An impact scan based on reports by farmers’ organisations from Asia
The current outbreak of the COVID-19 virus in developing countries is very likely to disrupt food production and supply at the global level. Although the outbreak in many of these countries is at its early stages, interruptions in commerce as well as in local production, storage, processing and distribution are already observed in many countries. Equally problematic are observed shortfalls in supply of agricultural inputs and resulting incapacity of farmers to prepare their fields for the next season. This is very likely to greatly affect food security and safety in the immediate future in all OECD countries.
Mid-March 2020, AgriCord Alliance has taken the initiative to consult farmer leaders and organisations throughout developing countries to inventory current impacts of the pandemic and proposed solutions per continent. Although these testimonies are very contextual (depending on the value chain, the country, the natural resources available), they give a good indication of the current state of affairs.
The following sections give an overview of the reports received between mid-March and early April.
Food security in Asia, especially South-east Asia, is to a large extent dependent on rice availability. Global forecasts show that rice supplies should meet global demand, but there are worries that export bans and panic buying could disrupt supply chains and cause shortages in some countries. Meantime, rice exporting countries in Asia have announced suspension or limitation of their rice exports. Vietnam, for example, the world’s third-largest exporter, has temporarily suspended new export sales to protect domestic supplies amid drought in the Mekong Delta. The largest buyers of Vietnam's rice include the Philippines, China and countries in Africa. Likewise, Cambodia will ban a share of its rice exports to ensure local food security during the COVID-19 crisis, the latest country to curb food exports because of the pandemic. Top global rice exporter India is amidst a three-week lockdown. The Myanmar government has also announced it will cut exports to avoid domestic shortages.
According to reports from farmers' organisations in these countries, many consumers resolve to panic-buying dry supply food staples such as rice, noodles, canned food products, which leads to unseen increases in food prices, despite assurances from governments on food stocks. The restrictions affecting movement of (seasonal) workers disrupt production and supply chains and is already beginning to affect stability of food supply. In quarantined areas and regions, relief food packs have been rationed by both government and private sector to assist vulnerable families.
Farmers' organisations in Vietnam have signalled threats of food shortages for smallholder farmers because of decreasing incomes and increasing financial debts. There is also specific concern for women farmers that are more involved in commercial activities (social proximity in markets) than men and are therefore more exposed to COVID-19 infection.
The Cooperative Alliance (VCA, TTHCA, QNCA and PYCA/forestry) in Vietnam reports major disruptions in their economic activities. An important share of grains and vegetables are not harvested whereas another proportion of their produce doesn’t reach markets due to the lockdown. Consequently, market prices of vegetables and grains have risen significantly. The Phuc Thanh Farmers’ Cooperative (PTFC) that produces and sells honey, are stockpiling their produce.
In Nepal, the ASEC – forestry in Dang/Tulsipur and Sundardeep are producing mushroom and local chicken and had their markets completely suspended. Similarly, in the Philippines, sales of dried fish produced by the ISLACO cooperative have plummeted because local fishermen prefer to sell the fish directly in response to an increasing demand in and around their villages. Among the short-term observed effects of the outbreak, there are reports of shortage of fertilizers and feed ingredients imported from India. Inadequate supply of these inputs is affecting production of food grains and fish.
GlowCorp, also in the Philippines, mention that their sales have actually increased due to panic buying of the population. According to their stock-taking, their inventories will be depleted in one or two weeks. Their production has been interrupted because of the suspension of transport services from Manila to the Visayas and Mindanao. Glowcorp anticipates that they may temporarily have to close operations until the lockdown is over. This will impact their sales and revenues.
Komunitas Swabina Pedesaan Salassae (KSPS) in Indonesia has been affected severely by closed down market opportunities in Makassar and outside Bulukumba. Rice harvest season has started in Sulawesi, but the post-harvest transportation and subsequent storage are highly uncertain.
