Groups representing truckers in the United Kingdom have recently urged the country’s government to take immediate action in order to avoid serious food supply chain disruptions after the end of the Brexit transition period, when all food products will have to undergo additional controls as they cross the border with the European Union. Furthermore, the country’s coffee industry has already been damaged by the coronavirus lockdown: people are still reluctant to purchase hot drinks, and one of the biggest coffeehouse chain in the UK has recently announced that it had to cut 1,500 jobs. Meanwhile, a joint report by the WWF, UNEP, EAT and Climate Focus highlighted that a large majority of the world’s governments are not taking food systems into account in their climate plans.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Several groups representing road hauliers have warned the UK’s government against severe supply chain disruptions after the end of the Brexit transition period (on 31 December 2020): for the first six months of 2021, goods entering the European Union from the United Kingdom will undergo the EU’s normal controls, but on the UK side, the systems that are needed to manage the flow of trucks at the border are not up and running, which could lead to trucks being refused entry onto ferries headed for the EU (and therefore to long tail-backs at the ports). This could impact on the country’s food supply, given that the UK imports most of its food from the EU.
Adding actions on diets and food loss and waste to national climate plans could drastically reduce greenhouse emissions. However, despite the fact that food systems are responsible for up to 37% of all greenhouse gas emissions, a joint report by WWF, UNEP, EAT and Climate Focus underlined that over 90% of all national commitments to the 2015 Paris Climate Agreement fail to account for the whole food system. The biggest emitters identified in the report are Sudan, Brazil, China, India and Indonesia; however, since Europe is a major importer of food and agricultural ingredients, it has a responsibility to act in this respect, too.
The coffee industry in the United Kingdom had kept on growing until the beginning of the coronavirus pandemic, when coffee shops started facing drastic decreases in customer numbers and revenues (spending on takeaway hot drinks in the country plummeted by 90% in April), which forced them to cut jobs and close outlets. Despite shops are gradually reopening and workers are slowly returning to the offices, people are still buying fewer hot drinks and over a third of the coffee shops in the UK have not reopened since the end of the coronavirus lockdown.
IMPACT ON COMMODITIES AND FOOD PRICES
Toward the end of March, the Kenyan government announced measures aimed at keeping the spread of the coronavirus pandemic, which included the shutting of all entertainment areas, including bars. This lockdown measure is still ongoing, and according to the Alcoholic Beverages Association of Kenya, it will cost the government, the workers and the farmers (who produce sorghum, barley and wheat, which are necessary for the production of beverages) around KES 9.1 billion. Meanwhile, the US’ dairy industry is falling behind its biggest competitors, such as the European Union (which is striking better trade deals), while the Philippines saw its food inflation rates slightly decrease in August, thanks to a stable food supply.
Kenya shut all bars in the country on March 22, as part of the measures to limit the spread of the coronavirus pandemic, and this specific restriction is still ongoing. Alcohol manufacturers and distributors in Kenya are now warning that the continued closures of bars will cost workers, grain farmers and the government around KES 9.1 billion and 57,000 jobs, unless the businesses reopen. In fact, bar closures have hurt consumption and reduced the demand for barley, sorghum and wheat, which are used to produce beverages.
15% to 17% of the total dairy production in the United States goes into exports, but according to the US National Milk Producers Federation, the country’s dairy industry is currently falling behind its competitors, and especially the European Union, which is way ahead in reaching bilateral trade agreements. For example, the US can count on the US-Mexico-Canada Agreement, but the US cheese in Canada is still at a disadvantage because of a trade agreement between the EU and Canada that is more favourable. Both the American dairy industry and the rural economy would largely benefit from new trade agreements that allow the US to compete equally.
According to the Philippine Statistics Authority, during the month of August a stable supply of food in the country and the new rice tariffication law that ensured an ample supply eased inflation (the inflation rate is currently 2.4%, from 2.7% in July), so that rice, meat, fish and vegetables all showed stable prices. Furthermore, there was no indication of a weakening spending power for the Philippines’ consumers in August. In order to ensure stable inflation rates also in the coming months, there is a need to improve supply chain efficiency in agriculture amid the ongoing coronavirus pandemic and the impending typhoons.
