Costa Rica, Colombia and the Philippines are all bearing the brunt of the negative consequences on agriculture that were brought about by the coronavirus pandemic: the decrease in consumption and the increase in productions costs for farmers (especially fertilizers), coupled with the restrictions to movement, have heavily affected the Costa Rican agricultural producers, while Colombian farmers are also dealing with the repercussions of the roadblocks occasioned by the protests against the country’s government. The Philippines, on the other hand, is dealing with a reduction in the production of rice, which has an influence on hunger incidence and will force the country to import larger quantities of this commodity in the near future. Meanwhile, despite a reduction in the production and in the demand for seafood in Japan, many Japanese seafood companies managed to increase their revenues in recent years by implementing unsustainable management strategies.
Selected weekly news on food chain disruptions and countries responses to the COVID-19 impact on food chains (10/05/2021 to 16/05/2021)
FOOD CHAIN DISRUPTIONS
Poverty and hunger incidence during 2020 have increased significantly in the Philippines, where the lack of access to food among the poor is evident from the long lines to community pantries around the country: more in particular, last year 4 million households (according to another source, 6 out of 10 households) went hungry and nearly a third of all Filipino children under age 5 are stunted. One of the reasons for this worsening situation is undoubtedly the coronavirus pandemic, but there are also other factors, such as the disappearance of low-priced National Food Authority rice and the soaring prices of commercial rice. With a smaller crop, the Philippines is now projected to import more rice next year to meet the rising demand for this commodity, according to the United States Department of Agriculture. This will make the country the second largest rice importer after China in 2022.
Costa Rica and Colombia are currently facing similar concerns related to food security. According to the Union of Costa Rican Small Agricultural Producers, the coronavirus pandemic has heavily affected the agricultural sector in Costa Rica with a series of restrictions that hit production, which was also influenced by a decrease in domestic consumption. In Colombia, on the other hand, two weeks of roadblocks occasioned by the protests against the country’s government have already caused food and fuel shortages in most of the big cities, such as Cali. In the southwestern part of the country, these shortages, coupled with the effects of a third peak of the coronavirus pandemic, are further fueling a social and economic crisis that has a negative impact on food security.
The production of seafood relies almost entirely on natural resources, which are gradually shrinking due to overfishing. Furthermore, since the largest seafood companies source seafood everywhere in the world, their impact on the oceans is significant. Japan is the most represented country among the world’s 100 largest seafood companies, and it is also responsible for unsustainable management strategies, such as foreign expansion, acquisitions, vertical integration, cost-cutting and de-leveraging. Although changing consumer trends and a decline in wild catch in Japan have reduced the country’s share of global seafood production, the abovementioned unsustainable management strategies allow Japanese seafood companies to bypass the natural capital constraints imposed by a decline in production and consumption of fish in their domestic market, and to increase their foreign revenues.
IMPACT ON COMMODITIES AND FOOD PRICES
China’s strong demand for maize (which is fundamental for the restoration of the country’s pig herd, that was decimated by the African swine fever in 2020) keeps driving up the global prices of this commodity, with repercussions on the costs of production, especially for meat producers. As a consequence, meat prices are high both in the United States and in Argentina, and this was confirmed by the FAO Food Price Index, which reached its highest level since May 2014. More specifically, the FAO Cereal Price Index was up 1.5 points (1.2%) in April and stood 25.8 points (26%) above its April 2020 level, and similarly the FAO Meat Price Index recorded an increase in pig, bovine and ovine meat quotations in April. Nigeria and Pakistan have also witnessed price increases for several food items, especially due to the tight supplies amid the Eid al-Fitr celebrations, which marked the end of the holy month of Ramadan.
Since mid-April, maize prices have been at their highest in 8 years in the United States (especially due to China’s massive purchases to feed its pig herd), and together with the difficulties occasioned by the coronavirus pandemic on staffing and distribution, this factor is contributing to an increase in the cost of production, and therefore also in meat prices. However, supply is stable as most of the ranchers left their herds to graze on pasture since many meat plants shut down last year, and now that restaurants are reopening, meat is in high demand. Meat prices are currently higher than average in Argentina, too, where meat supply is limited by the unavailability of fattening cattle, as calves are usually destined to feed on maize for 3 or 4 months, but due to the high prices of this commodity, they are now being sent to the pastures to be fattened in a more pastoral system.
Over the last year, the coronavirus pandemic has put a great pressure on supply chains, and (coupled with the unprecedented demand from China and to natural disasters like drought and floods) the prices of fundamental agricultural commodities such as maize and soybean have skyrocketed: in one year, maize prices have nearly doubled (+84%), soybeans have gained 72%, sugar is up 59% and wheat prices have increased by 19%. This information has been corroborated by the FAO Food Price Index, which averaged 120.9 points in April 2021 (a 1.7% increase month-on-month), that marked the eleventh consecutive monthly rise in the value of the Index (to its highest level since May 2014). More in particular, this last increase was driven by the high prices of sugar, vegetable oils, meat, dairy and grains.
In the run up to the Eid al-Fitr celebrations (which mark the end of Ramadan’s month-long fasting) food prices surged both in Nigeria and in Pakistan. More in particular, the prices of tomatoes, onions, rice, beans and other staple food items witnessed a significant increase during the week in the Lagos State, due to the scarcity of food products and to price manipulations by traders and manufacturers (who tend to jack up prices during this period of the year). In Pakistan, on the other hand, chicken prices saw the highest increase, which was caused both by a short supply that is a consequence of the religious celebrations, and by an outbreak of Ranikhet disease (that is also known as Newcastle disease in the West), which is caused by the paramyxovirus and mainly affects domestic fowl.
