A Crisis within a crisis
A Crisis within a Crisis
“The unfolding COVID-19 pandemic is so far having little impact on the global food supply chain, but that could change for the worse and soon if anxiety-driven panic by major food importers takes hold”
Stated above is the statement which was published by world food programme (WFP) in their web page on Friday (3rd). It has somewhat profound meaning that we never even feel yet. We are in front of a tremendous global economic and financial crisis other than Covid -19 itself. Due to the prevailing situation, the future ahead of us is very uncertain. But one thing is definite that is the world will not be the same as it was. I’m pretty sure that covid-19 crisis will fade away gradually. But at the time, the world will be in a doorstep of bunch of problems. Economic, Geopolitics and Health issues are major consequences of Covid-19. Out of above issues global food crisis will be the most critical problem that we need to tackle in near future. The world food programme has announced COVID-19 and the 5 major threats it poses to global food security recently.
• COVID-19 poses a great threat to nations suffering from pervasive poverty and poor healthcare infrastructure.
• COVID-19 poses a great threat to nations lacking robust social safety nets.
• COVID-19 may prove especially deadly for people suffering from chronic or acute hunger or malnourishment.
• COVID-19 may cause breaks in food supply chains, food shortages and food price spikes.
• COVID-19 may cause the global economy to slow or fall into recession, exacerbating extreme poverty and hunger.
So I think now you can understand how serious the issue is. Food is the driving force of mankind. Otherwise it is a psychological need/basic need (Maslow’s order of hierarchy) as stated by Maslow which is an essential commodity for the survival of mankind. Without food people can survive maximum up to seven days. Due to the current pandemic many governments around the world have imposed lockdowns to avoid the spread of the Corona virus. This has resulted in severe slow-downs in international trade and food supply chains. However, it is said that given the highly globalized nature of food production and supply, commodities need to move from the world’s ‘breadbaskets’ to where they are consumed. During the time Sri Lanka possessed closed economy system there were no international trade. But we were self-sufficient from essential food commodities during that era. It’s also important to note that human requirements at that time were also not sophisticated like today. With the globalization the technology has developed rapidly. Those developments have facilitated the international trade which in the other hand contributed to the diversification of the global food supply chains. As our society moved to the open economy, needs of the common man increased tremendously but in the other hand they gave up becoming self-sufficient. They move out from subsistence agriculture and start looking for food from international markets rather than meeting those needs locally. There is a common saying within country folks,
“when ships carry food have not arrived on time, grub Singhalese will die from hunger for sure”
As mentioned above commodities need to move from the world’s ‘breadbaskets’ to where they are consumed through supply chain. The food supply chain is a complex web that involves producers, agricultural inputs, transportation, processing plants, shipping etc. Commodities that are operating through global supply chains need to pass the borders. Due to current pandemic most of the countries put their borders on lockdown and therefore logistic services are ceased. Sometimes within one food product involve several countries for several steps like harvesting, processing, packaging and marketing. Closing borders has exposed just how much certain countries are dependent upon foreign workers to bring in crops. Up to now there were no any reported cases related to food scarcity even Wuhan, China where the pandemic begun.
“global cereal stocks are at comfortable levels and the outlook for wheat and other staple crops is positive for the rest of this year”,
Said Dongyu, head of the United Nations' (UN) Food and Agriculture Organization (FAO). He further stated that they may soon expect to see disruptions in food supply chain. If big importers lose confidence in the reliable flow of basic food commodities, panic buying could ensure, driving prices up resulting in inflation. Inflation is another serious issue that will affect developing countries. As at the time of writing this article (12th of April 2020) one-dollar is equivalent to LKR 193.00 and it will hit LKR 200.00 soon. For an example, the item which we purchase for 1 dollar (when the rate was SLR.172) before pandemic begun, we have to pay extra 21 LKR under current dollar rate. It will affect developing countries badly due to lower per capita income. (GNI per capita) Meanwhile panic buying by people going into isolation has already demonstrated the fragility of supply chains as supermarket shelves emptied in many countries. Consumers with high purchasing power purchases more while consumers with low purchasing power purchase smaller quantity. Panic buying leads people from developing world in to hunger. Now it is happening under Sri Lankan context as well. It paved scarcity of particular products within the market. For example, before fortnight government declared some price reduction of canned fish and Dhal. Now even co-operative stores cannot find single tin of canned fish. The reason was panic buying.
