The impact of coronavirus on UK food supply chain
GODAN, Global Open Data for Agriculture and Nutrition, a UN and UK & US Government supported initiative funded by the UK’s Department for International Development (DFID), has released comments from its executive director, Andre Laperriere, about the impact of coronavirus on the UK food supply chain.
Laperriere has emphasised that UK food shortage “would be a serious crisis under a coronavirus lockdown and it is imperative that plans are in place to ensure the supply chain remains open, functional and optimised.” Laperriere commented that empty shelves in supermarkets is a logistics problem rather than a supply problem and that it is consumer hoarding that would artificially increase food prices, because of the pressure it may put on the supply chain.
Laperriere explained the impact a nationwide lockdown on agricultural output has had on China; farmers are dealing with shortages in labour, seeds and fertilisers. “A survey of village officials in 1,636 counties by the Qufu Normal University in China found that 60% of the respondents were pessimistic or very pessimistic about the planting season.”
GODAN’s executive director stated that, in contrast to China, the UK’s agriculture industry is highly mechanised, producing 50% of the food it needs with only 2% of the workforce. “That being said, the UK farming sector is deeply integrated with the global supply chain, and any macro changes in global markets such as through higher prices for arable farmers, price volatility or impact in reliability can have immediate effect.
“In immediate terms, the sector is inter-dependent on strong finance for borrowing, energy companies, water supply, packaging materials, transport and human health. All these are critical components are key to keeping the cogs running. Any disruptions, however partial, would be disruptive.”
Laperriere believes it is “imperative that farms and the food sector receive short-term exemptions from lockdown regulations, and workers are provided with safe work and self-protective equipment to enable them do the urgent and necessary work required to keep the food supply chain robust. The food sector comes under the critical infrastructure sector along with healthcare and emergency services.”
The UK, Laperriere commented, currently has a competitive advantage over the EU in that its agriculture sector has larger farms than typical for much of the EU. The UK is less advantaged in the supply of technologies and equipment, whether in farm irrigation (French and Italian companies area ahead in this area) or in the food manufacturing sector (Germany leads here). Laperriere said that, “considering the UK is still in the EU, farmers depend on the EU subsidies, therefore the relationship between the pound and euro also has a critical bearing on UK farming. Subsidies received by the UK farmers are set in euros, and then converted to sterling in September each year. The economic impact of the Eurozone in the near future along with Britain’s relationship with the bloc, will have a strong bearing on the UK. There are some serious challenges ahead that governments need to recognise and act on as priority.”
Laperriere concluded by highlighting that maintaining the trade and export activity during times of crisis like this is also vital. “Farmers depend on exports, as much as the UK depends on food imports. China is a big market for UK produce and in turn the UK is dependent on China for a lot of supply chain equipment from fertilisers to packaging materials. The UK also imports 30% of its food needs from the EU, including for fresh fruit and veg, meat, cereals and diary.
“Closing borders within the EU would result in some supply disruption for sure. Open data would be really indispensable, as it provides for both transparency and for enlightened, efficient, data driven decision making processes.”