The International Monetary Fund’s conditionality that is attached to the disbursement of its loans has recently led Costa Rica to propose a series of tax increases and cuts to public spending for a USD 1.75 billion loan. As a result of this move, many protesters have set up blockages in the country, limiting traffic and causing severe economic losses for different industries (including the banana industry). In Senegal, a group of women rice farmers are urging the government to provide them with a combine harvester to prevent unharvested rice from being burned or eaten by livestock. Meanwhile, parts of the United States (such as Oregon) are suffering a shortage of canning supplies, which was mainly determined by hoarding during the coronavirus lockdown.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
As part of an agreement with the International Monetary Fund to have access to a USD 1.75 billion loan, the Costa Rican government proposed a series of tax increases and cuts to public spending, which gave rise to several protests and blockades throughout the country. Since the blockades are limiting traffic, several associations of banana producers claimed that they are losing around CRC 800 million each day since the beginning of the protests.
Large amounts of rice risk being abandoned in Kédougou’s rice fields, in Senegal, where it will be burned in bush fires or consumed by livestock. This is due to the fact that most of the rice farmers in the region (who are mostly women) lack the proper technology to harvest all the rice they produce. Therefore, they are asking the country’s government to provide them with a combine harvester in order to limit the losses.
People across Oregon, USA, are currently struggling to find lids and jars available locally for the canning season. This shortage, which was caused by a snowstorm that hit the state in February 2019 and was aggravated by the coronavirus pandemic (and therefore, by panic buying) has driven prices up exponentially and inspired a reversion to outdated preserving practices.
IMPACT ON COMMODITIES AND FOOD PRICES
While rice prices are currently stable in India (due to a temporary decrease in demand for this commodity) and decreasing in Thailand (thanks to the growing flow of fresh supplies from rice fields), the prices of many basic food commodities keep increasing in Pakistan, such as tomatoes, onions, eggs, chicken, potatoes and sugar. More in particular, the price of wheat flour is still growing despite the increasing imports, due to the shortage of this product that is inspiring hoarding behaviours in the consumers.
Rice export prices have decreased for the sixth consecutive week in Thailand, and new supplies are expected to bring the rates further down toward the end of the month. On the other hand, prices remained steady in India, due to a softening of demand after a surge in exports during the last few months, although the country’s rice exports may rise by nearly 42% in 2020, because of the reduced shipments from other rice-exporting countries.
According to Pakistan’s Bureau of Statistics and based on the prices of 51 essential items from 50 markets across 17 cities, last week the price of essential food items (such as tomatoes, onions, eggs, chicken, wheat flour, potatoes and sugar) in the country has further increased. Pakistan’s prime minister has announced that the government will use all possible resources to find the causes of the hike in prices and to limit such price increases.
Despite the massive wheat imports in Pakistan, the prices of wheat flour have recently surged to an all-time high of PKR 75 per kilogram, mainly due to hoarding. Local wheat is almost unavailable in the country’s markets, so that mills are blending the imported wheat with the locally produced wheat to produce flour (the current blending ration is 80:20), while in some parts of Punjab the mills are only supplying flour made from imported wheat.
Ethiopia is in the process of completing the recovery of its economy after the disruptions caused by the coronavirus pandemic, while boosting agriculture productivity and infrastructure development at the same time. This twofold objective was made possible to achieve by the implementation of the Cluster Farming System (whereby small-scale farmers are increasing their crop productivity, which in turn helps them build up food security and supports the country’s efforts towards self-sufficiency) and thanks to the financial support provided by different international development partners. In India, on the other hand, the local authorities of the Jammu and Kashmir state are planning to enhance fish farming by introducing the biofloc technology.
To tackle Ethiopia’s poverty challenges and realize reform agendas, the country’s government has been working with different development partners, such as the World Bank Group and the European Union. For example, a USD 400 million grant from the International Development Association will improve the incomes of urban and rural dwellers through infrastructure development and agricultural productivity enhancement. Furthermore, Germany has recently granted an ETB 4.3 billion grant to support the implementation of the national Covid-19 response plan.
Ethiopia’s Ministry of Agriculture has recently announced that the country’s Cluster Farming System is contributing to the decrease in the imports of agricultural commodities. In fact, the System brings sustainable change on smallholder farming, by creating an interconnected value chain alliance support and by giving emphasis to filling gaps in productivity, producing market-oriented commodities and creating a linkage between markets and smallholder farmers.
The Jammu and Kashmir administration, in India, will introduce biofloc technology to boost fish farming, in order to create an income generating fish farming unit in the state that is capable of reducing youth unemployment. Biofloc is a low-cost fish farming method whereby toxic materials in the water (such as ammonia, nitrate and nitrite) are converted into feed.
Enhanced trade between countries in Latin America and East Africa is supporting the recovery of their economies in the aftermath of the coronavirus pandemic. For example, Mexico has recently opened up its market to the import of eggs coming from Brazil (where the total production of this product is expected to reach 53 billion in 2020), and the commercial exchanges are surpassing pre-Covid-19 levels in East Africa, too, thanks to the enhanced exports from Kenya to the other countries of the East African Community.
Mexico, which is the largest egg consumer per capita in the world, has recently authorised the import of eggs coming from all over Brazil. The country is important for Brazil’s agricultural sector, and not just for the eggs market, but also for the recognition of the Brazilian health standards. Various organizations, such as the Brazilian Animal Protein Association, Agricultural Adidance in Mexico, Mapa and the respective Ministries of Foreign Affairs have joined efforts to come to this new agreement.
Kenya’s exports to the countries of the East African Community (Uganda, Tanzania and Rwanda) have surpassed the pre-Covid-19 period, and food and beverages were the main export category in August (accounting for 42% of the total exports). Kenya’s exports outside of the East African Community (to other African countries, to Europe or to the United States), on the other hand, remained subdued due to the coronavirus restrictions.