With the impacts of the pandemic on food and nutrition being felt around the region, planning is needed to avoid higher food prices, decreased nutrition and reduced food security.
COVID-19 has captured the full attention of governments across the world. Their immediate focus has been on strategies to manage both the pandemic from a public health perspective and the economic and financial fallout through the implementation of varying economic rescue packages. While understandably these are key priorities, people living in the locked down cities of Asia and the Pacific are worrying about fresh food markets that are closed, dwindling stocks in supermarkets and the broken supply chains of local fruit and vegetable deliveries while food is held up on the wharves. It’s getting harder every day to get food.
We need to start thinking about the possible impacts of the current crisis on food and nutrition security, and what options exist for governments to minimize food and nutrition security risks.
Reduced working hours or unemployment will cut incomes for tens of millions of workers in Asia. This reality is well underway. For many, household income could easily fall to levels that cause severe financial hardship, and both the quantity and quality of the weekly food basket will deteriorate. For families who live paycheck to paycheck, their resilience to reduced incomes is often limited, and the impact of reduced income will be rapid and potentially severe.
While efforts are underway to hand out basic food, it may not cover the nutrition needs of populations and definitely not those of children and pregnant women. Low nutrition food, even when consumed for just for a couple of months, has long-term impacts on children’s brain development and overall health.
Although businesses working in the essential services area, including food imports, deliveries and sales, are typically open for business, functionality is low as staff are unable to come to work, or are caught up with 14-day self-isolation. Clearing food imports at the ports has slowed down with a shortage of workers. The entire whole food processing sector is likely to suffer from worker shortages, at least in the coming 3 to 4 months.
As a result, supply chains are functioning at reduced capacity, causing supply side stresses. With food consumption being relatively constant, buffer stocks currently allow supplies to be maintained, however supply side shortages can easily flow through to price rises. In some countries, we can already observe increased prices in distant provinces. There is evidence that fruit and vegetable farmers using e-commerce platforms are already demanding higher prices.
Lower income households disproportionately feel the impact of reduced financial resources and the effect of increased food prices. The flow-on effects of poor food and nutrition security at the household level in varying contexts are well-documented and have impacts far beyond health and nutrition. Countries are varied in their safety net mitigation mechanisms, but fundamentally well targeted assistance is required, whether through direct household cash transfers, food banks, food stamps or other similar means.
Timeliness is critical, and governments need to develop responsive policies and programs without hesitation. In response to the food price hikes of 2010/2011, many governments designed programs which were implemented to address the stresses at the time. New programs should consider the lessons learned from that period and be targeted for effectiveness within the constraints of a supply chain operating in a partial lockdown situation.
If not addressed, COVID-19 could hike food prices in Asia and the Pacific.
Looking forward 3 to 6 months, of real concern is the impact of COVID-19 on food production and supply. We know in many countries there are currently farm labor shortages as workers can’t travel to farms, are quarantined, ill, or caring for ill family members. This will affect the timeliness of farm operations, and the ability to complete various farm operations. Fertilizer shortages are being reported as supply chains in the production and transport phases are disrupted, and this will translate to a reduction in crop yields.
Some countries have implemented or are considering implementing a ban on rice exports, as in 2010/2011 which could cause alarm that protectionism has not been abandoned. Rice export bans in 2011 were a key reason behind rice price hikes at that time.
Countries vary in the level of buffer stocks they carry in the public and private sector. However, a slowdown in the supply chain from upstream of the farm gate, at the producer level, and post farm through processor to the fresh market or supermarket is underway, reducing stocks. Processed food items, with more complex supply chains, have a greater risk of shortages. It will be critical that governments prioritize policies and investments in the food production value chain to reduce the level of COVID-19 impacts on the supply chain to control food price rises.
Governments can take a range of short-term actions to ensure domestic food supplies. Local food systems will have enhanced importance. Open borders and regular revision towards more targeted local lockdown policies to keep transport links open and food processors working are essential. Depending on the situation, each DMC should study its circumstances to ease the burden of access to inputs. Short term output-based stimulus payments can act as an incentive for farmers, including bonus payments per ton delivered, or matching grant programs for rapid adoption of proven and simple on farm drying and storage technologies to reduce losses.
The focus should be on staples food products and fruit and vegetables. With the closure of markets, food delivery services and mobile food vans will be important, which can be brought to operation by the hundreds of stall holders from the now defunct markets. It will be crucial to help farmers stay connected with through the crises and lock downs increasingly decentralized markets and consumers. In the medium term, investments need to be made in upgrading of wholesale markets with proper cold storage facilities, which has been neglected for years.
Ultimately, the immediate impacts of COVID-19 on food and nutrition security are just beginning to emerge and many additional tensions will arise in the coming weeks, months and even years. While the focus of most governments is presently on health, financial and economic impacts, planning is required today to avoid higher food prices, impact on populations’ nutrition status and reduced food security.
Reducing shocks in the food supply chain will help contain food price rises and will be a lower cost solution than managing food shortages, higher prices and the risk of social instability. The time to act is now, not later.
This was originally published in 7 April 2020 by ADB.org (link)
Principal Natural Resources and Agriculture Specialist
Advisor and Chief of Knowledge Advisory Services Center