Agriculture and Food Security in

2020
Severe disruptions caused by COVID-19

MarketLine Case Study

Report Code: MLCS0001-005

Published: June 2020
Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

1. Overview

1.1. Catalyst
Issues surrounding the state of agriculture and food security had already arisen prior to the COVID-19 outbreak, with the global
pandemic only serving to highlight these issues further. The pandemic has revealed a crisis of planning and production in the
agricultural process, which in turn is likely to lead to significant food shortages in the most vulnerable regions. This case study
identifies the impact the pandemic is having on the agricultural industry as a whole, the effect that this will have on food
security and how the disruptions could act as a catalyst for positive change.

1.2. Summary
The global COVID-19 pandemic has had an impact on virtually every market/industry around the globe and the agricultural
industry is no exception. The restrictions brought about by the pandemic have had a profound impact across the entire supply
chain of the agricultural industry, which has had a number of impacts for both consumers and companies alike. Labor shortages
and supply chain disruptions at slaughterhouses have had the biggest impact, leading to a shortfall in agricultural production
and the depopulation of livestock.
Prior to the COVID-19 pandemic, food insecurity, particularly in certain regions, had been a major concern amid the growing
global population, with the number of hungry and malnourished on the rise. The disruptions the pandemic has caused to the
agricultural industry will only serve to increase the prevalence of food insecurity in low income and developing countries, which
will have huge human and economic costs. Locust plagues in East Africa and India are exacerbating the situation, with vital
crops being eradicated, causing food shortages and threatening agricultural industries and food security.
While the negative impacts of the COVID-19 crisis are widespread and costly, the pandemic has highlighted a number of
inefficiencies across the supply chain and could serve as a catalyst for positive change within the industry. Already, the EU has
identified the pandemic in its most recent food policy, planning contingency plans for ensuring food security in the future. The
pandemic is also likely to renew interest in the prevention of emerging infectious diseases, as well as speed up investments in
agri-tech, particularly that of which provide innovative supply chain solutions.

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

Table of Contents
1. OVERVIEW 1

1.1. Catalyst 1

1.2. Summary 1

2. COVID-19 PANDEMIC IS CAUSING MAJOR DISRUPTIONS ACROSS THE AGRICULTURAL

INDUSTRY 1

2.1. Agricultural commodities have remained relatively stable 1

2.2. Protectionism could lead to price increases 1

2.3. Labor shortages are a major concern for producers 2

2.4. Supply chain issues are having a devastating impact on the meat and livestock segment 3

2.5. Government aid has been introduced to support workers across the industry 4

3. DISRUPTIONS WILL CAUSE INCREASED FOOD INSECURITY IN THE MOST VULNERABLE

REGIONS 5

3.1. Food insecurity, hunger and malnutrition have been on the rise in recent history 5

3.2. Food insecurity will become even more prevalent in low income countries 6

3.3. Locust plagues are exacerbating the situation in East Africa and India 6

4. THE COVID-19 CRISIS PRESENTS NEW OPPORTUNITIES WITHIN THE AGRICULTURAL INDUSTRY
8

4.1. Farm to Fork strategy in the EU 8

4.2. Renewed interest in preventing emerging infectious diseases 9

4.3. Automation will pick up pace 10

4.4. Investments into new agri-technology will accelerate 10

5. APPENDIX 11

5.1. Abbreviations and acronyms 11

5.2. Sources 11

5.3. Further reading 11

6. ASK THE ANALYST 11

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

7. ABOUT MARKETLINE 12

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

List of Figures

Figure 1: Wheat and rice prices (January 2019- April 2020) 1

Figure 2: United Kingdom agricultural products market category segmentation: % share, by value, 2018
3
Figure 3: United States meat & livestock market geography segmentation: % share, by value, 20184
Figure 4: Global number of individuals undernourished 2007-2017 5
Figure 5: Locust swarms are exacerbating food shortages 7
Figure 6: Farm to Fork strategy 8
Figure 7: Zoonotic diseases have become increasingly prevalent 9

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

2. COVID-19 pandemic is causing major disruptions

across the agricultural industry
The global COVID-19 pandemic has had an impact on virtually every market/industry around the globe and the agricultural
industry is no exception. The disruptions brought about by the pandemic have had a profound impact across the entire supply
chain of the agricultural industry, which has had a number of impacts for both consumers and companies alike. Labor shortages
and supply chain disruptions at slaughterhouses have had the biggest impact, leading to a shortfall in agricultural production
and the depopulation of livestock.

