The coronavirus pandemic poses additional challenges to least developed countries, on top of the severe issues determined by conflicts and extreme weather events even before the global health crisis started. Since they are all characterized by a heavy dependence on food imports, the disruptions to the global food supply chains caused by the pandemic must be quickly repaired in order to avoid catastrophic food shortages. In Latin America, both Brazil and Bolivia are struggling with the restrictions to movement imposed by the respective governments: the most affected are people living in favela neighborhoods, farmers and poultry producers.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Least developed countries (LDCs) account for around 3% of global food imports (more than double the world average): this strong dependence makes them very vulnerable to any disruptions that may occur along the global food supply chain (such as the one caused by the coronavirus pandemic), and therefore maintaining open and functional supply chains is paramount to avoid major food shortages. Excluding the USA, the four biggest suppliers of food products to LDCs are developing countries (such as India, South Africa, Brazil and Thailand), and the most common imported food items are staple foods like grains, fish, dairy products and edible oils.
The restrictions to movement and trade imposed by the government of Bolivia to limit the spread of the coronavirus pandemic threaten the regular supply of medicines and basic foodstuffs to the internal market: for example, according to Beni’s Federation of Livestock Farmers (Federación de Ganaderos de Beni), the daily transportation of around 1400 bovines from the city of Trinidad to Santa Cruz and La Paz suffered severe limitations. Furthermore, the blockages are damaging the poultry supply chain and many agricultural products are rotting inside trucks that are stuck at the blocking points.
Even before the pandemic, extreme weather events, conflicts and persistent poverty increased the levels of food insecurity worldwide, and the coronavirus pandemic further worsened this situation; especially for vulnerable people. The 2020 Global Nutrition Report underlines that Brazil is missing its nutrition targets for 2025. The most food insecure in the country are low-income people living in cities: more in particular, the food supply chains in Belo Horizonte and São Paulo fail to provide sufficient fresh food in favela neighbourhoods. Budgetary constraints and limited storage options further aggravate this issue in informal settlements.
IMPACT ON COMMODITIES AND FOOD PRICES
Chinese soybean imports from the United States continue to rise despite the competition from Brazil and the worsening trade relationship between the two countries. Furthermore, the US Department of Agriculture expects higher outputs during the next marketing year, meaning that (if tariff exemptions for soybeans remain in place) the situation is likely to remain so in the future. Meanwhile, the fear for new lockdown measures and for a lower vegetable output next year brought consumers to hoard supermarkets in Morocco, leading prices to increase considerably.
Despite the deteriorating trade relationship between the United States and China, in the recent months the latter has been active in buying US soybeans: in June, it imported 11.16 tons of soybeans, and in July the import volumes totalled 10.09 tons. Following the impact of heavy rains and flooding during the planting season last year, the US is set to see a recovery in soybean outputs during the 2020/21 marketing year: the US Department of Agriculture estimates that the final output will reach 120.4 tons (up 25% year-on-year). Therefore, assuming that tariff exemptions for US soybeans remain in place, Chinese buyers should continue to purchase this commodity from the United States.
The coronavirus pandemic continues to determine a high price volatility for Morocco’s fresh vegetables: last week, people hoarded supermarkets and grocery stores, favouring food products that don’t wither quickly (onions and carrots, for example), out of fear for new lockdown measures in response to the growing number of Covid-19 cases in the country, and for a future low output caused by a recent rainfall deficit in the country. The effect of this rapid increase in demand for fresh vegetables is a hike in prices (especially for retail).
Two major agriculture development projects are tackling some of the many challenges posed by the coronavirus pandemic on the agriculture sector in Latin America and the Middle East: the World Bank will develop an e-commerce platform and a database of agricultural producers to create a connection between smallholder farmers and schools, while the Danish Refugee Council will provide better business opportunities, productive assets and capacity development to farmers in Iraq. In the UK, on the other hand, the government undertook to leverage on the characteristics of two peripheral regions of the country to improve the production of milk, cheese and yoghurt.
A new project funded by the UK government’s Strength in Places Fund has already secured GBP 50,000 and could unlock up to an additional GBP 20,000 to make South-West Scotland and North-West England key players in the production of milk and cheese. More in particular, the fund aims at developing research and innovation in peripheral regions of the country and for industries that are fundamental for those specific geographical regions. In this case, South-West Scotland and Cumbria have large fields that are perfect for growing grass and milking cows, big factories, and an artisanal production of ice cream, cheese and yoghurt.
Guatemala is suffering severe economic hardship and uncertainty due to the movement restrictions following the coronavirus outbreak, which are causing disruptions all along the food supply chain. A World Bank pilot is investing in digital technology that can promote food security, ensure food safety and safeguard the farmers’ livelihoods. More in particular, the DIGITAGRO pilot will develop digital tools to support the country’s farmers, such as an e-commerce platform to match schools’ food demand with supply from smallholders, and a comprehensive database of agricultural producers that can guarantee a reliable source of food.
The Danish Refugee Council (a non-governmental organization that is active in humanitarian projects all around the world) is supporting the recovery of the agricultural sector in Iraq, which emerges from nearly four years of conflict and displacement and is currently facing the challenges posed by the coronavirus pandemic (closed borders, curfews and restrictions on movement). The program the organization is implementing in the country will assist targeted local agricultural producers by upgrading productive assets, promoting skills transfer, and creating business opportunities and jobs in the local area.
The coronavirus pandemic heavily impacted on Latin American countries’ agricultural production (and therefore on poverty and food security rates): for example, if further aggravated the difficulties around coffee production in El Salvador, which was also hampered by an earthquake, a tropical storm and a fungus coffee disease (the coffee leaf rust). However, it has also sped up digitalization processes in the country that are particularly beneficial for smallholders; especially for what concerns e-commerce, which grants the possibility to access larger and more varied markets.
El Salvador’s coffee sector suffered the effects of a global pandemic, a 7.4 magnitude earthquake and a tropical storm in quick succession, and now it is also affected by the ongoing coffee leaf rust devastation and the international price crisis. The country shares a border with Guatemala and Honduras, and benefits from the same high altitudes and volcanic soil as its better-known coffee-producing neighbours, but it has started developing outstanding coffees only recently (like the Paca and Pacamara varieties). The country’s coffee production was on a slow climb from the mid-2000s to the 2010s, but now the pandemic is making it hard for the sector to carry out the necessary post-harvest processes, affecting production.
The coronavirus pandemic’s impact on food security and poverty rates has no recent precedent: in Latin America and the Caribbean, poverty is expected to increase by 4.4% (an additional 30 million people), for example. In such a scenario, it is important to bring innovative solutions to the agri-food system: digitization, for instance, has become a key driver for rural transformation, creating new opportunities for farmers. Currently, the adoption of digital technologies among smallholders in the region is low, also because of the lack of specific public policies and poor connectivity, but the pandemic has accelerated the digitalization processes, with e-commerce being the most visible.