The Challenges in Food Supply Chain During COVID-19

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The Challenges in Food Supply Chain During COVID-19

Introduction

Coronavirus introduced new restrictions in the entire world that paralyzed all sectors of the economy of nations. It placed an unexpected halt on everything, including the food supply chain, with obstructions on farm labor, processing, movement, logistics, and switches in demand (OECD, 2020b). Disruptions were occasioned by countries adopted policies that aimed to contain the spread of the virus (OECD, 2020b). Further, food companies had to preserve the health of their staff working in the supply chain during the time of the crisis (World Health Organization, 2020). Thus, food production was either limited, suspended, or discontinued because all organizations were implementing social distance regulation (Aday & Aday, 2020a). The situation exposed the inherent weaknesses in the operations and food supply chain as many companies did not fully understand the extent of interdependencies in the supply cycle. This report will discuss how COVID-19 caused trade restrictions, changes in consumers demands, closure of production facilities, reduced income, and scarcity of food and suggest strategies to curb similar issues in the future.

Nature of the Problem

COVID-19 pandemic started in China around October 2019, but it became a full-blown global crisis between February and March 2020. Thereafter, all countries enforced stiff measures to contain the virus from spreading (Felix et al., 2020). The transport sector was paralyzed and there were no movements of people, goods, and services from one country to another (Felix et al., 2020). Within the borders of each nation, regulations such as social distancing and lockdowns were imposed to contain the disease which was spreading very fast (Felix et al., 2020). Therefore, distribution channels were interrupted, creating food security risks (Felix et al., 2020). Farmers, suppliers, and companies that produce and deliver food to consumers face uncertainties in the supply chain (Felix et al., 2020). For example, suppliers experienced order cancellations due to a lack of mechanisms to transport the products to the processors or to the customers (Felix et al., 2020). Essentially, it created uncertainty in the global supply and value chain that posed problems to farmers, processors, distributors, retailers, and consumers. Additionally, the following issues discussed below arose and worsened the problem.

Lockdown

Lockdown regulations by various countries affected the supply chain because workers who are a critical part of the cycle were forced to stay at home. Meaning during the entire period when the lockdown was in force in many countries, there was decreased food production or none at all which resulted in food insecurity. The unavailability of employees caused extreme interruptions in the whole chain and reduced the capacity of companies to work (Barman, Das and Kanti, 2021). In addition, this restriction changed consumers demands with many opting to buy food in bulk but they faced scarcity ((Barman, Das and Kanti, 2021). Further, buyers could not go to the markets and stores to buy food and were forced to use home delivery options due to social distancing.

Lack of Transport

Transport plays an important role in the food supply chain from when the raw food is moved from the farms to the processing firms and from processors to the retailers. COVID-19 halted the movement of goods and services from one place to another (Barman et al., 2021). Truck drivers were forced to stay at home to avoid contracting or spreading the virus (Barman et al., 2021). Thus, raw food could not be transported from agricultural farms to factories for processing and it affected the entire supply chain negatively.

Lack of Workers in Farms

The people who work on agricultural farms play a greater role in planting crops, sorting, harvesting, and loading the raw food to trucks for processing. Their staying away at home impacted negatively the work at the farm level (Aday & Aday 2020b). This weakened the production volumes of raw material required by the processors and so reduced the food safety. The scarcity due to COVID-19 disruptions was witnessed in livestock production, horticulture, planting, and harvesting of crops which usually require rigorous labour (Stephens et al., 2020). It necessitated a shortage of farm workforce that undermined the capabilities of farmers to continuously produce enough food resources for companies, suppliers, and distributors (ILO, 2020). Eventually, there was paralysis in the delivery of food, and agricultural inputs caused more problems in constant supply to the markets (ILO, 2020). Since the supply chain is an interconnection of all processes and stages, a delay in farms triggered challenges in all the other stages automatically.

Challenges the COVI-19 Disruption Caused to Food Supply Chain

COVID-19 resulted in the movement restrictions of trade, changes in the demand of consumers, closure of food production facilities, restricted food trade policies, financial pressures, and scarcity in the supply chain. These challenges caused more strain on all the stakeholders in the whole chain cycle resulting in severe effects on the global community. All these issues increased the suffering of the consumers as they grappled with the stress of dealing with the virus as well as disruption in the food supply.

Movement Restriction of Trade

Irrespective of what food production is, all food supply cycles are dependent on people. They are the component of the chain that cultivate farms, sow seeds, do the harvesting, transport them for processing and package the food for the market (Bayer, 2022). Additionally, humans load and unload the products both at the farm, factory, and retail points (Bayer, 2022). The pandemic forced workers at both levels to stay at home creating multiple disruptions throughout the supply chain at all stages. The entire world population depends on trade for access to food, for example, the US imports 32% of fresh vegetables and 55% of fresh fruits overseas (Bayer, 2022). European Union member states import 93 million tons and export 91 million tons of agricultural food every year (Bayer, 2022). However, when governments around the world imposed travel bans, border closures, and restricted transportation strategies, trade in the food industry globally was halted.

