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A Global Supply Chain Under Stress

Photo: Courtesy of chuttersnap on Unsplash

Markus Lipp, ML

Head of the United Nations’ FAO Food Safety and Quality Unit

COVID-19 has impacted every aspect of modern life, including the supply chains that keep our groceries and restaurants stocked.

The world has become reliant on an increasingly complex — and delicate — global supply chain. According to the Food and Drug Administration (FDA), the United States imports 15 percent of its food — 32 percent of its fresh vegetables, 55 percent of its fresh fruit, and a whopping 94 percent of its fresh seafood. This involves 200 different countries and 125,000 facilities and farms.

With so many moving parts, it’s easy to see how a global pandemic might impact that supply, and how important it is to mitigate the effects of that impact. “Food is really, really elemental to people,” said Markus Lipp, ML, Head of the United Nations’ FAO Food Safety and Quality Unit. “It’s also different than other consumer products. Food is more intimate because we ingest it. It’s part of our culture.”

Two worlds

The global supply chain has proved vulnerable to the effects of the pandemic. In the United States and Europe, the meatpacking industry has struggled with outbreaks that have closed plants, but it can be worse in developing nations where “informal markets” spring up without the oversight found in richer nations.

“There are anecdotal reports of markets in Peru where 80 percent of the workers were found to be positive with COVID-19,” noted Lipp. “Informal markets typically don’t pay very well, so housing is very dense, and isolation of sick people is extremely difficult. There’s also no sick leave, so workers tend to show up to work when they’re sick.”

This sets off chain reactions. When workers in distant countries can’t bring in harvests or process food for shipment, food becomes scarce on local grocery shelves, and restaurants have to shut down. This, in turn, affects other suppliers who rely on restaurant orders. But even here there’s a disproportionate impact.

“In developed countries, bad harvests cause prices to go up,” Lipp said. “But because the amount of money that’s spent on food is low enough, people can compensate. But in developing countries, particularly in areas of Africa and Southeast Asia, a bad harvest can lead to hunger.”


One reason the global food supply chain is impacted so severely is its lack of what economists call “elasticity.”

“Elasticity is a measure of how easily a change in demand or supply will impact the price, availability, and affordability of a product,” Lipp explained. If increased demand can be easily met, then prices remain stable. But the food supply has natural limits to how elastic it can be.

“Plants and animals grow at a certain rate and that cannot be sped up,” Lipp explained. While storage can help make the food supply more elastic, there are limitations there as well. Milk, for example, can only be stored for a very short time, which is one reason so much milk is being poured down the drain.

The question of what restaurants and workers can do to protect themselves and those vital supply chains that feed us all comes down to some basics.

“How can you future-proof a society or your livelihood?” Lipp asked. “First and foremost, maybe the most important thing any worker can do is to protect his or her own health,” he said. Another guardrail against disruption is education. “Invest in education and invest in the education of children. That is one of the best measures to have the flexibility to adapt to changes,” Lipp said.

And those changes will always come. “There will be another pandemic at some other point,” warned Lipp. “It is inevitable that some other thing will have a similar effect.” And it’s up to us to be prepared.

The views expressed in this publication are those of the author(s) and do not necessarily reflect the views or policies of FAO.

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