2.1. Agricultural commodities have remained relatively stable

Thus far, global agricultural markets have been less affected than industrial commodities, however, prices of the main food
commodities have declined about 9% since January 20 according to World Bank. The decrease was primarily caused by
mitigation measures to contain the spread of the COVID-19 pandemic, record production for some grains, and favorable
weather conditions in key producing regions. World Bank’s Grain Price Index gained 4.4% in the first quarter of 2020. According
to the U.S. Department of Agriculture’s (USDA) latest assessment, global production of the three main grains (wheat, maize,
and rice) is projected to increase nearly 1% in the upcoming growing season (September 2019 to August 2020). While
consumption is set to increase by more than 1%, the stocks to-use ratios for most grains and oilseeds remain at historically
high levels, which will help prevent further price surges.
Rice prices, however, increased due to announcements of policy restrictions by some East Asian producers and weather-related
production shortfalls. According to the Thai Rice Exporters Association, the price of 5% broken white rice, the industry
benchmark, rose 12% from March 25 to April 1, meaning prices are now at their highest since late April 2013.

Figure 1: Wheat and rice prices (January 2019- April 2020)

US$/mt US$/mt
560 Rice Wheat (RHS) 280
530 260
500
240
470
220
440
410 200

380 180
Jul-19
Jan-19

Jan-20
Apr-19

Apr-20
Oct-19

Source: World Bank © MarketLine

2.2. Protectionism could lead to price increases

As food prices increase due to the initial economic shock of COVID-19 due to export restrictions, governments may become
increasingly tempted to use trade policies to stabilize the domestic prices of food products. Naturally, although restrictions

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

mitigate pressures on domestic food markets, they also reduce supplies in the global market, which can result in prices
increasing overall. The trend of protectionism has become more prominent amid the outbreak, with a number of countries
implementing trade restrictions with the aim of ensuring food security. Additionally, a recent database published by World
Bank on April 2nd 2020 has found that the countries most affected by the COVID-19 pandemic are the world’s top exporters of
food products, with the top 50 countries representing on average 66% of world export supply of food products. As a result,
any escalations in export restrictions amongst these countries could lead to a reduction in the global export supply of key staple
food such as potatoes, rice and wheat.
Some countries have already shown signs of increased protectionism. On March 25th, the Vietnamese government introduced
a ban on signing new rice export contracts to ensure sufficient domestic supplies to cope with the coronavirus outbreak. The
country, which is the third-largest rice supplier in the world, fully resumed exports in May 2020, however, its strategy has
raised concerns over hoarding and food security, particularly for low income households. According to Bloomberg, Kazakhstan
has also implemented a ban on wheat flour exports, of which it is one of the world’s biggest sources. It has also placed export
restrictions on buckwheat and vegetables including onions, carrots and potatoes.

2.3. Labor shortages are a major concern for producers

In response to the rapid spread of the virus, labor shortages across the agricultural industry’s supply chain have intensified.
Sickness, movement restrictions and social distancing measures are starting to impact producers, processors, traders and
logistics companies in food supply chains, particularly with regard to products which require laborers to be within close
proximity. This trend has been the most apparent in the countries/regions where the virus has spread rapidly, such as the EU
and the United States. While the impact of labor shortages have been minimal until this point, action must be taken to ensure
labor supply increases in the coming months in order to avoid food shortages.
The travel restrictions implemented by the majority of countries globally is having the biggest impact on labor shortages, with
migrant seasonal workers being the worst hit. The term ‘migrant worker’ refers to a person who is engaged or has been
engaged in a remunerated activity in a State of which he or she is not a national. Migrant workers are a vital source of labor,
particularly within the agricultural industry, and as a result travel restrictions are inhibiting food supply in a number of nations
across the globe. Countries in Europe have been some of the worst hit by shortages, with the UK, Italy and Germany being
most impacted.
In the UK, George Eustice, the Secretary of the State for Environment, Food and Rural Affairs recently urged furloughed British
workers to ‘pick for Britain’ amid concerns over the loss of seasonal workers from overseas. The recent push to secure labor
has come in response to the fast approaching peak picking season, which begins in late May/June, just weeks away at the time
of writing. The coronavirus outbreak has already prevented travel for many of the 70,000 to 80,000 overseas seasonal workers
who normally pick crops during this period, prompting action from the government due to fears that crucial crops will be left
to rot in fields across the country. Fresh fruit and vegetables are expected to be the worst hit products if labor demands are
not met, this would have a significant impact on the UK agricultural products market, considering these products accounted
for 34.8% of its total value in 2018. With early evidence suggesting that recruiters are finding it difficult to source pickers,
shortages of certain products seem likely, which will have a detrimental impact on farmers and consumers alike.