Change in Demand of Consumers

There was a variation in consumers food demand depending on the prices of foodstuffs, their economic status, consumption rates, shopping preferences, and time limitations. The customers visits to food stores and how they spend on food per visit changed (Cranfield, 2020). Further, the closure of restaurants affected many peoples eating and purchasing tendencies creating a shift from food service to retail (Aday & Aday, 2020b). There was a decrease in the number of visits to food markets, however, consumer spending increased per every visit. Demand for food products went up, for instance, in Europe, there was high demand for flour (Aday & Aday, 2020b). The bread was used by many people during the pandemic period and its demand increased by 76% (Aday & Aday, 2020b). In addition, purchasers narrowed down to food products with long life such as dried or canned food, pasta, milk, and frozen foods and it was a big challenge stocking these items.

Closure of Food Production Facilities

Measures put in place by various governments around the world to curb the spread of COVID19 impacted the whole supply chain. For instance, restrictions and lockdowns slowed down or affected the harvesting of crops in many sections of the world (UN SG, 2020). This resulted in a lack of raw materials to be processed by food industries (UN SG, 2020). Therefore, the processing plants and markets were forced to either close temporarily, carry on with production at a reduced ratio, or shut down completely.

Restricted Food Trade Policies

As the pandemic hit the entire world, many countries imposed restrictions on imports from other countries they perceived were the worst hit by the virus. Producers in the export-restricted countries were also negatively affected (Glauber et al., 2020). This necessitated the rise in food prices, and inherent food insecurity in some parts of the globe (Glauber et al., 2020). For example, during the pandemic period, Kazakhstan suspended exports of many cereal products, and vegetables (Glauber et al., 2020). The country produces more than its citizens can use, so by suspending exports, it limited global supply that certainly pushed up world prices of cereals and vegetables.

Decline in Income

COVID-19 precipitated an economic meltdown in the whole world which affected the security, availability, access, and utilisation of food. There was a decline in the income levels of people which made it difficult for them to access food items (IFPRI, 2020). Those worst affected were the extremely poorest and normally spent about 70% of their income on food (IFPRI, 2020). Likewise, many farmers incurred losses after they were forced to destroy their produce by burning or leaving them to rot. For instance, dairy farmers in the United States reported that 14 million litres of milk were being dumped each day for lack of market (Aday & Aday, 2020b). In the United Kingdom, it was reported that about 5 million litres of milk were at risk of getting spoiled every week (Aday & Aday, 2020b). Processing companies and distributors also incurred financial losses due to a lack of business activities for a long period of time.

Scarcity of Food

The socio-economic disruption of COVID-19 caused many people across the world to be undernourished. Approximately 690 were estimated to go without food in the long run during the pandemic (ILO, 2020). COVID-19 affected the whole food system; border closures, lockdowns, restrictions, and containment strategies prevent the smooth flow of the supply chain (ILO, 2020). Extreme restrictions by countries endangered the supply and distribution of agricultural and food items from the fields (Hamid & Mir, 20221). Farmers could not take their produce to the markets, thus, disrupting the international food cycle which created scarcity in some parts of the world.

Suggested Strategies to Make Food supply Chain More Resilient in Future

Despite problems and challenges witnessed during the pandemic period, the food supply chain was to some extent resilient. Over time countries learned how to mitigate the issues of food supply, availability, and access (OECD, 2020b). Whereas the effects of COVID-19 are still hitting several countries, there is a need for open and predictable international trade policies and conditions that promote the supply of food to all places where it is required. The ultimate problem or risk is not on the availability of food but on how consumers can access it (OECD, 2020b). This section will discuss the strategies that are necessary to eliminate or reduce the challenges witnessed in the supply chain in the future.

Governments should Transform Food and Agricultural Sector

COVID-19 will be with the world for some time; there are possibilities that other pandemics could hit the world in the near future. Therefore, governments of various countries should formulate policies that can respond to disruptions of this magnitude in the short term, medium-term, and long term (OECD, 2020a). This is another opportunity for the governments in the whole world to transform the food and agricultural sector to make it resilient to COVID-19 (OECD, 2020a). Additionally, the policies must be able to deal with and provide mechanisms for handling other future pandemics as well as challenges like climate change.

