Hog and maize farmers in Minnesota are still struggling to get back on track after the closure of many meatpacking and ethanol plants caused by the coronavirus pandemic: in fact, despite some of them actually reopened, price fluctuations are still affecting their earnings, and many expect financial difficulties in the next months. Furthermore, people and crops may be affected by Hurricane Laura in Texas and Louisiana, which has already damaged coffee plantations and caused power outages in some of Cuba’s provinces.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Some of Minnesota’s hog farmers managed to survive the closure of many meat processing plants caused by the growing number of Covid-19 cases among the workers, but their economic outlook remains negative heading into the fall, and potentially into next year. Farmers had to euthanize many pigs (one specific farmers reported USD 500,000 in losses caused by euthanized animals) and pig prices have been low for most of the summer: based on the current prices, farmers pay USD 135 to 140 on average to raise one pig, and can sell them for only USD 110 to 115 each. While some meat processing and ethanol plants (which purchase maize from farmers) have reopened, many farmers still expect financial difficulties.
Hurricane Laura (currently a Category 2) is expected to hit Louisiana and Texas coasts this week, producing extreme winds and flash flooding and affecting at least 20 million people in its path. So far, it caused considerable damages in Cuba, determining power outages in Guantánamo (Cuba’s easternmost province) that affected around 180,900 people, bringing down trees and electricity poles, and damaging coffee plantations and other crops in the Maisí province.
IMPACT ON COMMODITIES AND FOOD PRICES
An overall dry weather and some recurring spring frosts hampered the production of wheat and barley in Europe: more in particular, France, which is the main grains-producing country in the European Union, estimates a reduction by 25% in the production of wheat and by 18% in the production of barley, compared with last year’s figures. Ethiopia, on the other hand, managed to create more trade opportunities for around 10,000 smallholder families that own a farm that is suitable for growing avocadoes in the Koga region, by developing a National Cool Logistics Network. This initiative has recently paid off, as the first ever fruit export reached Djibouti by train and will be shipped to Europe in less than one month.
An extremely dry weather and severe spring frosts heavily affected wheat production in southern and central Europe, which was recently pegged by the US Department of Agriculture at 139.5 million tons, that constitutes a 10% reduction (15.5 million tons) compared to last year. The production of barley, on the other hand, went much better, with only a slight reduction from last years’ figures (62.5 million tons, against 63 million tons). More in particular, France remains the biggest grain producer and exporter in the European Union, and it estimated a 25% fall in wheat output and 18% fall in barley output, compared to the 2019 harvest.
For the first time, Ethiopia exported fruit to another country (Djibouti, in this case) thanks to the development of a National Cool Logistics Network, which allowed it to create a cool logistics corridor for the export of perishables. The container that reached the port of Djibouti by train contained 24 tons of avocados, sourced from dozens of local farmers from the Koga area, and they will be shipped from Djibouti to Europe in about 20 days. In the coming years, Ethiopia will be probably able to increase its exports of fruit and vegetables (and therefore to earn foreign currency and to create a positive impact for the whole country) thanks to reliable and competitive logistics solutions.
Three initiatives to boost production and exports, streamline the food supply chains and make it more sustainable in Australia, Tanzania and the United Kingdom: the Australian Swinburne University developed a new technology that is based on the internet of things (IoT) system that will make many processes related to the management of the food products’ quality and of the shipping data automatic; an infrastructure development project will lead to the construction of a hydroelectric dam on Tanzania’s Rufiji river that will boost the country’s power exports and goods production; the UK could issue a new law that will require companies to ensure that raw materials in the origin countries were not collected through unsustainable practices.
The Swinburne University of Technology in Australia aims at improving the quality of the food products some companies produce by making supply chains and operations more efficient thanks to a dozen internet of things-based pilots. For example, a food company has recently started using the Swinburne University’s technology to track the quality of milk produced at 100 dairy farms: traditionally, the management of milk quality and shipping data was carried out manually, while internet of things technologies (which do not require human-to-human or human-to-computer interactions) allow for an automated way to ensure that milk purchased from farms will be delivered to specific sites for processing in the most efficient manner.
The Julius Nyerere Hydropower Project is destined to create a hydroelectric dam along Tanzania’s Rufiji river, which upon completion is expected to produce around 2,115 megawatts of electricity, that will grant a surplus of power for export. Thanks to the dam, Tanzania will have a comparative advantage in several fronts over other East African Community member states and beyond, given the size of the project. Furthermore, the availability of enough power in the country will lead to a stable supply, and therefore will allow for the construction of many industries and factories for the production of different goods.
Since it will be the host of the 2021 UN Climate Change Conference, the United Kingdom is under pressure to show international leadership on climate issues. A proposed law could make it illegal to use products that fail to comply with laws that protect the environment in the origin nations: therefore, it would require large companies operating in the UK to show where commodities such as cocoa, soy, rubber and palm oil originated from. This is particularly relevant for products that are connected to illegal deforestation in the Amazon rainforest, which has increased sharply this year and is responsible for around 11% of the global greenhouse gas emissions.
Despite leading the climate action in Africa, Sub-Saharan countries are still lagging behind for what concerns the achievement of the UN Sustainable Development Goals related to the eradication of hunger, to the improvement of education and to gender equality, even though interesting initiatives do exist, such as the African Women in Agribusiness Network (which operates in 42 African countries). Furthermore, the continent is facing additional challenges that limit its ability to achieve some of the 17 Goals, such as the European Union’s Common Agricultural Policy, which allows the European exporters to sell agricultural products at low prices in Global South’s markets, eliminating the competition for developing-country farmers.
The African Women in Agribusiness Network operates in 42 African countries, linking 1600 women’s networks in different sectors: for example, one of them (Shais Foods) transforms grain-based mono-diets in Zambia by offering locally grown millet, sorghum, cassava, soybean and maize to malnourished children. Now that the coronavirus pandemic has made it more difficult to access quality raw materials, Shais Foods has started purchasing and selling products online and gained more consumers during the lockdown, instead of losing them.
The 2020 Sustainable Development Report, which tracks the achievement of the UN’s 17 Sustainable Development Goals, found that Sub-Saharan countries are leading in taking climate action, but still perform poorly when it comes to achieving other goals, such as those related to education access, gender equality and ending hunger and malnutrition. According to the former executive secretary of the UN Economic Commission for Africa, in order to see more improvements in education and health, many of those countries need to transform the structures of their economies; for example, by building infrastructure with sustainable materials and choosing value chains that reduce the travelling of commodities.
The Common Agricultural Policy (CAP) subsidizes European farmers with EUR 42 billion annually. Together with the abolition of market-regulation mechanisms, these subsidies have substantially strengthened the EU producers’ ability to export agricultural products at low prices to markets in the Global South, giving them a substantial competitive advantage in those foreign markets, such as Africa. Therefore, the EU subsidies to its own farmers have enabled them to undersell the African farmers, contributing to food insecurity in the continent (even before the pandemic started).