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

Figure 2: United Kingdom agricultural products market category segmentation: % share, by value, 2018

Source: MarketLine © MarketLine

A similar trend can be seen in the US, another country which relies heavily on migrant workers. California is a crucial component
of the US agricultural industry, the state’s $45 billion industry produces nearly half of the nation’s fresh fruits and vegetables,
which it relies on not only for exports but also domestic consumption. According to a recent survey conducted in 2019 by the
California Farm Bureau, over 40% of farmers in the past five years have been unable to obtain the workers they needed for the
production of their main crop. Furthermore, of the total reporting shortages, it found about 70% or more indicating that they
have experienced more trouble hiring in 2017 and 2018. The labor shortages prior to the outbreak will only intensify as a result
of the disruptions caused by the pandemic, which spells bad news for farmers within the state. A recent report published by
the Agricultural and Food Policy Center Texas (AFPC) assessing the impact of the COVID-19 pandemic on Texas agricultural
production, indicates if the pandemic persists, Texas fruit and vegetable producers could be left without outlets for their highly
perishable products and lose more than $397 million.

2.4. Supply chain issues are having a devastating impact on the meat
and livestock segment
Supply chain disruptions have occurred in most markets/industries globally as a result of the COVID-19 outbreak, however the
impact it has had on the agricultural industry has been particularly damaging, due to the nature of some of the products
produced. The meat and livestock segment has been one of the worst affected by supply chain issues, with extreme
implications expected to occur for the remainder of 2020.
The US is one of the largest meat producers globally, according to in-house data, the country accounted for 17.4% of the global
meat and livestock markets total value in 2018, highlighting the sheer size of its production. More specifically, the US is the
world's largest beef producer and second largest beef exporter, it is the world's second-largest pork producer and a major
player in the world pork market, ranking second as both an importing and exporting country. The coronavirus outbreak has led
to the closure of a number of slaughterhouses across the nation due to workers testing positive for the virus, Tyson Foods, one
of America’s largest meat producers has warned that ‘the food supply chain is breaking’ due to this. It has recently come to
light that meat and livestock farmers are being forced to ‘depopulate’ their animals, due to backlogs caused by meat plant
closures. As of May 22nd, 20 major slaughterhouses have been forced to close and at least two million animals have already
reportedly been culled through a variety of inhumane methods, with the figure expected to rise in the coming months. The

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

situation in the US is being exacerbated by the consolidated nature of the meat and livestock industry, in which the number of
meat plants has reduced significantly in recent years. Political leaders in Iowa, which is the country’s biggest pig producing
state, have warned that producers could be forced to kill 700,000 pigs a week due to meat plant slowdowns or closures. If this
situation comes to fruition, the impacts on the market will undoubtedly be profound and long lasting.

Figure 3: United States meat & livestock market geography segmentation: % share, by value, 2018

Source: MarketLine © MarketLine

2.5. Government aid has been introduced to support workers across

the industry
In order to provide support to farming, governments across the globe have introduced subsidies and support packages, to
assist farmers and consumers in response to the COVID-19 emergency. One of the biggest programmes has been introduced
to the US, which is no surprise considering the size of the country’s agricultural industry and its contribution to the economy.
On April 27th 2020, the US Secretary of Agriculture Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP).
This new U.S. Department of Agriculture (USDA) program will take several measures utilizing a huge support package of $19
billion. The program will provide $16 billion in direct support based on actual losses for agricultural producers where prices
and market supply chains have been impacted, and will assist producers with additional adjustment and marketing costs
resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19. Additionally, the
USDA will partner with regional and local distributors, whose workforce has been significantly impacted by closures within the
foodservice industry, to purchase $3 billion in fresh produce, dairy, and meat. The distributors and wholesalers will then
provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community and faith based
organizations, and other non-profits serving Americans in need. The introduction of these measures will help producers offset
COVID-19-related price declines for livestock, dairy and specialty non-specialty crops, whilst also offering crucial support for
the immediate economic fallout of the outbreak. However, the program is only a short term solution and given the escalation
of the outbreak in the US, the full extent of the crisis remains uncertain.

