This report presents the results of a review of 11 guides for value chain development (VCD). The review compares the concepts and methods endorsed and assesses the strengths and limitations of the guides for steering development practice. Overall, the guides provide a useful framework for understanding markets and engaging with chain stakeholders, with a strong emphasis on strengthening institutions and achieving sustainability of interventions.
By Sara Gustafson published in Dec 22 2020
While global food systems have remained generally resilient to the ongoing COVID-19 pandemic, regional and local systems, especially in food-deficit countries, face growing challenges. These include diminished purchasing power, disruptions to domestic supply chains, and higher food import costs due to rising global prices, according to the latest AMIS Market Monitor. Understanding how COVID-19 is affecting local and global food value chains is key in establishing effective policy responses to mitigate the harmful impacts of the ongoing public health crisis. A recent webinar on COVID-19 risk, co-organized by the CGIAR Research Program on Policies, Institutions, and Markets (PIM) and Food Security Portal, examined the results of several recent studies on how various food value chains are responding to COVID-19.
The event was moderated by Nicholas Minot, Senior Research Fellow and Deputy Division Director of IFPRI’s Markets, Trade and Institutions Division, as well as co-leader of PIM’s research on Inclusive and Efficient Value Chains.
The first speaker was Kalle Hirvonen (IFPRI), who discussed food consumption and food security during the pandemic in Addis Ababa, Ethiopia. Despite Ethiopia’s large population, the country has seen remarkably low rates of COVID-19 infection. Rapid government action, including social distancing mandates and expansion of social safety nets, has contributed significantly to Ethiopia’s containment of the virus. Ethiopia never went into a full lockdown, which Hirvonen suggests may explain the study’s positive findings on food security.
The study itself utilized household surveys which began before the outbreak of COVID-19 and continued via phone through August 2020. The surveys captured self-reported changes in income and food and nutrition security among 600 households in the capital city of Addis Ababa. More than 50 percent of respondents reported experiencing a loss in income during the study period, with the poorest households seeing the highest losses. However, households’ dietary diversity scores saw virtually no change as a result of the pandemic.
“Even the poorest households in Addis are consuming a much more diverse diet than we usually see in rural areas,” Hirvonen said.
The study also found that while there was no significant change in households’ food budgets or total calorie consumption, what households were eating did shift during the pandemic. Consumption of more expensive, perishable fruits and vegetables fell between September 2019 and August 2020. At the same time, consumption of cheaper staple foods rose. This finding held true regardless of whether households reported experiencing job or income loss.
Overall, Hirvonen concluded, the findings suggest that swift government response and the populations’ high rates of adherence to COVID-19 prevention measures helped Ethiopia avoid the full lockdown scenario seen in many other countries. This may have prevented disruptions to local food supply chains and helped Ethioipa’s agricultural systems remain resilient to COVID-19.
Next, Sudha Narayanan (Indira Gandhi Institute of Development Research) highlighted responses by India’s food and agriculture supply chains to the country’s strict lockdown measures.
The government of India imposed a nationwide lockdown fairly early on in the pandemic but did so in a sudden and dramatic fashion that had an immediate negative impact on food and agricultural value chains. Fishermen who went out to sea one day returned the next day to find that they could not sell their catch because markets had been closed. Truckers transporting food across the country could no longer cross state lines and often simply abandoned their deliveries. Migrant workers could no longer travel, leading to agricultural labor shortages in rural areas.
“It was . . . cataclysmic in terms of impacts on livelihoods,” Narayanan said.
The transportation disruption and labor shortages caused by the lockdown resulted in declines in both supply and demand for food and agriculture products. These challenges have increased both the risks and the costs associated with supply chain operations. Market arrivals for 40 studied food crops collapsed, and the prices farmers received for their goods fell sharply. At the same time, consumer food prices increased significantly in urban areas. These supply chain frictions continued through the summer, even after the strictest lockdown measures were lifted.
Narayanan wrapped up with several important conclusions. First, the government plays an important role in food availability and access in India. The government procures a large volume of staple foods, specifically grains, for distribution through social safety net systems; these programs helped to keep cereal and pulse prices somewhat stable throughout the months of lockdown. Second, informal food sales also proved to be crucial during this period, helping both laborers and consumers be more resilient to supply chain disruptions. However, despite these somewhat functional channels, overall food expenditures fell by 12 percent between March and July. While producer prices have recovered generally, inflation in food and agriculture markets continues to rise.
“We have both a health crisis and an economic crisis that are ongoing and we have to watch carefully to see how this pans out further one,” Narayanan concluded.
The final speaker was Ben Belton (WorldFish / Michigan State University). Belton presented findings on the impact of COVID-19 on Nigeria’s critical fish sector. The study utilized high-frequency phone surveys that sought to track data related to fish production, prices, producers’ access to various inputs, and assistance provided to the sector.
The surveys identified several short-term effects of Nigeria’s COVID-19 lockdown measures (defined as lasting 3-4 months), namely difficulty buying or selling fish and related products and difficulty accessing transportation for fish products. The impacts of the lockdown on fish value chain actors’ access to inputs lasted slightly longer, while demand for fish and fish products has seen the longest lasting consequences and has not yet fully recovered from Nigeria’s lockdown measures. Thus, there has been a lagged effect following the initial shock.
Employment in the fish sector dipped significantly following the outbreak of COVID-19 and the start of Nigeria’s lockdown. Employees were often unable to get to work due to travel limitations and disruptions to public transportation; at the same time, reduced sales led many firms in the fish sector to suspend their operations and hire fewer laborers.
Belton highlighted that the challenges faced by Nigeria’s fish sector have shifted throughout the study period. During the early spring, lockdown measures and movement restrictions formed the most substantial challenges to the sector’s functioning. By September, however, the most critical challenge facing fish value chain actors were input shortages and subsequent skyrocketing input prices. This again highlights the lagged effect of the outbreak of COVID-19.
Importantly, the fish value chain received very little assistance during the pandemic: less than 2 percent of respondents in the April survey reported receiving any help. Additionally, the bulk of the assistance that fisheries did receive was through informal channels (family and friends) rather than through government programs or NGOs.
“We see clearly that government safety nets were not widely implemented,” Belton emphasized. “Our recommendations then are addressing these points in future crisis situations.”
The seminar concluded with a Q&A session and closing remarks from Frank Place (PIM Director), who highlighted the importance of the studies covered by the webinar.
“Impacts in these countries will have regional and global spillovers,” Place concluded, “so there’s keen interest in understanding the effects of COVID-19 and government responses in these three examples.”