Centro de inversiones de la FAO

COVID-19 causes havoc to supply chains for fresh fruits and vegetables

The pandemic has brought hardships and moments of resilience for the sector

Workers on a strawberry field in Moldova

Getting fruit and vegetables from the fields to the table is extra challenging amid COVID-19 – from restrictions on movement to high transport costs and closed markets.

The sector is also facing big changes in demand and prices. While the prices of some products are skyrocketing, especially those thought to boost immunity like lemons and garlic, others are plummeting. 

In these troubled times, real-time access to market information is crucial. To help fruit and vegetable producers navigate this new situation, the European Bank for Reconstruction and Development (EBRD) and FAO have stepped up their efforts to provide data on evolving market realities.

“Fruits and vegetables are extremely perishable and need to get to the market as quickly as possible. But trade opportunities are limited because everything in the value chain got disrupted, markets closed, countries restricted border crossings, ports shut down, transportation costs increased, and so on,” FAO Economist Andriy Yarmak said. 

He explained that FAO and the EBRD are trying to provide, via widely used platforms and policy dialogue, the most up-to-date market information possible to producers and agribusinesses, mainly from but not limited to Georgia, Moldova, Tajikistan, Ukraine and Uzbekistan. 

Yarmak added that the idea is “to limit as best we can the losses that will affect the entire supply chain, which are likely to be substantial despite our efforts.”

Natalya Zhukova,  Director, Head of EBRD Agribusiness, noted that EBRD and FAO have a good track record of bringing public and private sector actors together to resolve bottlenecks along supply chains.

“And we will continue to facilitate policy dialogue to find solutions in line with COVID-19 safety directives,” she said.  

Spreading ingenuity

Apart from adjusting to changing demand, fruit and vegetable producers need to find solutions to concrete production and distribution challenges.

In countries that do not have enough people to pick fruit and vegetables in time, produce could rot in the fields. Fresh produce could also spoil in containers if there are shipping and offloading delays.

Some producers are facing these challenges with ingenuity, reinventing distribution and sales channels. Online sales and home deliveries are booming, Yarmak pointed out, even though they still only represent a fraction of sales.

In some instances, farmers are contracting with local taxi drivers – who have also seen their businesses dwindle from the crisis – to deliver fresh produce directly to consumers’ homes. Other farmers are making deals with well-known food delivery companies. 

Efforts to find new distribution channels are critical in countries where local authorities have shuttered open-air, wholesale and street markets to prevent the virus’ spread. 

These are often the only market outlets for small-scale growers in countries across Eastern Europe, the Caucasus and Central Asia, where EBRD and FAO have recently been helping fruit and vegetable producers modernize their operations to become more competitive. The percentage of fresh produce sold through supermarkets is much lower in these regions than in Western Europe.

And with tourism grinding to a halt, farmers and traders of fresh produce have also lost the hotel, restaurant and catering market.

For some countries facing field labour shortages, labour exchanges between companies and farmers – whereby companies on lockdown continue paying the salaries of their employees who agree to harvest farmers’ crops – have taken hold in places like Germany.

FAO and the EBRD are sharing these good ideas and knowledge via webinars, and contributing to interactive platforms like Eastfruit used by the industry.

Calling on policy-makers

As the pandemic continues to evolve, action, policies and investments need to be tailored to the specific realities and needs in each country. 

For a country like Ukraine, which consumes what it grows in the horticulture sector, the situation is more stable. But countries that rely on imports or exports are suffering the most from COVID-19. The collapse in oil prices, for example, has reduced the purchasing power of big importing countries, drying up normally reliable markets for countries like Moldova and Uzbekistan.

Farmers throughout the region are also facing obstacles in accessing financing and productive inputs for the coming season.

Many of these issues, particularly access to financing, require the intervention of public authorities. Farmers with fixed assets like fruit trees do not have many choices and could benefit from public policy decisions like a moratorium on loan repayments for tree plantings for indebted producers, or facilitated access to credit for those needing to reorient their production, depending on local needs. 

FAO and EBRD will now join forces to make this happen.

Photo credit ©FAO/Dorin Goian