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

3. Disruptions will cause increased food insecurity in

the most vulnerable regions
Prior to the COVID-19 pandemic, food insecurity, particularly in certain regions, has been a major concern amid the growing
global population, with the number of hungry and malnourished on the rise. The disruptions the pandemic has caused to the
agricultural industry will only serve to increase the prevalence of food insecurity in low income and developing countries, which
will have huge human and economic costs. Locust plagues in East Africa and India are also a major concern, with vital crops
being eradicated, exacerbating food shortages and threatening agricultural industries and food security.

3.1. Food insecurity, hunger and malnutrition have been on the rise in
recent history
In order to understand the impact of the COVID-19 crisis could have on food security, it is important to understand the situation
prior to the outbreak. Over recent decades, global food production has generally followed a positive growth trend, even on a
per-capita basis, however, the number of chronically undernourished has grown rather than fallen. Therefore, governments
across the global already faced challenges in feeding a growing population and ensuring that food is distributed more fairly. It
has been clear that for some time, dramatic changes to food supply have been needed to reduce the prevalence of hunger,
particularly in certain regions. In 2007/2008 an extraordinary increase in hunger despite a record cereal harvest in 2008,
suggests that adequate supply of food at a collective level, globally or nationally, does not guarantee that all people have
enough to eat.

Figure 4: Global number of individuals undernourished 2007-2017

900 13.1 14
12.6
12.2
880 11.8
11.5 11.3 12
876.9 11 10.8 10.9
10.7 10.6
860

855.1 10
840
839.8
820 8
820.5 820.8
800 812.8
805.7 804.2 6
794.9
780
783.7 784.4 4
760

2
740

720 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Number (millions) Prevelence (percentage)

Source: http://www.fao.org © MarketLine

The 2018 Global Hunger Index (GHI) the GHI scores for South Asia and Africa south of the Sahara merit special consideration.
In both of these regions, the rate of undernourishment, child stunting, child wasting, and child mortality are unacceptably high.

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

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In particular, South Asia has the highest child stunting and child wasting rates of any region, followed by Africa south of the
Sahara. In terms of undernourishment and child mortality, Africa south of the Sahara has the highest rates, followed by South
Asia. The number of hungry in these regions was already expected to rise further prior to the global pandemic, making it clear
that unless there is a shift in government policies across the globe, hunger in vulnerable regions will be only be worsened as
the population continues to swell. Research has found that the some of the main causes for hunger and undernourishment are
a lack of income opportunities for the poor and absence of effective social safety nets. The economic costs of hunger and
malnutrition within a country can severely depreciate the productivity of individuals, when more than 30% the population is
chronically undernourished, which is the case in many African countries, hindering the growth of entire economies. With the
coronavirus outbreak causing significant economic slowdowns across the globe, this combined with disruptions to the
agricultural industry is likely to have huge consequences, particularly in developing and low income countries.

