by Clarissa Sim
Breaking food supply chains drive the global food crisis
The COVID-19 pandemic has driven farmers to dump 3.7 million gallons of fresh milk per day. One chicken processor has been destroying 750,000 unhatched eggs each week. A farmer has buried 1 million pounds of onions. With the world on lockdowns and movement restrictions, it has resulted in transport impediments, labour shortages and a drastic fall in demand. Food supply chains involving farmers, processing plants, shipping and retailers have been deeply affected by this and it has prevented farmers from getting their products to the markets. The broken food supply chain has resulted in this enormous amount of food gone to waste.
The closure of restaurants, hotels, schools and entertainment venues has caused the global demand to plummet. The resulting sharp downturn in prices makes it no longer worth the cost to harvest these crops. According to a report from the Food and Agricultural Policy Research Institute, prices for crops are expected to drop by as much as 10% and prices of livestock by as much as 12%. A farmer shared that “We are at the point where we are considering to close down because we cannot maintain the farm given the costs involved.”. What are the costs involved? They are labour, machinery, purchased seeds, feed fertilisers, transportation and land costs. As such, in terms of cost sense and the lack of profit, it is understandable why sadly farmers are left with not much choice but to throw out their crops.
To reduce the amount of crops being thrown out, people and even animals are being encouraged to consume foods that they do not typically eat. In Belgium, there have been calls for people to eat fries at least twice a week if not an estimated 750,000 tons of potatoes would be at risk of being thrown away. In India, farmers are feeding strawberries to their cows which were originally meant for tourist consumption.
This massive agricultural waste is an unsettling backdrop to the images of empty shelves in our supermarkets flooding our social media pages. It is clear that there is a widespread disruption to demand and supply in the food supply chain. On one hand, panic buying is driving food shortages; on the other hand farmers struggle to find customers. In India, e-commerce saw a 106 per cent growth in orders for cooking oil and an overall 10 per cent increase in the food sector due to panic buying. In our local context, Singaporeans were seen rushing to supermarkets to stock up on food items such as eggs and meat soon after the Malaysian government announced a nationwide lockdown. Even at 11.30pm, there were easily over 50 people in the queue at the Yishun NTUC FairPrice outlet. This standstill in out-of-home consumption and the significant increase in at-home consumption has made it challenging for stakeholders to adapt to this fast changing and chaotic landscape.
Many question why this surplus is not being redirected to those in need amidst the growing demand for food. But farmers have been donating, until food banks imposed limits on how much perishable food they can absorb. The logistical hurdles in distribution makes it near-impossible to ensure that crops are being transported to where they are needed the most. For example, dozens of municipal governments in Argentina have blocked grains trucks from entering and exiting the towns to slow the spread of the virus. As a result, soybeans are not transported to the mill plants, dragging down the country’s export of soybean. Similarly, more food rotted when refrigerated cargo containers of chicken from the US to China had to be diverted to other ports, with limited power supply capacity.
Governments have also imposed limits on exports to safeguard domestic food security. Vietnam, the world’s third-largest rice exporter, temporarily suspended rice export contracts. Egypt also halted its exports for legumes to preserve local supply. However, based on the reviews of local inventories, both countries produce far more than they consume and have sufficient stock. Export bans by key export players would limit global supply and will cause prices of food to soar which can in turn result in a food inflation crisis.
Food monopolisation and the lack of diversity has left the food supply in a vulnerable position. The fundamental issue lies in the consolidation of market power which has caused nearly 500 small meatpackers in the US to be driven out of the industry. The closure of several meat processing plants from the “Big Four” meatpacking companies in the US has triggered mass meat shortages. This has led to a boom in business for small, independently owned meat processors. However, to aggravate this matter, the meat from these big players cannot simply be rerouted to small-scale slaughterhouses to be processed. Furthermore, the current regulatory burdens make it challenging for small slaughterhouses to survive in the market resulting in infrastructural bottlenecks.
The world was awfully unprepared for this pandemic. With massive layoffs, families are struggling to put food on the table.
Thus, there is a need to keep the gears of the supply chains moving and actively seek international cooperation to keep trade open such that countries can prevent food shortages and protect the most vulnerable populations. This helps to prevent stockpiling in the richer nations to ensure that poor nations also get access to what they need. To prevent future food crises in the future, countries should also invest in improving emergency outbreak preparedness programmes and ensuring diversification of suppliers to build resilience in the food supply chains.
Clarissa is an undergraduate studying Social Work at the Singapore University of Social Sciences (SUSS). She is passionate about world issues and social issues. A firm believer in being a positive change agent to the world, she hopes to inspire a domino effect within others. Being a curious learner, she also desires to be a voice for various world issues.