Sri Lanka is an Island from its geographic nature. It paves some kind of isolation from the world despite being coastal country. The supply chain in Sri Lanka is running fairly due to the extraordinary geographic position of the country as it’s a center for many of shipping routes. But due to the current circumstances access to all sea ports and air ports within world have temporary closed. So it is an obstacle to proper functioning of the global food supply chain.
India is a major importer to Sri Lanka. We rely on India for variety of agricultural products and food including Spices, wheat, lentils, sugar, fruit, milk, and milk products. Indian priminister Narendra Modhi called for the twenty-one-day mandatory curfew (Janata curfew) all around India two weeks ago and today (11th) it has extended for another 2 weeks. With that all trade within India was temporary ceased. It means the supply chain was interrupted due to imposed curfew by making dilemmas within countries where Indian exports are circulating. The value of imports from India to Sri Lanka was USD million 3824 in 2018. Lentil is a common staple in Sri Lanka. Sri Lanka export 100% lentil requirement from India. So now there is a visible scarcity of lentils within country. I think it is a best example to depict how we rely on food commodities from globe. There is no sufficient dry chili production in Sri Lanka. More than 95% of required dry chili are imported from India. Still we are self-sufficient only in Rice, Coconut, Tea and poultry. With the current Covid-19 issue we can no longer depend on foods from international market due to several reasons. Some of reasons are already mention above. It’s obvious we will have to face economic depression by the end of Covid-19 chapter. By the time most of the countries will face huge financial issues due to extreme spending on public health services. The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, that began in the United State. The timing of the Great Depression varied across the world; in most countries, it started in 1929 and lasted until the late 1930s. But this time economist predicts that more time will be required to recover from the prevailing economic crisis than previous time even for a partial recovery from such economic crisis. With that dollar rate will go up for sure. It will reduce the purchasing power of the third world buyers tremendously. Panic buying is another reason which affects countries like Sri Lanka. If this condition extended more, the supply chain will cease due to barriers to entry. Most of the people working in industrial sector will lose their jobs as more companies are announcing layoffs and redundancies. Most businesses view reducing the payroll expense as the most suitable way of reducing operating expenses during crisis times. In that case people lose their income. The developing world no longer trade food commodities through international trade. They store it for their citizens for sure. So it’s mindful to produce our essentials locally other than rely on international trade. But in that case some people will argue that we cannot produce sufficient amount in each and every commodity. It’s true. We cannot produce everything. But we can produce at least essential things. Consuming patterns are different with each and every customer. It determines their wealth, knowledge, attitudes, outside environment and so on. There are two types of requirements basically,
• Lower needs/primary needs
• Higher needs/ secondary needs
Here we are talking about ensuring food safety which is basically a primary need. Food safety can be defined as the state of having reliable access to a sufficient quantity of affordable, nutritious food. It should be affordable as a primary requirement. So it’s obvious that we can produce adequate amount of food within the Country. Producing primary needs within the country will facilitate reaching for secondary needs. Due to being self-sufficient in essential needs, money supply within the country will go up. It will enhances purchasing power of individuals. As well as it will reduce net imports within country. It will save billions. It expands disposable income of Sri Lankan community. So it will facilitate the access to secondary needs. If money is available, we can catch international market for some extent even in the pandemic situation. If the country is willing to pay more for particular product, producers will be willing to continue the supply. By following the above mention strategy, we can ensure food security.
“Collaborative and concerted efforts are required between the food industry and governments to keep supply chains open and minimize disruption of food manufacturing and distribution to ensure the food security of ASEAN communities”, says PricewaterhouseCoopers (PWC), multinational professional services networks. They also suggest localized food production through collaborative effort to ensure food security rather than depending on international food supply chain.