3.2. Food insecurity will become even more prevalent in low income
countries
The WHO Global Report on Food Crises 2020, estimated that 135 million people in 55 countries currently face acute hunger,
however, the report was published prior to the coronavirus outbreak, now it has indicated that the lives and livelihoods of 265
million people in low and middle-income countries will be under severe threat as a result. The countries which are expected
to be hit the most severely are countries across Africa and Middle East, where the disease is threatening key trading networks
of which the populations rely on for survival. Last year, according to the African Development Bank, approximately $35 billion
worth of agricultural products were imported into Africa, despite the continent having 65% of the world’s remaining
uncultivated arable land, an abundance of fresh water and approximately 300 days of sunshine each year. The heavy reliance
on agricultural imports has not only weakened African economies, but also decimated agriculture and export jobs from the
continent. For instance, Sub-Saharan African countries such as Somalia and South Sudan imported more than 40 million tons
of cereals from around the world in 2018 to make up for gaps in local food production. Due to Africa’s reliance on agricultural
imports, multiple countries within the region are highly exposed to the economic shocks caused by the COVID-19 pandemic.
Price increases are another threat facing nations which both import and export agricultural products, driven by disruptions in
fragile supply chains, reduced imports and the closure of informal markets. Ghana for instance has already experienced a 7.9%
increase on the average cost of food. Additionally, cashew nuts, which are a major export crop for Ghana, have dropped in
price by approximately 63% between January and March this year, as major cashew kernel markets such as China, USA and
European countries have closed their borders. Ghana earned $378 million from the sale of 110 tons of raw cashew nuts in
2018, representing 43% of the total revenue obtained from non-traditional export commodities in the country. As a result,
price drops have severely reduced the income of farmers and their ability to feed their families, which in turn has heightened
the risk of small farms going out of business.

3.3. Locust plagues are exacerbating the situation in East Africa and
India
Amid the COVID-19 pandemic, multiple countries are facing locust infestations, which is exacerbating food shortages and
threatening agricultural industries and food security. East Africa has been the worst hit region, since 2019 countries have been
desperately trying to control the swarms, which are decimating vegetation and eating more in a day than the combined
population of Kenya and Somalia. In the region, swarms of desert locusts covered more than 2,000 square km, which is an area
as big at Ethiopia's Lake Tana in April alone, demonstrating the severity of the situation. According to Yimer Seid of Ethiopia's
South Wollo agricultural department, some farmers lost 90% of their crops in the first wave of locust to hit Ethiopia, which is
causing severe food shortages within the country. World Bank estimates that without adequate action, the locust population
could grow 400 times larger by June 2020 and spread to new areas, disrupting agricultural industry and food supply. It is
estimated that in Africa alone, damages and losses could amount to as much as $9 billion in 2020. Due to the ongoing locust
swarms, many countries are relying heavily on exports to sustain food supply, however, the current disruptions to agricultural

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

supply chains and restrictions on travel have meant that the availability of certain food products has either become scarce or
disappeared completely.

Figure 5: Locust swarms are exacerbating food shortages

Source: Shutterstock © MarketLine

India is also in the midst of the worst locust attack in 30 years, with millions spreading across the North of the country, which
is already facing a heat wave. Swarms of locusts have already destroyed crops spread over 500,000 hectares in Rajasthan, with
numerous states including Punjab, Madhya Pradesh, Gujarat and Uttar Pradesh in the path of the plague. The insects have
damaged seasonal crops in many Indian states, devastating agricultural workers who are already struggling with the impact of
the strict lockdown which has been imposed in the country. According to the Ministry of Agriculture, estimates suggest that in
the 2019-20 cropping season, around 3.75 lakh hectares of crops were consumed by locusts in India with a total loss of around
Rs 100 crore, highlighting the extent of economic damage the plague could impose on the agricultural industry. Attempts are
being made inhibit the damage caused, with the Indian government stepping up its response with locust containment measures
and a pesticide-spraying campaign which includes the use of drones. However, the damage already caused is likely to have a
significant impact on agriculture in the region.

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

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4. The COVID-19 crisis presents new opportunities

within the agricultural industry
While the negative impacts of the COVID-19 crisis are widespread and costly, the pandemic has highlighted a number of
inefficiencies across the supply change and could serve as a catalyst for positive change within the industry. Already, the EU
has identified the pandemic in its most recent food policy, planning contingency plans for ensuring food security in the future.
The pandemic is also likely to renew interest in the prevention of emerging infectious diseases, as well as speed up investments
in agri-tech, particularly that of which provide supply chain solutions.

