In the history of mankind, situations have repeatedly risen when food insecurities led to social changes and explosions: hunger riots, troubled times, revolutions, mass migrations, etc. COVID-19 is no exception to one of the challenges that food security has had to face today. It has imposed shocks on all segments of food supply chains worldwide, and in turn has affected farm production, food processing, transport and logistics, and final demand regardless of the type of food products.
Beginning with farm production, it is worth noting that certain farm production is labour-intensive. Thus, disruptions due to COVID-19 has put mobility restrictions on labourers and has placed heavy congestion on inputs. Seeds, fertilisers and pesticides, which are globalised sectors, are also unable to reach their intended destinations which results in the breakdown of food production. China, for example, is a major supplier for pesticides.
COVID-19 has also led to disruptions in food processing industries due to the implementation of social distancing rules affecting labourers who would be at risk of infection. Meat sectors were mostly impacted, especially in the United States, as employees have to work in close proximity not only with livestock but with one another as well. The meat industry fell approximately 40% in the month of April of this year compared to the previous year.
Besides that, logistics and transportation difficulties have also disrupted the movement of supply chains worldwide. Although air cargo woes have impacted the movement of supply chains the most, land transportations and sea shipment challenges also contributed to this problem. This can be seen in major developed countries such as the EU, US and Canada where mobility restrictions and border shutdowns have been imposed to contain the spread of COVID-19.
The most crucial segment to face major consequences due to the pandemic was consumer demand. The demand for retail food soared, however, demand for “food away from home” (i.e. hotels, restaurants, etc.) sharply declined. The drastic shift in these types of demand has reshaped the food supply chain as the sudden clamouring for certain products, resulting in panic buying, have overwhelmed many retail shops who were unable to manage the sudden shift if consumer needs. Retail shops are now placed in a position where they need to adapt to the new normal.
While there have been minor mishaps, such as the movement of bread supply in the market during the early phase of the Restriction Movement Order (RMO), Malaysia has a track record in demonstrating resilience and robustness in the face of COVID-19 and in past food crises. The Global Food Security Index (GFSI) is the benchmark model that measures food security worldwide in terms of four dimensions: food availability, affordability, quality and safety, and natural resources and resilience. According to the 2019 GFSI, Malaysia was ranked 28th out of 113 countries and is in the “good performance” category. Although Malaysia is a small open economy, it is also a relatively big trading nation. Responses by policy makers and government agencies in Malaysia have helped induce the functioning of supply chains, both local and worldwide, and shown Malaysia’s strength in this area.
Disruptions in the food supply chain within the country is minimal as food supplies were adequate, and markets have been stable thus far. Malaysia introduced financing services to local agro-businesses and industries as well as food safety programmes. Under the current government of TS Muhyiddin Yassin, RM1 billion was allocated to ensure there was enough food supply for the Malaysian citizens during the early phase of RMO.
The Malaysian Government has also established policies with regards to global trade and markets to ensure the longevity of bilateral and multilateral relationships between like-minded countries in terms of food security. As a testament to Malaysia’s foresight, international organizations, such as the Food and Agricultural Organization (FAO) and World Bank, placed Malaysia among the top 5 countries to have benefited from the 2008 Global Food Crisis that impacted food supply chains worldwide.
Malaysia imports a quarter of its food supply globally, even though it is able to keep supply chains moving in many other different sectors, to meet market demand, especially as it is a big player in the “oil and fats” food category. Malaysia is also the world’s largest palm oil exporter, as well as the second largest producer. It is worth noting that palm oil is an essential and versatile component in the food chain as it is used in most food products, which as a consequence, has placed Malaysia on the map since palm oil is widely known to be a major contributor in the global food supply chain.
Moving forward, it is crucial that countries and international organisations work hand-in-hand in order to tackle food insecurities worldwide and to balance the equilibrium of global food supply chains, should a black-swan event, such as COVID-19, occur once again in another form. Various initiatives carried out throughout this period has showcased Malaysia’s capabilities and strengths in ensuring that global food supply chains aren’t disrupted. Together with other like-minded countries such as the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia, Malaysia could most certainly help address the scarcity in global food supply chains. Furthermore, due to both Malaysia’s strategic trading networks and ‘softer power, Malaysia should also lead the initiative to act as a global hub within the region to tackle food insecurities worldwide through the realisation of the International Food Security Coalition (IFSC).
Anis Huszainey is an Associate Researcher at ISIS Malaysia.