Farmer's Weekly (South Africa)
Saving the livestock industry from COVID-19
The COVID-19 global pandemic represents a grave societal threat. In a recent policy brief, the Food and Agriculture Organization of the United Nations explains how the livestock sector has been affected, and recommends how to protect the sector and its activities to preserve their contribution to food security and the livelihood of rural communities.
The effects of the coronavirus disease (COVID-19) global pandemic on the livestock sector are still largely unquantified and yet to be fully felt. While formal assessments have not been possible so far, current observations reveal disruptions to livestock value chains in many countries.
Restrictions on movement and the need for physical distancing to keep people safe and slow down the spread of COVID-19, along with requirements for additional personal protective equipment, are reducing the efficiency of industrial feed enterprises. In addition, movement restrictions and illness are resulting in labour shortages and reduced supply of raw materials. For example, the disruption of supply routes has delayed feed supply. In Argentina, the world’s largest soya bean meal exporter, restrictions have reduced soya bean supply to feed factories by half. Movement restrictions have also disrupted the ability of pastoralists to move their livestock to new grazing ground, making it difficult for them to feed the animals.
Disruption of national and international trade routes has also impeded the ability of farmers to access breeding material and replacement stock, and this, in turn, could compromise sales for input providers. The disruption of public services (food safety inspection and animal health extension services in particular), combined with the interrupted delivery and use of vaccines and medicines, has increased the likelihood of outbreaks of serious livestock diseases, such as African swine fever in East and South East Asia, as well as zoonoses.
Reduced access to markets
Another impact of the pandemic and related trade restrictions has been the closure of live animal markets in many countries, which has made it difficult for small-scale producers to sell their goods. The effect of poor market access has been exacerbated by lower consumer demand, which has seen prices fall. US pork prices, for example, dropped about 27% in just over a week in April.
As a result of limited access to markets and processing facilities, farmers are having to keep their stock longer or dump milk, leaving them with higher production costs or major losses. Movement restrictions are also interrupting the role of intermediaries who collect animals or products and aggregate them for further fattening, processing or retailing. As experience with previous epidemics has shown, disruptions of intermediaries can cause farmers to lose their links with larger buyers, especially without information systems connecting role players in the value chains. In
West Africa, for example, many livestock markets have been closed and prices for cattle and small ruminants have dropped by more than half, while pastoralists have been forced to destock on a huge scale.
Up to 90% (by volume) of meat and dairy processing in developing countries is informal. COVID-19 prevention and response has disrupted these businesses, removing another outlet for smallscale producers, who often lack the capacity to sell to formal markets.
Formal markets, too, have been affected. Trade and movement restrictions have had an impact on countries exporting livestock products as well as on farmers whose incomes depend on exports. In the EU, 35% of beef is exported between member countries. A recent ban on exports caused farm gate prices to fall in Poland, as domestic consumption represents only 15% of production. Movement restrictions have stopped livestock exports to China from the Lao People’s Democratic Republic, Myanmar, Thailand and Vietnam. A decrease in the export of meat from Latin America, especially Argentina and Uruguay, has reduced farmer revenues in this region too.
Sales and consumption
Now more than ever, the retail sector is reorienting toward supermarkets and online platforms. In China, leading e-commerce food delivery platforms increased their volumes by 400% in February 2020. This means that more packaged, longer-life and processed meat and dairy products are being shipped. While some farmers in Europe and North America can create direct channels with consumers, in countries with a low penetration of e-commerce, processing industries or supermarkets, farmers cannot sell their produce. In Vietnam, informal markets and food
vendors are under higher scrutiny, and supermarkets are selling more processed meat. The United Arab Emirates has closed all fish, meat and vegetable markets, but has kept supermarkets open 24 hours a day at 30% maximum visitor capacity.
Lockdowns are constraining consumer purchasing power, particularly that of informal workers, and those in countries with few or no social safety nets. Economic slowdown and increasing unemployment have already left people, including millions of migrant workers in India, with little or no income to buy food. During the 2014 Ebola crisis in West Africa, the decrease in purchasing power reduced domestic animal production. In the current crisis, informal markets are being closed across Africa.
In most countries, closure of restaurants and reduced tourism has led to a sharp fall in demand for food by these sectors. School feeding programmes have also been suspended, depriving millions of children of food. In China’s Hubei province, authorities reported an 80% decrease in transaction receipts for all sectors in February 2020 from the same period in 2019. However, at the end of March 2020, when measures were lifted, overall consumption rose to 93% of its 2019 level.
Fake news and rumours can also affect demand. In India, chicken sales fell after social media posts created the impression that humans could contract COVID-19 by eating chicken.
Recommended actions
While protecting public health is the first priority, governments, policymakers and the international community must also recognise and try to mitigate the effects of the pandemic on sectors such as livestock production that contribute to food security and livelihoods of farming communities.
Actions can take the form of policies and responses contextualised to fit national frameworks while ensuring compatibility with measures to suppress COVID-19 transmission. Countries can, for example, establish production safety nets, which may include new or resupplied feed reserves, special permits to transport drivers allowing them to distribute feed in remote areas, and waivers for agri-food system operations to keep inputs flowing. Authorities could also: • empower producer organisations to improve bargaining via collective marketing and purchasing;
• coordinate the supply of livestock production inputs; and
• promote the local sourcing and production of feed and supplements.
Consideration should be given to allowing food markets to remain open while facilitating physical distancing via health-conscious rules, procedures and equipment, and applying behavioural insights to market processes and environments (biodiversity, land, water, and ecosystems) where diseases flourish.
Countries should maintain open borders for imports and exports relevant to all nodes on the value chain, support transboundary livestock movement, and ensure access to natural resources for transhumant pastoralists.
In addition, guidelines should be provided for COVID-19 control and prevention along the supply chains to protect value chain actors and their families.
Governments could also help small and medium-sized businesses mitigate short-term COVID-19 effects via financial measures. These could include temporary tax relief, emergency loans, direct stimulus payments, tax exemptions, extensions for overdue loan repayments, grace periods, low interest rates, and direct public investments and subsidies. Countries severely affected might even consider subsidies to agri-food sectors that maintain activities during lockdown, and implementing price controls to reduce inflation on livestock commodities. – Staff reporter