4.1. Farm to Fork strategy in the EU

The coronavirus outbreak is already driving change in regard to food policies, particularly within the EU. The European
Commission recently announced its proposal for a legislative framework for sustainable food systems, which has been put
forward to support the implementation of the strategy and development of a sustainable food policy. The Farm to Fork
Strategy’s key aims are to accelerate the regions transition to a sustainable food system that should: have a neutral or positive
environmental impact, help to mitigate climate change and adapt to its impacts, reverse the loss of biodiversity, ensure food
security, nutrition and public health, ensure that everyone has access to sufficient, safe, nutritious, sustainable food, preserve
the affordability of food while generating fairer economic returns and foster competitiveness of the EU supply sector.
Taking into account some of the lessons learnt from the COVID-19 pandemic, the Commission is also developing a contingency
plan for ensuring food supply and food security. The EU will support the global transition to sustainable agri-food systems
through its trade policies and international cooperation instruments. The COVID-19 pandemic has further underlined the
importance of a robust and resilient food system that functions in all circumstances, and is capable of ensuring access to a
sufficient supply of affordable food for people. It has also made nations more aware of the interrelations between our health,
ecosystems, supply chains, consumption patterns and planetary boundaries.

Figure 6: Farm to Fork strategy

Source: https://ec.europa.eu/food/farm2fork_en © MarketLine

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

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4.2. Renewed interest in preventing emerging infectious diseases

While the history of COVID-19 is still not fully known, it is widely accepted that there are clear links between animal and human
health. The devastating human and economic costs of the coronavirus outbreak may serve as a driver for change in animal
farming and markets, which have been linked to previous diseases such as severe acute respiratory syndrome and Ebola.
Emerging infectious diseases (EIDs) are considered serious public health threats, particularly in today’s globalized society,
where people, cultures, markets, beliefs, and practices have been brought into increasingly greater proximity to one another.
An emerging infectious disease is one that either has appeared and affected a population for the first time, or has existed
previously but is rapidly spreading, either in terms of the number of people getting infected, or to new geographical areas.
Many EIDs are zoonotic in origin, which means that the disease has emerged from an animal and crossed the species barrier
to infect humans. The United Nations Environment Programme (UNEP) warned in 2016 of new diseases from animals, amplified
by the world’s rising population of livestock for meat and dairy. According to the World Health Organization, bats are the most
likely carrier of COVID-19 but believe that it is possible that the virus was transmitted to humans from another intermediate
host, either a domestic or a wild animal.
Due to the diseases links to EID’s, the pandemic may drive change in the way animals are farmed. While it is clear that wildlife
trade needs improved regulation and a crackdown on its illegal counterpart, experts also believe that countries must take steps
to inhibit factory farming and promote more sustainable forms of meat and livestock production. The crowded and often dirty
conditions that animals face in industrial/factory farming systems in a number of countries across the globe are recognized as
a perfect breeding ground for infectious diseases, in addition the transmission to humans. Furthermore, livestock and meat
production leads to deforestation and the conversion of biodiverse landscapes into barren zones for livestock feed. This also
serves to displace wild animals and runs the risk of bringing new pathogens into human environments, further increasing the
chance of EID’s spreading to humans. The pandemic will undoubtedly raise questions regarding the safety of factory farming,
however, the growing demand for meat products will only act as a strong deterrent to change. However, with pressure rising,
more urgent action may be initiated.

Figure 7: Zoonotic diseases have become increasingly prevalent

Source: WHO/Rebeccah Robinson/LSHTM © MarketLine

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

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4.3. Automation will pick up pace

Labor shortages within the industry are likely to accelerate the pace of mechanization, which has become a growing trend in
recent years. The application of automation and robotics to farm equipment (‘smart machinery’) is a key driver of producing
enough food to feed the growing global population. Automation is particularly pressing in farming within developed
economies, as global labor shortages within field work and increasingly low prices for crops make the agriculture industry a
tough business, despite heavy subsidies. Ultimately, farming will become a robotics-led industry, using big data and AI rather
than manual labor to sort good grains from bad, and using satellite imagery to influence and determine efficient crop sowing
and harvest. High labor costs have consistently remained the challenge for the industry, in part due to the global migration of
the young and able-bodied away from the countryside and into large cities. Add some more examples. The issue of labor
shortages, which has been heightened amid the crisis, is likely to trigger a more urgent response in regard to mechanization.