The Indonesian Ngudi Makmur Cooperative (NMC) is not able to access its wholesale buyers due to the limitations of people’s movements. The cooperative mandated salesmen to find new markets despite the local government’s advice to limit travel outside of their communities. The salesmen’s strategy is to find small enterprises with limited but stable purchase capacity. This would also help ensure availability of rice, vegetables, cassava and mocaf in NMC’s neighboring sub-districts and villages, as panic buying has become a norm in Java.
The Agriculture and Farmers Federation of Myanmar (AFFM) is in the middle of the harvest season of beans, potato and coffee (rice was due in November – December). While harvest of products has begun, there is no product outlet, as local marketing activity slowed down to an absolute minimum.
In the Philippines, female entrepreneurs are unable to sell large shares of their produce as local traders interrupted their operations due to the enhanced community quarantine (ECQ). There is a sharp decrease of income for women engaged in food vending. Women engaged in poultry and livestock raising are expected to experience losses due to limited buyers and drop in consumer demand. Women engaged in rice farming have benefited from the increase in farmgate prices of palay, but a shortage of rice supply is looming.
Major disruptions of value chains are not only observed at the market stage. Many farmers' organisations in Asia report important barriers and suspension of production, processing, extension services and storage. According to estimations of the Vietnam-based VCA, TTHCA, QNCA and PYCA cooperatives, 80% of the road, waterway, rail, and air transport activities are suspended. farmers' organisations in the Philippines have also reported major logistical problems, even at the local scale, as local transportation is not available during quarantine. Likewise, in Indonesia, the Ngudi Makmur Cooperative (NMC) has reported normal on-farm rice production but anticipates poor transportation options towards the end of the harvest season (May). Marketing of food in Indonesia is even more difficult as the state-owned railway operator PT Kereta Api Indonesia (KAI) has canceled long-distance train routes to destinations in Yogyakarta, Central Java and East Java. Similar reports came in from the Kelompok Petani Alami (KPA) association in Indonesia.
According to the Lao Cao Farmers Union (LCFU), also in Vietnam, provision of agriculture extension services has fallen sharply as government installed blockades along the routes going to and coming in from China and along the roads going to Sapa, Bat Xat and Bac Ha.
In Laos, the Farmers for Sustainable Agricultural Production (FASAP) record a 40% decrease in production. The price of tomato last year was 8 to 10 dollars per 12 kg whereas by the end of March, with the covid-19 crisis, price per 12 kg was 1.5 dollars.
Effects on Farmers’ Income and Finance
Disrupted value chains and reduced marketing opportunities have direct impact on farmers’ income. These impacts on household income are reported by almost all farmers' organisations within the AgriCord Alliance network. Especially women are hard hit by the fall in revenue. In Vietnam (An Giang Farmers Union (AGFU)), in the People’s Republic of Laos (Lao Cao Farmers Union) and in the Philippines, farmers’ organisations report decreasing income, increasing production costs, transport costs and accumulating interest on microloans. In regions with high poverty rates, this has led to an increment of child malnutrition. To make things worse, most farmers' organisations believe that household finances of farmers and rural people will further deteriorate once financial buffers are absorbed. This tipping-point is expected to be reached within maximum three weeks.
Farmers' organisations income and finance
As farmers' organisations are soaking up financial burdens of their members, their financial resources may become heavily depleted. Some farmers' organisations in the Philippines are already unable to pay wages (extension officers, administrative personnel, etc.), especially those farmers' organisations that are paying off long-running loans, used to build processing and storage facilities. Lack of supply of primary agricultural products, the cost of inputs and the limited marketing outlets menace their financial backbone.
The situation of farmers' organisations providing financial services is different but equally alarming. ISLACO in Eastern Samar, for example, is granting postponement of payment to ease its members’ financial burden but developed as a result a much larger portfolio of microloans at risk. The number of new loans and savings have virtually dropped to zero. They are now requesting suspension of payments to their lenders, e.g. FSSI.
Finally, farmers' organisations are also pointing out that rural people have less access to evidence-based and scientific information on the coronavirus and countermeasures, leaving them more exposed to rumors, local beliefs and superstition. Moreover, masks, disinfectants and other protective materials are almost absent, compared to urban areas.