FAO’s Big Data tool on food chains
under the COVID-19 pandemic


NEWS DIGEST 28/7/2020

Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.

A man inspects coffee beans in a stall in the area of Merkato, in Addis Ababa.
©FAO/Eduardo Soteras

FOOD CHAIN DISRUPTIONS

In Burkina Faso, one in five children is chronically malnourished: because of the restrictions to movement that are necessary to contain the spread of the coronavirus, food prices have spiked and many villages have bees isolated from food and medical aid, causing 12 million of the country's 20 million residents to become food insecure, and raising the predicted number of infant deaths to 10,000 per month during 2020. In Rojava, which is still involved in the Syrian Kurdish-Islamist conflict and in the Rojava-Turkey conflict, similar issues are caused by the cumulative effect of a water crisis and of field destructions caused by ISIS.

ISIS' fires and water crisis endanger Rojava's food security

The Autonomous Administration of North and East Syria, also known as Rojava, gained its autonomy in 2012 in the context of the Syrian civil war. Right now, Rojava is facing an unprecedented economic crisis, caused by different factors, including a water crisis, many years of war and a devaluation of its currency. The autonomous region is still under the concerted attack of the Turkish forces (alarmed by the presence of the Kurds along its southern border) and ISIS, which has been burning Rojava's fields recently (around 435,000 hectares), endangering the region's food security.

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Restrictions caused by Covid-19 are isolating villages from food aid and increasing infant mortality in Burkina Faso

With the markets still closed in Burkina Faso due the restrictions imposed to contain the spread of the coronavirus pandemic, farmers are selling fewer vegetables and villages are isolated from food and medical aid. This situation will cause 10,000 infant deaths per month over the first year of the pandemic, according to the Lancet medical journal, while 550,000 additional children are suffering from wasting (low weight for height, a clear predictor of malnutrition among children under five). According the World Health Organization's head of nutrition, the effects of the pandemic on food security will continue throughout many years.

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IMPACT ON COMMODITIES AND FOOD PRICES

Food prices have increased in US grocery stores over the last year, mainly because of the more recent coronavirus-related disruptions to the food supply chain and to the shift in consumers' preferences toward purchasing food in grocery stores (rather than in restaurants). While in the United Kingdom the production of oilseed is gradually decreasing over the years because of an EU insecticide ban that allowed the cabbage stem flea beetle to thrive again in the UK, Australian cattle exports to Vietnam and China are increasing after a drop in livestock exports to Indonesia.

Food prices have increased in US grocery stores over the last 12 months

Over the last 12 months, food prices at grocery stores have increased by 5.6%, which is the largest annual increase in nearly ten years, and this is mainly due to the fact that since the coronavirus outbreak started (and people purchased more food from grocery stores and less from restaurants), the demand for such commodities increased and the pandemic caused widespread disruptions to the food supply chain. The severity varies widely, with beef prices 25% higher and fruits and vegetables just 2.3% higher.

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UK's production of oilseed reaches its lowest level in 15 years due to EU insecticide ban

The UK's production of oilseed (which is a key ingredient in mayonnaise and margarine, and is used for cooking) has decreased after the issuance of an EU insecticide ban, and recently got to its lowest level in 15 years, leaving the UK increasingly dependant from the production of other countries, such as Ukraine, where pesticides are still allowed. The ban enabled a resurgence of the cabbage stem flea beetle, which devastates oilseed rape crops in the UK: government figures issued this month show that the total production amounted to 1.75 million tons last year, while it was 2 million tons a year earlier and 2.8 tons in 2011.

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Australia's livestock exports recover after drop during pandemic

Livestock exports to Australia's main market, Indonesia, have decreased because of the coronavirus pandemic, but the demand from other countries (such as Vietnam and China, where the African swine fever determined an increase in pork prices and therefore a rising demand for pork imports) filled that gap and overall volumes are returning to the original levels: in June, livestock exports from Australia totalled 124,000, the largest volume of cattle shipped since November.

