One year since the World Health Organization declared a global pandemic, the impact of COVID-19 and its associated control and mitigation measures on the global, regional, and local food systems and food security and nutrition in LMICs cannot be denied. Since then, global Gross Domestic Product (GDP) has contracted by 5.2% [1] and informal economies have also taken a beating.
Small and Medium Enterprise (SMEs), in particular, have faced a myriad of challenges—and these have hit particularly hard for firms in the food system, which often have low margins to begin with. Stay at home orders, closure of markets, cessation of movements, and transport restrictions have led to challenges such as reduced sales and revenues [2], difficulty paying staff, and difficulty bringing products to market. At the same time, reduction in income for many households has reduced their purchasing power. Firms are thus being hit from both the supply and demand side.
While the impact of the pandemic on the food system has lessened over time, there is continued disruption to trade, as revealed in the latest global and country situation reports from GAIN’s Keeping Food Markets Working programme. The situation report, which is current as of late March 2021, synthesises insights on the ongoing impacts of COVID-19 on food systems. It covers ten GAIN countries and focuses on SMEs within the food system and how food value chains—particularly those for highly nutritious foods—are changing [3]. The key messages from the report include:
- Prices across 14 studied food products in all 10 GAIN countries have increased by an average of 8.8% between February 2020 and February 2021. This is below the global average price increase of 10.3% but still significant.
- In East Africa, however, prices declined in December across many markets with the onset and progression of the October-to-January harvests. At the same time, COVID-19 related border controls continued to delay cross-border trade.
- Reduction in income for many households has likely led to a reduction in food intake, especially of nutrient-rich foods, as households cut their food spending.
- Movement restrictions and other control measures are affecting the ability of migrant worker populations to pursue work, depriving their families of income as well as leading to shortages of agricultural labour in destination areas.
- Food system SMEs continue to be affected by the effects of COVID-19 especially reduced consumer spending, labour shortages and COVID-19 control measures, but the strong disruptions seen during the first wave of lockdowns in the spring of 2020 have subsided in most countries.
- Hope is growing with an end to the pandemic on the horizon: Rwanda, Kenya, and Nigeria have received their first deliveries of COVID-19 vaccines from the global COVAX initiative, which aims to secure vaccine for low-and middle-income countries.
While full recovery is still far and away, there is a growing adaptation among businesses as a result of rapid response and strategic recovery interventions. The arrival of vaccines gives hope though vaccination rates across LMICs lag those in higher-income countries.
Read the full report here: Impact of COVID-19 on food systems: A situation report
About the Keeping Food Markets Working (KFMW) programme
KFMW is GAIN’s COVID-19 emergency response program, which is providing targeted support to help sustain core food systems, workers, and markets during the COVID-19 emergency. The program has the overarching goal of mitigating the risk of economic collapse of food systems in order to sustain the availability and affordability of nutritious and safe foods and contribute to lowering the burden of ill-health, particularly for the most vulnerable. One of the KFMW intervention is building the resilience of nutritious food SMEs. Thus far, the intervention has provided emergency financial support to over 100 SMEs across six countries to support them to weather the pandemic. KFMW is funded by the Netherlands Ministry of Foreign Affairs, the Department of Foreign Affairs, Trade and Development of Canada, and the Rockefeller Foundation. The views expressed herein are the responsibility of GAIN and do not necessarily reflect the views of the supporting organisations.
References
[1] World Bank. 2021. Global Economic Prospects, January 2021. Washington, DC: World Bank. doi: 10.1596/978-1-4648-1612-3. License: Creative Commons Attribution CC BY 3.0 IGO.
[2] GAIN. 2020. Impacts of COVID-19 on Small- and Medium-Sized Enterprises in the Food System: Results of an Online Survey. Geneva: Global Alliance for Improved Nutrition (GAIN).
[3] GAIN. 2021. Impact of COVID-19 on Food Systems: A Situation Report, Edition 5. 04 March 2021.