The heads of three global agencies related to food, warned a potential worldwide food shortage if authorities fail to manage the ongoing coronavirus crisis properly. so hence acting to protect the health and well-being of their citizens, countries should ensure that any trade-related measures do not disrupt the food supply chain. So We need to locally produce our food requirement to no longer depend on the world market. Sri Lankan government recently implemented “saubhagya” home garden project, the distribution of seeds and plants throughout the island for sum twenty rupees. Through that, government intended to ensure food security within the country to face upcoming economic crisis which will strongly begin as an aftermath of covid-19. But most of the people has complained that they never even receive one pack of seeds. So the authorities should keep eyes on whether the seeds are distributed in a correct manner equally. Home gardening is the only way to face upcoming food scarcity. Through that we can produce our food requirement locally. Due to current pandemic most of the developed countries will lose their production. Most of the industries already cut out their employees. So the production will be definitely losing. Then they restrict supply chain within their country. So no longer needed to wait until ships arrive.
Sri Lanka has a trade deficit with the rest of the world, mostly because the country exports labor, tourism, and also debt (foreign borrowings), with that the debt will be rise up to roof. So there will be no sufficient money retain in the country to purchase food commodity. So it is mindful to produce our own foods. Sri Lanka is a country which has extraordinary potential for agriculture. Adequate water supply from two major monsoonal and inter monsoonal rains, Arable lands, topography facilitate local food production. Still staple food commodities such as wheat is available in the world to feed all nations. But in near future it will be finished. Cereal crops are short term crops which has life span of two to three years. So if we start to grow today it will probably rescue us from hunger and malnutrition in near future while ensuring the food security. If surplus production is available, we can earn foreign revenue by exporting. if it happens we can ensure to confidently face economic crisis while ensuring the food security.
Ovin Amaratunga Faculty of Agriculture
“The unfolding COVID-19 pandemic is so far having little impact on the global food supply chain, but that could change for the worse and soon if anxiety-driven panic by major food importers takes hold”
Stated above is the statement which was published by world food programme (WFP) in their web page on Friday (3rd). It has somewhat profound meaning that we never even feel yet. We are in front of a tremendous global economic and financial crisis other than Covid -19 itself. Due to the prevailing situation, the future ahead of us is very uncertain. But one thing is definite that is the world will not be the same as it was. I’m pretty sure that covid-19 crisis will fade away gradually. But at the time, the world will be in a doorstep of bunch of problems. Economic, Geopolitics and Health issues are major consequences of Covid-19. Out of above issues global food crisis will be the most critical problem that we need to tackle in near future. The world food programme has announced COVID-19 and the 5 major threats it poses to global food security recently.
• COVID-19 poses a great threat to nations suffering from pervasive poverty and poor healthcare infrastructure.
• COVID-19 poses a great threat to nations lacking robust social safety nets.
• COVID-19 may prove especially deadly for people suffering from chronic or acute hunger or malnourishment.
• COVID-19 may cause breaks in food supply chains, food shortages and food price spikes.
• COVID-19 may cause the global economy to slow or fall into recession, exacerbating extreme poverty and hunger.