4.4. Investments into new agri-technology will accelerate

An estimated 1.3 billion tons of food is wasted globally each year, one third of all food produced for human consumption.
Despite the growing awareness of the issue, so far the response to food waste has been fragmented and inadequate, and the
problem is growing at an alarming rate. Apeel Sciences, a California-based company developed an idea aimed at fighting the
$2.6 trillion global food waste crisis. Its plant-derived technology gives produce an extra “peel” that slows the rate of water
loss and oxidation, the primary causes of spoilage. As Apeel’s product has the potential to change the world by tackling a
pressuring global threat in a sustainable way, it has quickly caught the attention of serious investors. On May 26th 2020, Apeel
Sciences raised $250 million in series D round of financing led by Government of Singapore Investment Corporation (GIC), a
Singapore-based provider of financial services. The funding also includes participation from Viking Global Investors, Upfront
Ventures, Tao Capital Partners and Rock Creek Group. Celebrities Oprah Winfrey and Katy Perry have also joined as minority,
non-participatory investors. Following the funding, Apeel’s total funding to $360.1 million, which is a huge feet considering the
current investment climate. This year, the company has stated that it is due to save 20m pieces of fruit from going to waste at
retail outlets, while also extending shelf-life in the home, where food waste rates are three times as high. Taking into account
the current disruptions to agricultural supply chains, the need for innovative technology which can extend the shelf life of fresh
products is more vital than ever, therefore investments into companies providing solutions to food waste is likely to accelerate
as a result of the COVID-19 pandemic.
Prior to the outbreak, new approaches to product distribution had already reduced the time of shipping for products.
Increasingly, supply chains were moving from the ‘Just-in-Time’ approaches to those based on ‘predictive shipping’ – using
forecasting approaches (incorporating demand and supply, weather, consumer rushes) to ship very fast-moving products even
before a customer places an order. Balancing the distribution of products within the logistics network has allowed matching
between the customer and product further down the supply chain, and has helped make the network more adaptable to act
on ad hoc and real-time demand and supply data. While progress has been made, the pandemic has only served to highlight
the importance of innovation in regard to supply chains, which is likely to spur further investment in this field. Twiga Foods is
one example of a company that utilizes technology to consolidate the fragmented purchasing power of urban retailers. The
company uses an app to connect 13,000 smallholder farmers to 7,000 vendors, creating an easily accessible marketplace for
produce in Kenya, thus creating a complete supply chain for those living in urban areas. Twiga is also focused on tackling
inefficiencies in the supply chain, helping to reduce food prices for consumers. Currently, between 30-50% of fresh produce is
lost through poor post-harvest processes. Through investment in its supply chain and material handling, Twiga has been able
to reduce the level of food waste by up to 70% compared to the market averages. Creadev, a global long-term investment
company owned by the French Mulliez family, announced a secondary investment of $5m in June 2019, signaling growing
interest from investors outside of Africa in the continent.

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

5. Appendix

5.1. Abbreviations and acronyms

Coronavirus- COVID-19
Emerging infectious diseases- EIDs
The United Nations Environment Programme- UNEP
Coronavirus Food Assistance Program- CFAP

5.2. Sources
California Farm Bureau Federation- https://www.cfbf.com/news/#survey-california-farms-face-continuing-employee-
shortages-4-30-2019
Agriculture and Food Policy Center Texas- https://www.afpc.tamu.edu/research/publications/files/698/RR-20-01.pdf
USDA- https://www.usda.gov/topics/animals/animal-production
World Bank- https://openknowledge.worldbank.org/bitstream/handle/10986/33624/CMO-April-2020.pdf
UNEP- https://www.unenvironment.org/news-and-stories/story/coronavirus-outbreak-highlights-need-address-threats-
ecosystems-and-wildlife
Compassion In World Farming- https://www.ciwf.org.uk/media/7440095/is-the-next-pandemic-on-our-plate-our-food-
system-through-the-lens-of-covid-19.pdf
FAO- http://www.fao.org/2019-ncov/q-and-a/impact-on-food-and-agriculture/en/

5.3. Further reading

MarketLine Thematic Analysis- Global Agriculture: Global population to reach 10bn in 2050, dramatic changes to food supply
are needed
MarketLine Thematic Analysis- Coronavirus (COVID-19): Executive Briefing
MarketLine Case Study- Coronavirus outbreak: Impact on complex global supply chains and beyond

6. Ask the analyst

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team can be contacted at ReachUs@MarketLine.com.

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Agriculture and Food Security in 2020 and beyond: Severe disruptions caused by COVID-19

Published: June 2020 Case Studies

7. About MarketLine
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