COVID 19 and its Impact on Transformation of Food Suply Chain

As COVID 19 continues to have an impact on all aspects of the society, the pandemic has hit particularly hard on the food supply chain. In India the rigorous lockdown has seen a huge effect on an already slowing economy, resulting in an economic stimulus from the government. But the government’s challenges are two-fold. It not only has to ensure that the virus is under control, taking several severe steps already, but also see to it that there is a prevention of an impending food crisis in the country.

The government’s duty now is to ensure that the food supply chain is sustained and continues to function in a somewhat regular manner. This is particularly important because were the government to step into distribution, it would not be able to completely undertake the food distribution given that an overwhelmingly large percentage of the supply is done by the private sector.

Since India’s food supply chain is not heavily mechanised, the displacement of migrant workers and its impact on available manpower has been significant. We are dependent on workers for planting, harvesting and movement of food supplies.

Here’s a look at what aspects have been impacted by the disruption due to the pandemic:

1. Problem of sourcing

While markets have had good sales, that is primarily due to the problem of panic and the tendency to hoard. The markets are now, due to the shortage of migrant workers, understaffed and to top it off they are facing a shortage in supplies. The government needs to ensure a better and smoother movement of food supply in order to avoid major shortages in urban areas.

2. Processing plants functioning

The scaling back and in some cases, shutting down of food processing plants has also made a huge dent in the food supplies. Plants are also hit by staff shortages due to the lockdown measures and as a result, the supply of raw materials has also had to be significantly adjusted. We have to look no further than the way the poultry farmers have had to reduce supply for a clear example of impact.

3. Logistics of food supply

As mentioned in the introduction, logistics of supplying the food has quickly become the biggest challenge for the food industry. As a direct result of the restrictions in movement and locking of borders, the food supply chain faces multiple restrictions on the route to resuming normalcy.

4. Harvesting season

Spring season is of crucial importance to the farming industry and as a result, the need for workers in the fields has been highlighted clearly. The lockdown has been implemented in several parts of the country with such severity that movement to fields has been restricted. As a result the harvesting of crops during the spring season has been impacted and there is a real fear of crops laying rotting in the fields.

The larger evidence suggests that while farms have been impacted, the bigger impact has been felt by small and medium-sized enterprises in urban areas as food supplies dry up. There is a need for clear and smart government policies to mitigate the impact of the lockdown to avoid higher food prices and severe impact on millions of employees.

So what can we hope for the government to do to mitigate the fallout from the lockdown and minimize the impact felt on the food supply chain? It is a huge undertaking, especially in a fast developing economy like India. The government needs to balance the need to implement public health measures to slow the spread of COVID 19. It also needs to minimize the impact of food security for the country and the knock-on effect on the food industry’s employment and income.

The need for a clear transformation is evident and as such the food supply chain has to be managed significantly better going into the future.

  • Upgrades
  • Digitising more of the country’s food supply chain will make it less vulnerable to such an event in the future. Further mechanisation would help in reducing the dependency on migrant workers. Bringing in the use of AI will also help in overseeing a transformation as it will help in predicting demand spikes and bottlenecks in advance and taking apt measures to reign in such spikes.

  • Total food supply management
  • As sourcing food sourcing becomes harder for businesses, one route to be considered is to widen the pool of suppliers, especially regional ones, and maintain larger strategic stocks. It may be more expensive, but it also spreads out the risk.

    Alternatively, removing rarer/problem foods will also free resources to invest in the innovative development of new products that promote a healthy lifestyle. It is important to invest in relationships with supply chain partners. Supplier and customer loyalty and resilience are pivotal to ensure business continuity and to thrive post-COVID-19.

The challenges for India and its food supply chain are significant. The government needs to implement safety nets for businesses and migrant workers, creating schemes that promote distribution of emergency ration and stringent upgrades of sanitation at wholesale markets. And finally, in the long run, the government needs to make investments and create an infrastructure for the transformation of site design and hygiene practices that will ensure we are better prepared for future disruptions in the food supply chain.