada, the United Kingdom and Australia represented more than one third of all mentions to developed countries with regard to governments’ responses. The news concerning the USA, Canada and the UK focused on initiatives providing financial support to producers and farmers, or to fund food distribution programs to stabilize the levels of food security amid the pandemic.

     More in particular, the US Department of Agriculture (USDA) financed the Farmers to Families Food Box Program, which had distributed over 50 million food boxes in support of American farmers and families who lost their jobs because of the coronavirus pandemic at the end of July. It also provided relief to dairy processors, packagers, merchants, marketers, wholesalers and distributors through a loan programme that allowed them to access the capital they needed to avoid the negative effects of the significant market volatility caused by the pandemic. Furthermore, the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act represented a fourth coronavirus response package in the country, providing the USDA with an additional USD 20 billion to further the Coronavirus Food Assistance Program (including the abovementioned Farmers to Families Food Box Program).

     The UK, on the other hand, provided financial support to potato farmers and dairy producers, while Canada focused on funding innovative agricultural technologies, training and technical support to food cooperatives. Finally, two different Australian universities and one company that connects farmers to the retail industry developed blockchain platforms and traceability systems that allow data to be shared more easily between different actors throughout the supply chain, ensure compliance with food standards and streamline meat and seafood exports.

Humanitarian aid and technological improvements in developing countries

Most of the news detailing humanitarian aid initiatives in August referred to the explosion that severely damaged the port of Beirut, fueling social unrest and raising concerns about a flour shortage in Lebanon. Several UN agencies (including the OCHA, WFP, WHO, IOM and UNHCR) immediately assisted hospitals, migrants and refugees, repaired damaged homes and provided logistical support, wheat and health supplies, while Turkey made available the port of Mersin, its hospitals, air ambulances and wheat supplies.      

     The news highlighting new technological improvements, on the other hand, referred to India and Sub-Saharan countries like Nigeria, Uganda, Tanzania and Gambia. India’s government mainly focused on creating new job opportunities for internal migrants that were forced to return to their native rural provinces when the first coronavirus lockdown measures were established in big cities, in order to reduce the levels of internal migration in case new outbreaks emerge in the future. More in particular, small-scale renewable energy solutions were implemented locally by communities and small-scale producers, contributing to the national energy supply. Furthermore, India improved agricultural mechanization to reduce losses and strengthen post-harvest management. Agriculture modernization initiatives in Sub-Saharan Africa, on the other hand, mainly addressed productivity constraints by promoting modern agronomic practices (such as using fertilizers and herbicides) in order to tackle food insecurity concerns.

Andrea Frusone

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