Image credits: Edna Winti
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News Article

COVID-19 Accelerates Food System Reform

By Jan Hogewoning | Tue, 06/23/2020 - 15:53

The COVID-19 situation has led to several major disruptions in food supply chains. The best example is the pork industry in the US. When the COVID-19 outbreak forced processing plants to shut down, supermarkets were suddenly at risk of empty shelves. The reason was not the number of pork plants being shut down, it was the fact that the plants that did have to shut down were so big that they could potentially cut off supply for a large part of the market. Today, only a few meat giants control a large share of the US industry, when decades ago the industry was far more splintered. Economic efficiencies have led to small players being eaten up by larger ones or going bankrupt for years.

Right now, the food sector is fastly overtaking BigTech as the most politicized sector in the world, according to Rana Foroohar from the Financial Times. The COVID-19 crisis, she writes, has “exposed the vulnerability of highly concentrated food supply chains.” One example is that of the US pork sector, but you could also consider the anguish of California farmers, who have been dealing with labor-shortage scares due to closing borders. The Central Valley farmers of California, together with Florida, are key to supplying customers anywhere in the US with veg.

Efficient large scale production is useful, for it provides cheaper products to the consumer. However, apart from leaving our system more vulnerable if mass scale production locations are hit, it also drives the quality of our food down. One such example, Foroohar points out, is iceberg lettuce, a vegetable with little nutrients that is favored by big producers because it can survive in supply chains for months. “US farmers have been forced to grow commodity crops rather than fruit and vegetables needed for a healthy diet,” says Foroohar. The question, she says, is how to make smaller scale local production of a wider variety of fresh crops economical. The answer, she states, could be in technology. Startups, such as Plenty, have created technology that allows crops to be grown in small urban spaces with minimal pesticides and minimal water. This efficient form of production could provide access to high quality fresh produce to populations that normally cannot afford them. As an added environmental benefit, it would take away the thousands of litres of fuel used to transport all that food over thousands of kilometers. According to the chief executive of Plenty, the number of orders for their farm tech have tripled over the last few months, Foroohar writes.

What is interesting about Rana Foroohar’s piece is not necessarily the COVID-19 induced criticism of supply chain consolidation. It is that the crisis has put a spotlight on malpractices that are not necessarily COVID-19-related, by raising the public’s call for antitrust action against monopolistic players. She cites the case of the Justice Department issuing subpoenas over the last few weeks to beef-processing giants for alleged price-fixing schemes. In another case, a federal judge handed down a prison sentence last week to a former Bumble Bee executive for his role in another price-fixing scheme concerning canned tuna. The COVID-19 crisis appears to have create a greater appetite to take on these giants of food.

Photo by:   Edna Winti
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst

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