So I think now you can understand how serious the issue is. Food is the driving force of mankind. Otherwise it is a psychological need/basic need (Maslow’s order of hierarchy) as stated by Maslow which is an essential commodity for the survival of mankind. Without food people can survive maximum up to seven days. Due to the current pandemic many governments around the world have imposed lockdowns to avoid the spread of the Corona virus. This has resulted in severe slow-downs in international trade and food supply chains. However, it is said that given the highly globalized nature of food production and supply, commodities need to move from the world’s ‘breadbaskets’ to where they are consumed. During the time Sri Lanka possessed closed economy system there were no international trade. But we were self-sufficient from essential food commodities during that era. It’s also important to note that human requirements at that time were also not sophisticated like today. With the globalization the technology has developed rapidly. Those developments have facilitated the international trade which in the other hand contributed to the diversification of the global food supply chains. As our society moved to the open economy, needs of the common man increased tremendously but in the other hand they gave up becoming self-sufficient. They move out from subsistence agriculture and start looking for food from international markets rather than meeting those needs locally. There is a common saying within country folks,
“when ships carry food have not arrived on time, grub Singhalese will die from hunger for sure”
As mentioned above commodities need to move from the world’s ‘breadbaskets’ to where they are consumed through supply chain. The food supply chain is a complex web that involves producers, agricultural inputs, transportation, processing plants, shipping etc. Commodities that are operating through global supply chains need to pass the borders. Due to current pandemic most of the countries put their borders on lockdown and therefore logistic services are ceased. Sometimes within one food product involve several countries for several steps like harvesting, processing, packaging and marketing. Closing borders has exposed just how much certain countries are dependent upon foreign workers to bring in crops. Up to now there were no any reported cases related to food scarcity even Wuhan, China where the pandemic begun.
“global cereal stocks are at comfortable levels and the outlook for wheat and other staple crops is positive for the rest of this year”,
Said Dongyu, head of the United Nations' (UN) Food and Agriculture Organization (FAO). He further stated that they may soon expect to see disruptions in food supply chain. If big importers lose confidence in the reliable flow of basic food commodities, panic buying could ensure, driving prices up resulting in inflation. Inflation is another serious issue that will affect developing countries. As at the time of writing this article (12th of April 2020) one-dollar is equivalent to LKR 193.00 and it will hit LKR 200.00 soon. For an example, the item which we purchase for 1 dollar (when the rate was SLR.172) before pandemic begun, we have to pay extra 21 LKR under current dollar rate. It will affect developing countries badly due to lower per capita income. (GNI per capita) Meanwhile panic buying by people going into isolation has already demonstrated the fragility of supply chains as supermarket shelves emptied in many countries. Consumers with high purchasing power purchases more while consumers with low purchasing power purchase smaller quantity. Panic buying leads people from developing world in to hunger. Now it is happening under Sri Lankan context as well. It paved scarcity of particular products within the market. For example, before fortnight government declared some price reduction of canned fish and Dhal. Now even co-operative stores cannot find single tin of canned fish. The reason was panic buying.
Sri Lanka is an Island from its geographic nature. It paves some kind of isolation from the world despite being coastal country. The supply chain in Sri Lanka is running fairly due to the extraordinary geographic position of the country as it’s a center for many of shipping routes. But due to the current circumstances access to all sea ports and air ports within world have temporary closed. So it is an obstacle to proper functioning of the global food supply chain.
India is a major importer to Sri Lanka. We rely on India for variety of agricultural products and food including Spices, wheat, lentils, sugar, fruit, milk, and milk products. Indian priminister Narendra Modhi called for the twenty-one-day mandatory curfew (Janata curfew) all around India two weeks ago and today (11th) it has extended for another 2 weeks. With that all trade within India was temporary ceased. It means the supply chain was interrupted due to imposed curfew by making dilemmas within countries where Indian exports are circulating. The value of imports from India to Sri Lanka was USD million 3824 in 2018. Lentil is a common staple in Sri Lanka. Sri Lanka export 100% lentil requirement from India. So now there is a visible scarcity of lentils within country. I think it is a best example to depict how we rely on food commodities from globe. There is no sufficient dry chili production in Sri Lanka. More than 95% of required dry chili are imported from India. Still we are self-sufficient only in Rice, Coconut, Tea and poultry. With the current Covid-19 issue we can no longer depend on foods from international market due to several reasons. Some of reasons are already mention above. It’s obvious we will have to face economic depression by the end of Covid-19 chapter. By the time