This week’s media coverage highlights several initiatives taken by international development organizations to support the developing countries’ recovery from the disruptive effects of the coronavirus pandemic, and more specifically to enhance and preserve food security and nutrition. The World Food Programme will support the expansion of social protection programmes to food insecure people in Rwanda and help improve food security and nutrition rates among the rural communities of Tunisia, while the African Development Bank has pledged to collaborate with Ethiopia in its effort to end stunting in children under the age of two by 2030. Finally, the World Bank undertook to provide Yemen with a USD 127 million grant to boost agricultural production in the country, in order to support food security and protect livelihoods.
The European Union has recently provided the United Nations’ World Food Programme (WFP) with EUR 500,000 under the Sector Reform Contract, that will be used to support Rwanda’s recovery from the disruptive effects of the coronavirus pandemic. More in particular, WFP will ensure that the new funds will contribute to the development of social protection programmes, in order to expand them to the most vulnerable and food insecure people in Rwanda, and to make them more shock-responsive by building on the lessons learned from the global pandemic. Furthermore, the funding will support the generation of evidence on food security, markets and supply chains, to better inform the Rwandan government and its partners in their investments in COVID-19 recovery.
During a meeting of the National Price Monitoring Committee, Pakistan’s Ministry of National Food Security and Research announced that it will soon present a summary to import an additional four million tons of wheat in order to build strategic reserves and ensure a stable supply of this commodity across the country, after the wheat crisis that shook Pakistan in the past year: in Khyber Pakhtunkhwa, for example, wheat stocks will be exhausted by May 15, 2021. Furthermore, a recent report created by the China-Pakistan Agricultural and Industrial Information Platform highlights several opportunities for Pakistan to enhance its rice export. For instance, according to the report, a rice hybrid variety bred by the Chinese Wuhan University and in high demand in Asia has the ability to raise production by two times, and therefore it will help ensure Pakistan’s grain yield.
The Japanese government has recently contributed USD 280,000 to the United Nations’ World Food Programme (WFP) to support the development of the Tunisian food supply chain’s resilience amid the coronavirus pandemic, and therefore to help improve food security and nutrition in the country’s rural areas. Meanwhile, the African Development Bank and the Government of Ethiopia have signed an agreement for a USD 31 million grant that will be used to support the country’s initiatives to end stunting in children under the age of two by 2030. Finally, the World Bank has approved a USD 127 million grant to preserve food security and protect livelihoods in Yemen, by providing nutritious food products to vulnerable communities and support the restoration of agricultural production in the war-torn country.
The unfavourable weather conditions in the last months caused major damages to orchards, vineyards and spring crops all over Europe, leading to record frost-related losses: for example, the volumes of apricots harvested in France, Italy, Spain and Greece this year fell dramatically, compared to the five-year averages, and this was also attributed to the disruptions to harvesting and labour logistics occasioned by the coronavirus pandemic. In the past six years, a Malaysian non-profit has been rescuing discarded food from supermarkets and manufacturers in order to feed people in need and reduce the huge amounts of food that gets thrown in landfills that are harmful to the environment, and now it represents an example of good conduct for many other Asian developing countries. Finally, an Irish charity has recently launched a project whose objective is to reduce the environmental footprint of many businesses in the country by planting a million new trees in sub-Saharan Africa.
According to the European Assembly of Fruit and Vegetable Producing Regions, the European apricot harvest is set to be the lowest in 30 years, due to the recent widespread spring frosts that damaged the crops and to the disruptions to harvesting and labour logistics caused by the pandemic. France’s apricot harvest seems to have been hit the hardest, with supplies expected to fall to their lowest level in at least 46 years (down 60% from the five-year average), as last month the temperatures fell well below zero on several nights in a row in many parts of the country. Compared to the average levels, the production of apricots is likely to fall also in Spain and Greece, while Italy (the EU’s leading producer) expects a huge 56% drop in its crop volume to 136,101 tons (in the country’s worst-affected region, Emilia Romagna, the volume is predicted to fall almost by 90%).
An innovative Malaysian non-profit group collects food that would normally get lost in environmentally polluting landfills, and uses it to feed people in need. This project started in 2015 and it is now making a difference in Malaysia: in the country, 3000 tons of edible food get wasted each day, but thanks to the project roughly 10 tons of unwanted food is recovered each week from supermarkets, manufacturers and wholesale markets. This project offers two main takeaways for developing Asian countries: using existing resources that would be otherwise discarded to feed the most vulnerable members of society, and highlighting the importance of addressing nutritional poverty among the poor, the elderly and the disabled.
Many retailers, small manufacturers and other businesses in Ireland have recently been invited to join a development charity in planting a million new trees both in Ireland and in sub-Saharan Africa (where rural communities are witnessing some of the worst effects of climate change, although they are least responsible for it), in order to sequester the carbon they generate. According to the charity, each tree, once mature, will be able to remove approximately 25 kg of carbon from the atmosphere every year at the price of just a few hundred euros a year. Trees in Africa are also being planted in large-scale land rehabilitation projects to limit soil erosion, but also as sources of shade and shelter in countries like Uganda, Kenya, Ethiopia, Malawi and Burkina Faso.