17 May 2020
Protecting the ASEAN food supply chain during the Covid-19 crisis
Food Supply Chain

Since the Coronavirus/Covid-19 outbreak there have been deep concerns about food security in South East Asia. So, in what ways is the virus likely to be detrimental to the food and beverage industry in ASEAN countries specifically and what steps can be taken to keep the supply chain safe and robust?

Fundamental fears

From the beginning there has always been the concern that Covid-19 remains active on food. However, experts have told us that by following traditional food hygiene practices, infection via food itself is highly unlikely. The problem is more about how food is distributed, packaged and transported within the supply chain as the virus remains active on such surfaces as cardboard, stainless steel and plastic for up to 24 hours. There is a need for labour within the supply chain (the primary source of infection appears to be through human interaction) to enable distribution.

The food and beverage industry in South East Asia

The food and beverage industry is especially important in South East Asia as it brings 17% of the total annual GDP to the region. At the same time, 35% of the total labour force is employed within the industry. All the countries within the region are dependent on each other to supply unique food commodities to keep the supply chain flowing.

At one level the production of food has been restricted in some cases because employees have not been able to go to work normally and carry out duties. On another level, exports and imports have halted because borders have been closed.

Factors needed to bolster the supply chain

So how can governments support communities throughout the crisis when raw materials, labour, and access to trade borders may not be available? In their report, “Maintaining Food Resilience in a time of uncertainty”, the FIA (Food Industry Asia) suggest that because the food industry provides essential products and is driving a large share of the economic output, borders should remain open, financial assistance should be offered to vulnerable businesses (and consumers) and the labour force should be protected. Listed below are the main factors to be targeted.

Protection of labour supply

In Malaysia, the government has required critical industries to remain open while using only 50% of the workforce. Expectations in Singapore are similar, but companies must apply for the right to continue operations and gain any governmental support available.

Individual governments can ensure that food industry businesses workers are largely exempt from lockdown restrictions. This will mean governments will need to work closely with private enterprise to make sure that health and safety regulations specific to Covid-19 are in place. For instance, employers will need to be able to supply Personal protection equipment (PPE) and testing facilities.

Financial Assistance for Business

Financial Assistance for Business

Easily accessible and low interest loans could be provided, and governments could also support lenders by offering guarantees of support. The government could also support small and medium business in the food and beverage industries in South East Asia by allowing tax holidays to reduce the overall financial burden.

Measures for smallholders

60% of the workforce in the food and beverage industry in the region are smallholders. Much of their supplies are acquired through the markets as is much of their selling. Markets would clearly be a place of contamination at the moment, so it maybe worth considering the idea of collection centres and introducing other mechanisms such as e-commerce to reduce face to face contact.

Border restrictions during Covid-19

For the continued distribution of finished products and raw materials, transport within the food industry would need to be seen as exempt from restrictions so that the supply chain is interrupted minimally. This could include priority lanes for freight transport and maintenance support for industry staff at ports, airports and train stations.

Social support for consumers

As many consumers will not be working, incomes are likely to be reduced – hence they may not be able to afford the quality nutritious foods for their families. Financial support therefore needs to be provided by public bodies to enable them to access food necessities.

What are we seeing as the crisis continues?

Businesses are finding they can adapt their services in order to thrive. For instance, restaurants are able to act as takeaways. Exemption and special allowances are being stretched to other workers involved in the supply chain such as distribution workers in Malaysia. Singapore, Malaysia and Myanmar have stated their commitment to keeping their borders open during the crisis. Governments may have to re-visit some of their more stringent policies which are having a detrimental effect. For instance, restricting rice imports from Vietnam and Cambodia. This is causing chaos in supply chains and may lead to protectionist behaviour from countries within the ASEAN.

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