Despite the preexisting difficulties faced by Cuba and Somalia, both countries developed public or private initiatives to offset the negative effects of the coronavirus pandemic on the agricultural sector. Cuba’s government has established a national plan to improve nutrition education in order to reduce malnutrition and to improve self-sufficiency in food production (the country imports 80% of its foods), while some Somalian farmers have responded to a reduction in food imports caused by the coronavirus lockdown by adopting modern food production practices. Meanwhile, the United Kingdom is financing several development projects to support vulnerable people in developing countries.
The UK government will invest GBP 7.2 million in the implementation of 20 new research projects to offset the negative impacts of the coronavirus pandemic on vulnerable people (such as refugees and children) in developing countries around the world. The funds will be used to develop new technologies: for example, one of the projects is run by the University of Oxford in collaboration with the University of Cape Town, and it will develop a parental advice app for families affected by school closures in Africa, while the University of Sheffield has been mass-manufacturing face shields.
The new SAN Plan (Plan Nacional de Soberanía Alimentaria y Educación Nutricional) in Cuba aims at making the country (which imports 80% of its foods and where high food prices and a limited supply make it difficult to have a healthy diet) self-sufficient by improving food production, thus reducing dependency on imports. However, Cuba is struggling with various issues that affect agricultural productivity, such as soil salinization, a limited use of fertilizers and pesticides and frequent extreme weather events (such as droughts and hurricanes). Furthermore, 42% of the population is overweight, and it takes years to change eating habits.
Farmers in Somalia have adopted modern food production systems to contrast hunger and malnutrition amid the coronavirus pandemic: for example, a university student based in Mogadishu ensured that different households had an adequate supply of fresh produce when the coronavirus lockdown determined a reduction in food imports and a hike in food prices, thanks to the establishment of a greenhouse. Now he manages to produce around 500 kilograms of tomatoes a week, which are sold in markets across the capital city.
Last week, Asian and Asia-Pacific countries have pledged to improve trade in services in order to alleviate policy barriers and prevent the global economic downturn that is caused by the impact of the coronavirus pandemic, and to transform food systems through agricultural innovation (for example, by using drones, satellite imagery, big data and block chains), on two different occasions: during the 2020 China International Fair for Trade in Services, and during FAO’s 35th Regional Conference for Asia and the Pacific. On the other hand, food trade in Europe may be hindered by the United Kingdom’s non-compliance with food labelling requirements after the end of the Brexit transition period.
Government leaders worldwide and officials in international organizations have recently participated to the 2020 China International Fair for Trade in Services, which stresses the importance of services trade and cooperation with China in promoting global economic recovery. The Thai prime minister announced that Thailand is looking forward to stepping up bilateral trade and service cooperation with China, while the South Korean prime minister said that China and South Korea are required to alleviate policy barriers that restrict services trade in order to prevent the global economic downturn caused by the coronavirus pandemic.
More than 40 member states of the Food and Agriculture Organization participated to the four-day regional conference for Asia and the Pacific with 750 representatives of the private sector and civil society, during which they pledged to work to transform food systems through agricultural innovation, in order to make them more sustainable, productive and resilient. For example, food chains in the Asia-Pacific region are increasingly benefiting from technological innovations such as drones, satellite imagery, big data and block chains.
In addition to the concerns around food supply in the United Kingdom caused by Brexit and described in the first section of this daily news digest, the British food and drink manufacturers are also running out of time to prepare the labels that are needed to export products to the European Union after the Brexit transition period ends. If decisions around labels are not determined soon, some categories of products may not be suitable for import or export because they would be seen as non-compliant; furthermore, this is not an EU-specific problem, but it may concern individual member states which could have their own requirements.