Keeping the food value chain alive by focusing on key logistics bottleneck - AGRF
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Keeping the food value chain alive by focusing
on key logistics bottleneck
Maximo Torero
Chief Economist and Assistant Director General
Food and Agriculture Organization of the United Nations
23rd of April 2020
COVID-19 and the Risks to Food Supply Chains in Africa
Private Sector Roundtable
Friday April 24, 2020, 11:00 hrs. – 12.30 hrs. GMT
The basic channels of transmission Agricultural Trade
3
Imports Exports
Logistics – health and Capital Intensity of
lockdown production
1 Macro policies Food expenditures Intermediate inputs
Agricultural
4 markets Food
2 Health policies - lockdown Food demand
national &
international
supply
Fixed capital
Income elasticities on
demand
3 Trade policies
Labour Intensity of
production
4 Economic recession 2
Other channels
Energy markets
Exchange rates
1
Credit markets
Source: Schmidhuber, Pound and Qiao, 2020. http://www.fao.org/3/ca8430en/ca8430en.pdf
Sub-Saharan Africa, developing
STEP 3: Exposure -
Exposure - Exposure – Exposure - Overall Exposure - Exposure - Overall
Country/Re gion CFC per GO per ag Share of ag supply Share of food Share of ag demand
UNDERSTANDING Share of II
employee worker e xport exposure expends import e xposure
VULNERABILITIES Botswana Int. Low High High Low Int. High Int. Low Int. Low Int. Low
Mauritius Int. High Int. High Int. High High Int. High Int. High High High
South Africa High Int. High Int. High Int. Low Int. High Int. Low Low Low
Benin Int. Low Low Low High Int. Low High High High
Burundi Int. High Low Low High Int. Low High Int. High High
Cabo Verde Int. Low Int. Low Int. Low High Int. Low High
Côte d'Ivoire Low Int. Low Int. Low High Int. Low High Int. High High
Int. High Int. Low Int. Low Low Int. Low Int. High High High
Equatorial Guinea
Gabon Int. High Int. High Int. Low Low Int. Low Int. Low High Int. High
Guinea-Bissau Int. Low Low Low High Int. Low High High High
Malawi Int. Low Low Low High Int. Low High Int. High High
Namibia Int. Low Int. High Int. Low Int. Low Int. Low Int. Low Int. Low Int. Low
Seychelles Int. High Int. Low Low High Int. Low High Int. Low Int. High
Swaziland Low Int. Low Int. Low High Int. Low High High High
Uganda Int. Low Low Low High Int. Low Int. High Int. High Int. High
Zimbabwe Int. High Int. Low Low High Int. Low 1High Int. High High
Angola Int. Low Int. Low Low Low Low High Int. High High
Source: Schmidhuber, Pound and Qiao, 2020. http://www.fao.org/3/ca8430en/ca8430en.pdf
Low Low Low High Low High Int. Low Int. High
Burkina Faso
First: Where is the
problem?
Food Systems
Transformation
Prevalence of undernourishment and confirmed COVID-19 cases
Second: Economic
consequences
Food Systems
Transformation
Real GDP Growth
Annual percent change
Source: IMF- Outlook
Third: Logistical
problems
Food Systems
TransformationImpact of COVID-19 - Russian Exports
Fourth: Policy
reactions
Food Systems
TransformationThen and now: food export restrictions during two crisis
30% 33 35
Number of countries aplying export
25% 30
Share of Global Trade *
25
20%
restrictions
20
15% 16
15
10%
10
5% 5
0% 0
Covid-19[2020] FoodPriceCrisis[2008]
As a share of global trade (calories)* Number of countries with export restrictions
Note: * global trade is defined on non-intra EU trade flows, and for Source: Laborde (2020), IFPRI
unprocessed food products and exclusing sugar.Source: Laborde (2020), IFPRI
Fifth: Price responses Food Systems Transformation
African context Food Systems Transformation
Highest Valued Exports
Countries Requiring External Assistance for Food in Africa
March 2020
Data source: FAO GIEWS
Disclaimer: The designations employed and the presentation of material in the maps do not imply the expression of any opinion
whatsoever on the part of FAO concerning the legal or constitutional status of any country, territory or sea area, or concerning
the delimitation of frontiers.Top African Agricultural Imports and Exports
Top African agricultural imports and exports
What to do? Food Systems Transformation
What to do?
Meet immediate needs of vulnerable populations: Urgent increases in food availability from
smallholder farmer food production
Food Systems TransformationDisclaimer: The designations employed and the presentation of material in the maps do not imply the expression of any opinion whatsoever on the part of FAO concerning the legal or constitutional status of any country, territory or sea area, or concerning the delimitation of frontiers.
What to do?
Meet immediate needs of vulnerable populations: Issues on trade and tax policies
1.3 Adjustments to trade and tax policies
Adjustments to trade and tax policies
Encourage bet t er f unct ioning Immediat ely review t rade and Avoid generalized subsidies Reduce rest rict ions on Improve ef fi ciency
f ood market s t hrough improved t axat ion policy opt ions f or f ood consumers use of st ocks of t rade f acilit at ion
regional polit ical and economic and t heir likely impact s
int egrat ion and bet t er
f unct ioning f or
t rade in f ood
Use limit ed st rat egic M inimize use of export Reduce import t arif f s and Temporarily reduce
grain reserves rest rict ions ot her rest rict ions VAT and ot her t axes
Food Systems TransformationAfrica Continental Free Trade Area (AfCFTA): Level of customs duties on intraregional imports and on all imports
Africa Continental Free Trade Area (AfCFTA): Quality of infrastructure 2018
Africa Continental Free Trade Area (AfCFTA): Costly Non-tariff Measures (NTMs)
Share of NTMs faced by Kenya Share of NTMs faced by
Tanzania
Source: Bouet and Odjo, Africa Agriculture Trade Monitor 2019THANK YOU Food Systems Transformation
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