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COUNTRIES' RESPONSE

While India will ease its domestic agriculture trade through the implementation of specific reforms that aim at supporting private investment in the development of new supply chain infrastructures (e.g. cold storages, warehouses) and at removing restrictions to trade in agricultural produce within the country, Ethiopia and Brazil are gradually strengthening their trade links and cooperation in different areas. More specifically, since coffee production in Ethiopia constitutes a longstanding tradition and Brazil is the world's largest coffee producer, the latter will share technical expertise and use its productivity-enhancing technologies to improve the production in Ethiopia.

Governor of the Reserve Bank of India mentions three new domestic agriculture trade reforms

During a recent speech, the governor of the Reserve Bank of India has mentioned three major reforms that are underway in India to facilitate domestic free trade in agriculture. The first one is the amendment of the Essential Commodities Act, which will support private investment in supply chain infrastructure development, while the second is the Farmers' Produce Trade and Commerce Ordinance, which is aimed at facilitating a barrier-free trade in agriculture produce. Finally, the third reform is the Farmers Agreement on Price Assurance and Farm Services Ordinance, which will empower farmers to easily engage with supply chain actors (processors, large retailers, exporters).

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New blockchain technology allows retailers and consumers to trace rice back to its source in Cambodia

Agriculture employs 80% of the total population in Cambodia and comprises around one third of the country's GDP. Since rice production leads the sector, some of the country's exporters undertook to ensure that producers are paid fairly and that the origins of the products can be traced back to their original source. One of those exporters has already implemented a blockchain technology that allows it to ensure that 500 household farmers in Cambodia sell their products at a higher price, and to allow the country's main food sources to be identified easily.

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Ethiopia and Brazil enhance cooperation to boost productivity and improve forestry management

Brazil and Ethiopia have engaged in a number of cooperation initiatives and agreements to boost their commercial relations and the investment flow. The areas of cooperation between the countries include forestry management, coffee production and cattle management. More in particular, Ethiopia and Brazil will implement technical cooperation projects in areas of sustainable forest management and acid soil management, and they will also work together to boost poultry and coffee production in Ethiopia, thanks to Brazil's productivity-improving technologies.

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REGIONAL FOCUS

A strengthening of the international trade rules and the creation of an international coffee agreement within the framework of the General Agreement on Tariffs and Trade would help those countries whose exports have been hampered by China's tendency to use its economic power to achieve its geopolitical goals (in a word, its economic coercion, which is a form of geo-economics), such as Australia and the Philippines, and it would also reduce the exploitation of millions of smallholder coffee farmers in Africa. More in particular, the creation of such agreement on coffee would allow for the establishment of export quotas and would enable price steering, making farmers able to live from the results of their hard work.

ASIA - China takes advantage of its economic power to achieve its geopolitical goals

Recently, China has been using its economic power to achieve its geopolitical goals: examples of economic coercion by China include a restriction of rare earth metal exports to Japan after a Chinese fishing boat and a Japanese coast guard collided near the Senkaku Islands, or the restriction of banana imports from the Philippines after a standoff between the countries' respective naval forces in the South China Sea (not to mention the increased tariffs on Australia barley due to its strong advocacy for an investigation into the origins of the coronavirus outbreak). This issue calls for a strengthening of the international trade rules, including those of the WTO, and for a reduction of the economic dependence on China.

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AFRICA - African coffee farmers suffer from exploitation that could be curbed by the establishment of an international coffee agreement

Due to unfair trade terms and to low coffee prices (often below production costs), millions of family coffee farmers in Africa are not able to lift themselves out of poverty. More in particular, the farmers' share in the coffee value chain ranges between 8.7% and 12.6% in Africa, with losses that amount to USD 714 million in Ethiopia and USD 229 million in Uganda. To tackle such issue, the CEO of a Kenyan social enterprise that markets produce from Africa's smallholder farmers proposed the creation of an international coffee agreement within the framework of the General Agreement on Tariffs and Trade.

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Contacts: FAO Datalab (ESS-datalab@fao.org)