most of the countries will face huge financial issues due to extreme spending on public health services. The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, that began in the United State. The timing of the Great Depression varied across the world; in most countries, it started in 1929 and lasted until the late 1930s. But this time economist predicts that more time will be required to recover from the prevailing economic crisis than previous time even for a partial recovery from such economic crisis. With that dollar rate will go up for sure. It will reduce the purchasing power of the third world buyers tremendously. Panic buying is another reason which affects countries like Sri Lanka. If this condition extended more, the supply chain will cease due to barriers to entry. Most of the people working in industrial sector will lose their jobs as more companies are announcing layoffs and redundancies. Most businesses view reducing the payroll expense as the most suitable way of reducing operating expenses during crisis times. In that case people lose their income. The developing world no longer trade food commodities through international trade. They store it for their citizens for sure. So it’s mindful to produce our essentials locally other than rely on international trade. But in that case some people will argue that we cannot produce sufficient amount in each and every commodity. It’s true. We cannot produce everything. But we can produce at least essential things. Consuming patterns are different with each and every customer. It determines their wealth, knowledge, attitudes, outside environment and so on. There are two types of requirements basically,
• Lower needs/primary needs
• Higher needs/ secondary needs
Here we are talking about ensuring food safety which is basically a primary need. Food safety can be defined as the state of having reliable access to a sufficient quantity of affordable, nutritious food. It should be affordable as a primary requirement. So it’s obvious that we can produce adequate amount of food within the Country. Producing primary needs within the country will facilitate reaching for secondary needs. Due to being self-sufficient in essential needs, money supply within the country will go up. It will enhances purchasing power of individuals. As well as it will reduce net imports within country. It will save billions. It expands disposable income of Sri Lankan community. So it will facilitate the access to secondary needs. If money is available, we can catch international market for some extent even in the pandemic situation. If the country is willing to pay more for particular product, producers will be willing to continue the supply. By following the above mention strategy, we can ensure food security.
“Collaborative and concerted efforts are required between the food industry and governments to keep supply chains open and minimize disruption of food manufacturing and distribution to ensure the food security of ASEAN communities”, says PricewaterhouseCoopers (PWC), multinational professional services networks. They also suggest localized food production through collaborative effort to ensure food security rather than depending on international food supply chain.
The heads of three global agencies related to food, warned a potential worldwide food shortage if authorities fail to manage the ongoing coronavirus crisis properly. so hence acting to protect the health and well-being of their citizens, countries should ensure that any trade-related measures do not disrupt the food supply chain. So We need to locally produce our food requirement to no longer depend on the world market. Sri Lankan government recently implemented “saubhagya” home garden project, the distribution of seeds and plants throughout the island for sum twenty rupees. Through that, government intended to ensure food security within the country to face upcoming economic crisis which will strongly begin as an aftermath of covid-19. But most of the people has complained that they never even receive one pack of seeds. So the authorities should keep eyes on whether the seeds are distributed in a correct manner equally. Home gardening is the only way to face upcoming food scarcity. Through that we can produce our food requirement locally. Due to current pandemic most of the developed countries will lose their production. Most of the industries already cut out their employees. So the production will be definitely losing. Then they restrict supply chain within their country. So no longer needed to wait until ships arrive.
Sri Lanka has a trade deficit with the rest of the world, mostly because the country exports labor, tourism, and also debt (foreign borrowings), with that the debt will be rise up to roof. So there will be no sufficient money retain in the country to purchase food commodity. So it is mindful to produce our own foods. Sri Lanka is a country which has extraordinary potential for agriculture. Adequate water supply from two major monsoonal and inter monsoonal rains, Arable lands, topography facilitate local food production. Still staple food commodities such as wheat is available in the world to feed all nations. But in near future it will be finished. Cereal crops are short term crops which has life span of two to three years. So if we start to grow today it will probably rescue us from hunger and malnutrition in near future while ensuring the food security. If surplus production is available, we can earn foreign revenue by exporting. if it happens we can ensure to confidently face economic crisis while ensuring the food security.
Ovin Amaratunga Faculty of Agriculture
Timely topic.. Good read
ReplyDeleteThank you very much Madam!
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