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FAO Liaison Office for North America

An Early Assessment of the impacts of COVID-19 on Global Food Supply Chains

02/10/2020

2 October 2020, Washington, DC – FAO North America and the Center for Strategic and International Studies (CSIS) hosted an online discussion on food systems-wide shocks that have been caused by the COVID-19 pandemic and the expectations for the future. Caitlin Welsh, Director of the CSIS Global Food Security Program, moderated the session. 

Vimlendra Sharan, Director of FAO North America, opened the session highlighting that “COVID-19 has imposed shocks on all segments of food supply chains, simultaneously affecting farm production, food processing, transport and logistics, and final demand.”

Maximo Torero, Chief Economist at FAO, provided an overview of the major developments in global food supply chains and markets since the onset of the COVID19 pandemic. He stated that the main supply disruptions during COVID-19 have been shortages in agricultural labor, transport restrictions, lower capacity utilization of processing facilities, and internal distribution disruptions. He added that while there are still some marine transportation disruptions, there are no longer trade restrictions such as the ones placed by 33 countries at the beginning of a pandemic.

Looking to the future, he noted that the demand side would be the real problem. The International Monetary Fund (IMF) projects a 3 percent recession, while the World Bank expects up to 5.2 percent in 2020. “Food availability is not the problem, it is access to food,” emphasized Torero, as he explained that food insecurity as a result of the pandemic will most likely be due to current and a future reduction in purchasing capacity associated with job loss. According to FAO predictions, there might be an increase of 132 million malnourished people in 2020 alone. He underlined the need for programs to reactivate demand.

How can we ensure access to food?

Different interventions can bridge the gap between producers not being able to sell and consumers not being able to buy, said Torero. He highlighted how recent interventions in the U.S. that buy high-value produce such as fruits and vegetables from farmers and distribute it to food banks as one good option.

Rose Souza Richards, Health Manager at the International Seed Federation, an NGO representing the seed industry at a global level, shared their experience with the impact of the pandemic. With seeds deemed as “critical to ensuring that the farmers can carry on a continue growing the crops during the coming planting season,” she said that they were able to continue their work.

Rob Vos, Director of the Markets, Trade, and Institutions Division at IFPRI, underscored the importance of logistics around the world and building storage capacity and resilience of markets. According to him, we need to look at the bigger picture given that food systems have been relatively well supplied, but agreed with Torero that perishable foods and their consumption are a key indicator of the capacity of people to access a nutritious diet. He also underscored the importance of the lasting impact of the digitalization of distribution networks both big and small.

Can we expect more regional/local trade?

Torero explained that in some cases, more regional trade can be considered, but many countries cannot be self-sufficient in many products, such as fruits or fish, because of the climatic conditions. Rose added that “there is no country today that is self-sufficient in seed production.”

In his closing remarks, Torero shared that data, market transparency, technological innovation, a robust infrastructure, and good governance will be key to address this pandemic and future challenge.  

The speakers concluded that food supply chains adopted quickly to initial interruptions caused by COVID-19, and that food markets remain well supplied. Speakers emphasized that this pandemic has had very different effects than the ones observed during the 2008 financial crisis, and that uncertainty is still high. It is clear that given the predictions of the economic recession provided by multilateral organizations, food availability will not be the problem; it will be access to a nutritious and healthy diet.

 

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