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Food prices soaring amid pandemic

The overall impact of Covid-19 on food security and agricultural food systems was not known in the initial phases of Covid-19. However, during the last five months of unfolding of the diseases in Pakistan, Covid-19’s effect on lives and livelihoods, more so for the poor, is gradually making economic access to food for masses difficult. As per World Bank Group, South Asian countries may face food security challenges both in terms of supply and demand if not properly managed especially for marginalized sections in the society and Pakistan is no exception to it. Already it is understood that food insecurity as per National Nutrition Survey 2018 is 36% – almost matching the poverty numbers (39%). These numbers are now set to deteriorate given current circumstances. Although currently, the virus spread in Pakistan seems to be in check, the novelty of this disease has brought uncertainty. Any surge in cases and resultant restriction on mobility may cause strain on the food system in countless ways in the coming weeks and months. All of this may have, and is already having, significant negative effects on food supply chain, which is a complex web of interactions and of actors: inputs, producers, processors, marketers, transporters, storage, consumers, etc. On the supply side, transportation restrictions, shortage of labour, and farmers’ limited access to the market will be the major challenges.

The food supply chain mainly consists of two groups: cereal group (wheat, rice, soybeans, corn, etc.) and fresh produce group (vegetables and fruits). Supplies of some food items such as pulses and oil could also be compromised because of export restrictions imposed by the producing countries. On the demand side, the impact of Covid-19 on food security is even worse. The factors, which are mainly contributing to worsening the situation are individuals’ behavior and loss of purchasing power due to unemployment. The daily labourers are at more risk now because a large percentage of the poor and marginalized in Pakistan works as daily wagers; and statistics about them are not available. In some cases, panic buying may also set in, which could cause food shortages and inflation. The low levels of liquidity in the hands of farmers are also leading to slowdown of overall buying cycle in the agricultural inputs market. This will have implications for the next season crops. It is also observed that in absence of other livelihood options, many farmers in the Punjab treated wheat (their staple food) as cash crop and sold most of their yield for ready cash. Resultantly, now they are forced to buy expensive wheat flour. The strict lockdown and/or reduced purchasing power to buy inputs in time, in coming days due to spread of disease, may jeopardize sowing of rice and cotton, which is a major source of livelihood of majority of small farmers. Reduced production of these crops will decrease the foreign exchange earnings and employment in local textile industry. Another factor would be the pandemic impact on food prices. Already literature on Ebola in Africa shows that prices soar too quickly and if not properly managed could result in social unrest. Also, urban food systems are highly vulnerable due to Covid-19 pandemic. It is particularly more evident for millions of people living in dense urban and peri-urban clusters with poor health and sanitation facilities, and unhealthy food and inadequate infrastructure in mega cities of Pakistan.

Covid-19 has implications on the informal food sector (transitional food supply chains), who have limited capacity to sustain due to lack of capital, safety nets and access to the financial sector for support under lockdown situation. Urban poor mostly depend upon such informal markets for their food purchases, disruption of this informal food sector multiplies the already grave situation and potentially cause social unrest if lockdown persists longer.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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