The COVID-19 virus has triggered a global health pandemic leading to economic recession and major disruptions of the global food system. While the pandemic has laid bare the existing challenges of the agriculture system, exposing people to disruption and hunger, it also has unveiled the extraordinary resilience of certain communities, reinforcing that food is unlike any other commodity. Whilst preventing a potential hunger crisis requires coordinated and urgent actions, a longer-term proposition emerges: a circular economy for food that offers greater resilience for society and the economy in the face of future shocks, including health and climate risks.
The vulnerability of the food system
The huge impact of the COVID-19 outbreak and the lockdown measures imposed by national governments have had unprecedented consequences for the global economy with entire sectors almost completely halted. The construction, automotive and travel industries have faced levels of financial losses never experienced before. Comparatively, the agriculture and grocery retail sectors have weathered the crisis better as people have prioritized spending on food. A number of companies have even seen their revenues increase — as demonstrated by Swiss food giant Nestlé, which reported in March its best quarterly sales growth in nearly five years — as people have reallocated disposable income usually spent on out-of-home experiences.
However, a more nuanced picture has emerged as it has become clear that food supply chains have been hugely disrupted by the sudden slump in demand from professional kitchens due to the closure of restaurants, hotels, workplaces and schools. For farmers and meat producers unable to shift sales to retailers or losing profit margins where they have been able to, this has led to significant financial losses and increased food waste. In the United States, notably, we have seen growers destroying their crops, dairy farmers throwing milk away and the culling of unsold animals, all while lines outside food banks, often of the newly unemployed, have lengthened. At the retail end of the supply chain, consumers have experienced empty shelves in supermarkets due to panic-buying.
Vietnam, India and Cambodia have indicated they will hold on to their rice crops, while Kazakhstan has banned flour and wheat exports, raising concerns in neighboring countries.