Posted on July, 06 2020

The global food system proved itself surprisingly adaptable in responding to the initial phase of the COVID-19 pandemic – but disruptions to supply chains and lost income are now set to push an additional 150 million people worldwide into food poverty and imperil the achievement of the UN Sustainable Development Goals (SDGs), according to a panel of food policy experts speaking on a webinar organised by WWF, the OECD and the Environmental Defense Fund.

“My first reaction was that this is going to cause a food crisis,” said Agnes Kalibata, the UN Secretary General’s Special Envoy for the 2021 Food Systems Summit and President of the Alliance for a Green Revolution in Africa (AGRA), in response to the combinations of lockdowns and supply chain disruption triggered by the pandemic.

However, action by governments to designate agriculture as an essential industry, combined with entrepreneurial responses among food producers and distributors – often supported by digital technology – helped ensure that agricultural supply chains kept operating, albeit with localised price rises.

“I don’t want to discount the disruptions, but firms adapted and changed the way they were operating,” agreed Lee Ann Jackson, Head of the Agro-food Trade and Markets Division in the Trade and Agriculture Directorate at the OECD. She added that “co-ordination mechanisms” put in place after the food price crisis in 2007-08 helped policymakers respond and avoid export restrictions that could have exacerbated supply chain stresses.

However, the food system before the pandemic was not meeting the world’s needs, argued Francesco Branca, Director of the Department of Nutrition for Health and Development at the World Health Organization (WHO). “COVID-19 exposed the fragility of our current food systems,” which result in one in three people around the world suffering from some form of malnutrition.

He added that, as well as increasing food poverty, the economic effects of the pandemic will mean that an additional 7 million children around the world will suffer from wasting, in addition to the 47 million already defined as dangerously thin for their height.

“Societies have been tone-deaf to the warning signs, and the problems around [our food systems and its impacts on human and environmental health] are not new,” said João Campari, Global Food Practice Leader at WWF International. “The COVID-19 pandemic has merely highlighted the fragility of the system.”

However, Branca added that the pandemic has “opened a window of opportunity” to address this fragility. For example, he called for revisions to agricultural subsidies to incentivise the production of sustainable, safe, healthy and nutritious food. He also called for policies to strengthen the regionalisation and localisation of food systems and supply chains.

Branca also called for the business community to better measure the “true cost of food”, taking into account externalities – the environmental and social costs incurred by food production and distribution that are not borne by producers or consumers.

From the point of view of finance and investment, Suzanne Gaboury, Chief Investment Officer at FinDev Canada, a development finance institution, observed a need for innovation and new thinking about investment opportunities in localised food supply chains.

“I’m hoping that the next phase of building resilience beyond COVID will create new partnerships and investment opportunities,” she said. As examples, she gave the need for investment in more sustainable inputs such as fertilizers, and new, climate-resilient crop varieties, as well as in digitalisation to help connect buyers and sellers.

“There is an increasing theme around digitalisation and the role of technology,” said Diane Holdorf, Managing Director of Food and Nature at the World Business Council for Sustainable Development (WBCSD), noting that, when lockdowns were introduced and existing supply chains were disrupted, “all of a sudden ecommerce started to pop up, connecting farmers to consumers who are locked in their homes … creating these direct digital interactions. These opportunities started to proliferate without a guided effort.”

She said that lessons learning from that process of digitalisation could be applied to “everything from transparency and traceability to market engagement and consumer direct engagement” around more healthy and sustainable food systems.

Providing the bottom of the food supply chain with the capital it will need will be challenging, Gaboury added, as it is considered by financiers and insurers as relatively high risk, necessitating public-private partnerships to reduce risks that the private sector is not prepared to bear alone.

However, she added that: “I have seen a level of engagement within the international finance community and the business community that I hadn't seen before … That is very encouraging. If you can quantify the risk, then you can actually provide financial solutions.”

“Coming up with the policies and the policy environment that allows these investments will require bold action,” said Kalibata. “There’s a need to change the discourse around our food systems, and we will need funding if we’re to get back on track with the SDGs, both from the private sector and the public sector.”