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Whether we’re snacking on grapes from Chile, peppers from Peru, tomatoes from Jordan or dates from Iraq, most of us expect to benefit from a highly efficient global food supply chain.
Today around 23% of all the food produced in the world is traded internationally and the global food system accounts for 10% of global GDP. In the United States alone, 32% of vegetables, 55% of fresh fruit and 94% of all seafood consumed each year are imported. The system works fine – until it doesn’t.
What has changed in global food supply chains?
In recent years, the global food web has operated relatively seamlessly. Consumer demand has been steady and supply chain disruptions minimal, meaning the flow of goods from farm to fork has been relatively easy to predict and manage for suppliers and retailers. But the current system relies far too heavily on this consistency and has ultimately prioritized efficiency and cost reduction over long-term supply chain resilience.
The COVID-19 outbreak has presented global food supply chains with a series of major challenges. But it also served as a stark warning of what the future might hold if major changes to the system don’t happen.
What impact has COVID-19 had on global food supply chains?
In the months since the coronavirus outbreak, the stability of global food supply chains has been hit hard.
For starters, a drop in shipping frequency has seen containers stack in some corners of the world while in others exporters found them almost impossible to find.
As world trade subsequently slowed and the food service industry came to a virtual standstill, crops were left to rot and farmers were forced to throw away large amounts of unwanted produce. Others have quickly pivoted to scale back operations to cut unnecessary costs, but still struggle to rely on single buyers.
The sudden and drastic shift in consumer spending, which included stockpiling and panic buying, put additional pressure on retailers and supply chains around the world. For many consumers, this was the first time they were unable to buy the products they wanted on demand.
While these factors have certainly tested global food supply chains, the industry has been relatively quick to rebound. Farmers and wholesalers found new buyers or shifted their products to smaller retail sizes, while the foodservice industry gradually came back to life. Of more concern are warnings of future disruptions – those from which the global food supply chain may not recover as quickly.
How can we learn from the devastation caused by COVID-19 and prepare for a better and much more resilient future?
How can we build resilience in global food supply chains?
In today’s world, restaurants have reopened, grocery store shelves are overflowing, and we are enjoying a new kind of normal. But challenges remain for global food supply chains.
In October last year, BRINK News reported surges in shipping container prices, driven in part by renewed demand for products in the foodservice sector. Container costs between China and North America, for example, have increased by 1,250%.
In addition, more frequent instances of extreme weather events including droughts, floods and windstorms will further disrupt supply chains, ruin crops, impact livestock and affect water supplies. .
It is believed that a large-scale disaster, whether a severe weather event or an outbreak of crop disease, could reduce food production by 10-15%with a report estimating that staple food crops will decline by a third by 2050. This would ultimately lead to problems on a scale far beyond what we experienced during the COVID-19 pandemic.
To mitigate these risks and ensure the smooth flow of food around the world, global food supply chains must prioritize resilience and long-term sustainability. Here’s how:
1. A change in farming practices
To mitigate the risk of extreme weather events, farmers could consider alternative farming methods. This could include favor crops that require less water.
2. Reduce dependence on international trade
It’s hard to imagine a world in which American grocery stores no longer stock every product, year-round. But relocating agriculture and promoting a shift to eating locally produced, seasonal foods would reduce pressure on global food supply chains and establish a much more resilient, green and profitable system. While outsourcing production overseas has always kept prices low and supply stable, it may be time to change the system.
3. Investment in infrastructure
In some countries, collapsing infrastructure could explain some of the ongoing supply chain disruptions. If policy makers were to invest in repairing and improving roads, bridges, railways and ports, shipping delays could be significantly reduced.
4. Pesticides and fertilizers
More efficient and targeted use of pesticides and fertilizers could allow farmers to get good yields with less chemicals.
5. Reduce meat consumption
Cattle occupy nearly 80% of the world’s agricultural land, but produces less than 20% of the world’s caloric intake. If people consumed less meat and animal products, a huge amount of land would be freed up to grow crops for human consumption.
6. Genetic modification
Genetic modification could help crops and animals adapt to changing conditions caused by global warming.
7. Contactless Farming
Technologies known as “no-touch” agriculture could one day address labor shortages by having crops planted, monitored, picked and dried, and animals fed and watered by AI machines. 3D-printed foodstuffs could also become more widespread in a bid to reduce reliance on global supply chains.
What does the future hold?
There is no simple solution to the current challenges facing the global food supply chain. While building more localized supply chains promises some benefits, it is not without risks. Smaller supply systems may be particularly vulnerable to extreme weather events and regional droughts.
Furthermore, while resettlement operations promise some sustainability benefits, doing so on a large scale would likely devastate agricultural economies around the world. Ultimately, it will be important for governments around the world to invest in resilience at every stage of the global food supply chain.
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