COVID-19 Destroying Our Global Value Chain

This main goal of the article is to analyze the coronavirus’s influences on consumer and producer behaviour to be specific to the global food chain. In order to be aware of the effects caused by the virus, we have to clarify certain concepts such as the coronavirus itself, so what the virus is and, more importantly where it came from, so where the outbreak began. In addition, I would like to highlight the consequences of COVID-19 on a macro as well as on an individual level. Another significant term is the global value chain, the reason why I want to underline the global value chain is that food is a value and we have to understand the system first in order to understand the food chain.

Resource: CB Insights

What is a coronavirus?

According to the World Health Organization, coronaviruses are a massive family of viruses which is able to cause illness in animals as well as in humans. In human beings, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). Indeed, the most recently discovered coronavirus causes coronavirus disease COVID-19

This new virus and disease were unknown before the outbreak began in Wuhan, China, in December 2019. In a short amount of time the deadly virus was transmitted between the individuals. Unfortunately, the serious virus of COVID-19 is much more than just a health crisis. In fact, the United Nations Development Program elaborates that the virus has enormous potential to establish devastating not only economic but social and political crises that will leave deep scars for humanity and upcoming generations (2020). As a matter of fact, the virus has not only effects on a global level, but on an individual level. To summarize, COVID-19 is an issue we are all affected by in distinct aspects as I mentioned above.

Resource: the US NEWS

The Concept of Global Value Chains

The term corresponds to international production activities, to put things differently the companies and firms aim to optimize the production processes by locating different stages across various countries, so investments are increasingly organized within so-called GVCs. To memorize the history, the past decade has observed its dominant direction towards the international distribution of value chain activities, like design, production, marketing or distribution, this entire system is called the global value chain.

To provide an example, a product is produced in China but sold in another country like Australia. Additionally, in such liquid modernity, how do smallholder, especially petty commodity producers join the contemporary agri-food system at household level? How do they compete with the structure? One way is through global value chain, like contract farming. Two major points that are the followings:

  1. The implications of agri-food globalization for smallholder farmers integrated into global agri-chain
  2. How can we introduce local rural development and poverty reduction into global chain research?

In terms of global agri-food chains and rural livelihoods, the contemporary globalization processes in the agricultural and food sectors have seen improving integration of localized producers into a globalizing agri-food system.

Another example is the raspberry production complex: The global and national context; other words, Chile was a decisive exporter of raspberry many years. However, we observe the re-entry of Serbia and Montenegro into the world market at the end of the 1990s. The capital shifted from Chile to Serbia and Montenegro. This resulted in significantly diminishing prices. As a consequence, the researchers try to comprehend the impact of the raspberry global value chain in Chile in the reading (2011).

Resource: Future Learn

Global Food Chain

The food supply chain is a complicated web that involves diverse elements such as producers, consumers, agricultural and fishery inputs, processing and storage, transportation, and marketing. Not to mention, the food supply has been sufficient, further the markets have been stable till this time. Global cereal stocks are at satisfactory levels and the outlook for wheat and other major staple crops for 2020 is positive. