The North Korean agricultural sector (which employed around 23% of the country’s labor force in 2012 despite unfavorable climate, terrain and soil conditions) takes a downturn as major floods have recently hit 600 hectares of rice fields in the North Hwanghae province, which is the main rice producer. The country’s economy is now carrying the weight of international sanctions, a plummeting economic activity with China due to the coronavirus pandemic, and an unfavorable weather. In Indonesia, on the other hand, agriculture is the only sector that is growing amid the difficulties posed by the coronavirus lockdown measures, but farmers often lack technologies and an easy access to the market.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
In Indonesia, agriculture is preventing the country’s economy to fall into a deep contraction as it continues growing by 2.2%, while sectors like trade, construction and transportation are all suffering negative growth caused by the effects of the coronavirus pandemic. However, most of the farmers in Indonesia don’t have access to new technology (high-yield seeds and pesticide management), and they also lack an easy access to the market in many cases: for example, farmers in South Sumatra recently protested against the fact that the market offered the equivalent of USD 0.013 cents per kg for their tomatoes, by dumping and destroying their produce.
Historic rainfall levels in North Korea (which is particularly vulnerable to flooding because it lacks adequate infrastructure) are threatening the country’s economy, which is already vulnerable because of the coronavirus lockdown. The torrential rains have caused damage to North Korean homes and flooded vast rice fields in the country, intensifying the concerns about a food supply shortage: according to the state media, for example, last week 600 hectares of rice fields and around 900 homes were destroyed in the North Hwanghae province (the biggest rice-producing province in the country).
JBS (the world’s biggest meat company), which slaughters around 35,000 cattle a day in Brazil, is coming under increasing pressure from investors over its environmental record. The largest bank in Europe is considering whether to stop investing in the company, after a series of investigations rose concerns over some Amazon deforestation issues in its beef supply chain. For the moment, the company does not have an action plan in place for monitoring the cattle it buys, in order to ascertain that it does not originate from farms that are involved in rainforest destruction.
IMPACT ON COMMODITIES AND FOOD PRICES
Analysts expect Australia to fill the impending European grains export shortfall, caused by a poor harvest in the main grains-producing countries in the EU (France, Germany, Poland, Romania and Bulgaria). In fact, Australia benefited from widespread rain last week, while the European harvest was hit by drought this year, which will cause the EU’s wheat export volumes to fall to around 10 million metric tons. However, the state of Victoria, which is one of the main wheat producing states in Australia, has recently recorded an increase in Covid-19 cases, which led to more rigid travel restrictions. This is why farmers in Victoria are now asking the local authorities to ease such barriers to movement in order to boost seasonal labour availability.
The global grains markets witnessed a poor European harvest (which was hampered by the drought) in France, Germany, Poland, Romania and Bulgaria (the biggest grain-growing nations in the EU), so that export volumes are set to fall from 38 million tons of wheat during last year’s harvest, to the current 10 million tons. The only country that could offset this shortfall in the European grains production is Australia, which should seize this opportunity to push the European Union’s import demand. More in particular, Europe could import double the volume of canola it purchased from Australia last year, and also a considerable amount of wheat.
Unless the local authorities ease the border restrictions that limit the spread of the coronavirus pandemic in the Australian state of Victoria, agriculture and livestock are going to suffer heavy losses. In fact, in order the tackle a major labour shortage, the president of the Victorian Farmers Federation claims that letting in interstate and overseas workers is necessary to harvest crops and manage livestock. More in particular, additional workers are needed to collect citrus fruits, and shortly also pears, apples, grapes and other crops whose harvests are around the corner.
While the United Nations keep providing humanitarian aid to Lebanon, to help the country recover from the financial meltdown (that is causing an increase in food prices and food shortages) and from the explosion that destroyed Beirut’s port and grain silos, by shipping tons of flour to the country, China is helping Ethiopia reduce water scarcity in its most remote areas by building cellars that collect water during the rainy season and then provide a stable water source for different purposes during the dry season. In the United Kingdom, the largest manufacturer of frozen potato products is providing financial support to potato farmers affected by the effects of the coronavirus pandemic and other climate change phenomena.
One of the United Kingdom’s leading food brands has recently announced a new campaign to help farmers adapt to climate change phenomena: more in particular, the company will provide potato farmers with a GBP 25 million investment that was designed to help the commodity’s supply chain fight the impact of climate change and of the coronavirus pandemic. In fact, the British potato farmers faced two of the worst crops in 40 years due to a major drought on the one hand, and to torrential rain on the other; furthermore, they risked wasting tons of potatoes due to the shutdowns in the hospitality industry caused by the pandemic.
The World Food Programme will ship 50,000 tons of wheat flour to Beirut, which are sufficient to supply Lebanon for around three months and avert a food crisis that was expected after the explosion that killed 160 people and destroyed grain silos in Beirut’s port last week. Furthermore, the country will rely on privately owned mills to ship wheat from Ukraine, Russia and other European countries. Meanwhile, this catastrophe has exacerbated the country’s financial meltdown, which is causing food inflation rates (which stood at 250% in June) to grow even more.
Ethiopia has been long troubled by drought, and even today many families that live in remote areas of the country have to walk miles to collect water every day. China’s leading construction machinery manufacturer and the China Foundation for Poverty Alleviation have joined efforts to reduce water scarcity in Ethiopia by building various water cellars for the villagers in different water-deficient areas of the country. Such cellars store up water during the rainy season to guarantee stable water sources during the dry season, which can be used both to meet people’s basic needs for water and for agricultural irrigation.
The North African migrant workers and refugees in Lebanon will be the ones suffering the most from food insecurity in case the country (which is facing the effects of an economic and health crisis and of a huge explosion at the same time) does not receive sufficient support in the following months. Meanwhile, in Latin America, the governments of Peru and Cambodia are joining efforts in fighting the coronavirus pandemic by enhancing healthcare services in the capital cities and by improving the monitoring and surveillance on border areas.
Migrant workers and refugees from North Africa will probably suffer the most as food insecurity threatens Lebanon following last week’s explosion in Beirut’s port, according to the International Organization for Migration. In fact, prior to the blast they were already among those most affected by food insecurity, with about 62% of them reporting inadequate access to food in July. Furthermore, the number of migrant workers from North Africa that are stranded in Lebanon because of the coronavirus travel restrictions is likely to increase, and many of them will be left with no money from their employer in crowded or unsanitary conditions, without access to clean water.
Peru and Colombia are currently the 7th and 8th countries with more Covid-19 cases (respectively 483,133 and 397,623 confirmed cases). The governments of Peru and Colombia have recently announced a bilateral plan to joint efforts in countering the effects of the coronavirus pandemic, by increasing controls, improving the monitoring of new cases and enhance the quality of the healthcare service provided in the cities of Lima and Bogotá. The plan will be implemented over a period of one year.