An impact scan based on reports by farmers’ organisations from Latin America
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 systems, including security and safety are beginning to show important signs of disruptions and already have major impacts on rural and urban populations’ access to food.
Generally, local and national markets everywhere in Latin America are already greatly affected by quarantine and confinement measures, with markets, restaurants and touristic establishments closing doors. In the Andes, for example, farmers point out that almost all farmer markets in Ecuador, Colombia, Bolivia and Peru are closed because of public lock-down measures. In these countries, farmer markets are virtually the only marketing canal for smallholder farmers. Female farmers in Ecuador mention that sales and productivity are have currently dropped to almost zero.
International markets are also affected. In the Andes, UNOCACEO has been forced to suspend all production and commercialization since international export sale contracts (coffee, cacao, artisanal products) have been canceled. These cooperatives are now forced to find new buyers or to turn to internal markets, which in the long run may destabilize their financial foundations. Where possible, some coffee and cocoa cooperatives keep producing and storing produce in order to mitigate income loss of their members, but with a high risk of production loss and waste.
Similarly, coffee cooperatives in Honduras report that since the beginning of the outbreak, international coffee markets are affected by price speculation. They expect major problems in the coffee supply chain because of closed borders. They argument that delays in exportation will provoke delayed payments and increasing prices, locally and internationally.
Brazilian farmers have seen a steep decrease in the volume of government purchases of food from producer organizations for institutional programs, such as the School Feeding Program. Food is being wasted on brazilian farms due to falling demand from government and companies (eg, restaurants) and the lack of alternatives/direct marketing channels.
Disrupted supplies of inputs
It has been reported by a potato producing farmers' organisation in Ecuador (Agripapa) that farming inputs such as seeds and fertilizer have become very scarce because of reduced transportation and processing of such provisions. Farmers failing to sow and plant their cash crops, routinely fall short of cash and cannot assure the reimbursements of microcredit. Alternatively, as farming inputs become scarce, they become more expensive which affects farming profitability, and leads to debt accumulation. Where farmers' organisations provide these (input, financial, logistic) services, they are absorbing the shocks by means of their own financial cushion. However, some cooperatives, especially those providing financial services, are reporting signs of decapitalization.
Disrupted agrifood value chains
Beyond specific constraints to input supply, the COVID-19 pandemic directly affects value chains dynamics, of which the coffee value chain has already been mentioned. During the production phase, Nicaraguan coffee farmers point out that coffee recollection is disrupted because of quarantine measures imposed by governments or by the plantation owners themselves. Seasonal workers, often migrating for work and income, are no longer welcome in certain regions and countries, or refuse to travel themselves. Logistical problems in the coffee value chain are not only related to input supply: the transportation of harvested and dried coffee beans is becoming a headache for many farmers and cooperatives. A forthcoming recession in the coffee sector in Honduras is already apprehended by coffee cooperatives and will inevitably lead to cash problems at household level, and consequently in connected sectors.
Other local value chains are disrupted because of the incapacity of farmers' organisations to assure food safety: The honey-producing farmers' organisation Sundardeep lacks equipment and hygiene monitoring tools to guarantee quality and consumer safety.
In Brazil, social isolation hinders internal communication between members of farmers' organisations and external communication with potential suppliers/consumers. This is also affecting lobbying efforts with the government aiming at establishing measures to assist farmers. Face-to-face social mobilization, a characteristic of producer organizations and social movements, is impossible because of health and safety reasons.
Farmers' organisations’ precarious financial situation
Some farmers' organisations do not have the liquidity to maintain the purchase level of primary products, forcing a number of farmers to search for other buyers, driving them in the arms of brokers and intermediaries. As these intermediaries are often in search of immediate profit, they pay low prices, and force smallholders into debt-inducing transactions.
Brazilian farmers' organisations signal that plumetting revenues increases their risk rate, increasing interest rates on loans to farmers' organisations for working capital and investments in technology.
Plummeting farmers’ income and financial buffers
As a result, farmers’ income is directly menaced by the crisis, and farmers are reporting important reductions in revenue, which is catastrophic in countries with little or no social safety net. In general, the virus outbreak in Latin American countries has reduced access to working capital and difficulties for individuals to pay back loans. Small-scale businesses and are hindered by closing markets (tourism, restaurants, farmers’ markets) and this directly affects people’s income. The ensuing recession, according to farmers’ leaders, will reduce consumption and reduce money transfers from family abroad.
In Brazil, farmer leaders have mentioned that decreased incomes of family farmers and market instability makes it difficult to maintain financial commitments (e.g. new planting season).
According to numbers from farmers' organisations in El Salvador, SMEs witness a drastic reduction in sales (96.8% of SMEs have experienced sales reduction over the last 2 weeks and 70% of SME only has resources to maintain their business until the end of April). Typical for Latin American economies, with a high prevalence of informal economy (65% of the economy in El Salvador is informal), entrepreneurs have small financial reserves to fall back on. Typically, these informal entrepreneurs are women. Children of poor families are excluded of education during the quarantine measures and suspension of school activities.
Lack of accurate information
Meanwhile, people in rural areas of Latin America are very badly informed. Farmers’ leaders state that there are more rumors, superstition and fake news circulating among rurals than formal information. This leads to anxiety and panic in certain regions.
Impacts on poverty and malnutrition
In the least developed countries on the continent, this leads to major impacts on the very poor. Farmers' organisations in Haiti report increasing levels of food insecurity and report alarming increases of child malnutrition. Local farmers' organisation staff believe that support to Haiti's professional agricultural organizations is essential to maintain a critical level of production of local, nutritious and safe food. Similar echoes come from Honduras, where Intibuca, a local women farmer cooperative, has switched from selling to wholesale markets to selling in their local communities because local food shortages.
Increasing inequalities and violence
With regards to the situation of women, farmers’ organizations’ leaders fear for an increase of workload for women, increased exposure to gender related violence because of the confinement, a reduction of the time available for training and in some cases increased migration to the cities or abroad. It is also signaled that in Latin American countries, women make up 70% of the health workers while taking 3 times more tasks at household level, compared to men. In the near future, if public health systems of some countries would collapse, this pressure will even increase since sick people will be taken care of by women and incrementing risk of contamination.
Farmers' organisation response
Fortunately, driven by their strong sense of solidarity, loyalty and entrepreneurship, farmers' organisations are demonstrating their natural leadership in difficult times. Farmers' organisations in Peru, Bolivia and Ecuador are buying and distributing safety masks and disinfectant to improve food safety. Tejemujeres and CBC (Peru) are manufacturing tissue masks for their value chain partners to work in a safe environment.
The vegetable growers of PACAT, having their weekly farmer market in Ambato (Ecuador) suspended, have started an alternative sales channel. The growers drive around with vegetable baskets that customers order online. They have a choice of three types that vary in price from 15 euros for 12 basic products to 32 euros for 26 products. The family baskets ensure a continued income for farmers and facilitate the confinement of local consumers. Agropapa's potato farmers supply potatoes chips for the family baskets.
Konbit Famn Kaskad Dibrey (KOFAKAD) in Haiti is helping creating awareness among its members by setting up a communication campaign amongst its members explaining public measures, hygiene and social distancing rules. Since they are highly dependent on marketing activities for income, numerous farmers (especially women) continue participating in farmer markets, but at least they do so being informed and more protected than before.