Decentralisation of Food Manufacturing

The centralization of food processing plants was another factor that caused disruption of the supply chain during the COVID-19 pandemic. Before the virus hit the world, the strategy was used by companies as a way of enhancing production and reducing operating costs. However, the COVID-19 situation exposed weaknesses in the centralization of manufacturing including rigid and lengthy supply chain problems and closure of the whole facility in case of an outbreak (Aday & Aday, 2020a). Decentralisation of processing could assist by having low-scale facilities that are closer to the consumers (Aday & Aday, 2020a). It reduces the storage and transport cost and could shorten the supply chain before the commodities reach the consumers. In addition, taking manufacturing closer to the customers allows them to get fresh products (Almena, Fryer, and Bakalis, 2019). Moreover, it assists in simplifying administrative regulations so that the products could reach vulnerable communities on time.

Computerise the Processors

The companies involved with the manufacturing of food should computerised sections of their plants that require the services of human beings in the future. Robotic machines can be installed at various facilities to be used in production to ensure smooth and continuous production when it is impossible for humans to work (Aday & Aday, 2020b). There is evidence that data-driven decision production is successful. Automatic has the capacity to increase food productivity by 25% and can perform tasks such as loading, offloading, placing, and packaging more effectively than humans (Aday & Aday, 2020b). The Cyber-Physical System is very important for evaluating unsafe or low-quality products during distribution (Bowler, Das and Kanti, 2020). Robots could also assist in serving consumers in food-serving factories.

Using Simulations to Forecast Consumer Demands

During the COVID-19 pandemic, varied consumer demands were one of the challenges that affected the food supply chain. Industry players should design computer simulations that could predict and forecast the customers demands (Aday & Aday, 2020b). This should incorporate essential food products for daily life and various consumers in a number of regions (Aday & Aday, 2020b). To avoid perishable items from going bad, statistical models could be applied by processors to suggest optimal decisions for solving supply and demand disruptions due to any future pandemic.

Optimal Use of Supply Chain Logistics

It is appropriate that logistic facilities, equipment, and devices are used in a more efficient way. For example, vehicles that take farm produce to the factories should be coordinated to carry processed products to the consumers (Aday & Aday, 2020b). For this to happen, stakeholders in the supply chain must work as one unit with the aim of making the process effective and profitable. Further, the stakeholders could introduce the idea of an urban distribution centre to enhance the capacity of deliveries by the trucks that are available within a particular chain system. The concept could also improve the efficiency of the collection and transportation processes (Aday & Aday, 2020b). Both private players and the governments must invest in spacious storage warehouses to help keep food items in bulk in situations where pandemics could hit in the future.

Investing in Electronic Commerce

There is a need to invest in information technology, in a particular web-based distribution system that allows information flow among the stakeholders including farmers, suppliers, processors, retailers, and consumers. The system could fasten cooperation among parties in the supply chain. Digitization could play a key role in the interaction and trading engagements among food supply chain stakeholders (Aday & Aday, 2020b). E-commerce can assist the actors to reduce costs of operations and transactions, and boost the demand (Aday & Aday, 2020b). Additionally, digitization could enable small farmers to sell their farm produce at higher prices and also assist them to reach consumers directly without going through the whole supply chain bureaucracy. For this to happen, governments must collaborate with bigger e-commerce to enable the digitization process to take effect, especially in rural parts (Zeng, Jia and Wan, 2017). This can boost access to reliable information, hence reducing uncertainties in the market and for quick resolutions to potential disruption risks.

Conclusion

Coronavirus restrictions paralyzed all sectors of the economy around the globe, including the food supply chain with obstructions to farm labour, processing, movement, logistics, and switches in demand. The pandemic revealed the weaknesses in the food supply as many companies in the cycle failed to grasp the extent of their interdependencies. It forced nations to put in place measures to contain its spread, and this grounded movement of people, and goods, across and within borders. Thereby interrupting distribution channels and causing farmers, suppliers, and companies to face unprecedented uncertainties in the supply chain.

Further, restrictions created several challenges in the food supply chain around the world. Workers and all stakeholders were forced to stay at home, in the process creating multiple disruptions throughout all stages of the distribution. Travel bans, border closures, and restricted transportation strategies imposed by various governments necessitated changes in consumer demands, Closure of food production facilities, and restricted trade policies. In addition, there were financial losses on farmers, and suppliers, reduced income levels of consumers, and scarcity of food.

Despite the challenges, countries have been putting up measures to return to normalcy. However, countries should be able to formulate policies that can respond to disruptions of this magnitude in the short term, medium-term, and long term. Food processors must decentralise manufacturing to reduce transport costs and shorten the supply chain before the commodities reach the consumers. Lastly, stakeholders should computerised processes, use simulators to predict customers demands, and adopt optimal use of supply chain logistics.

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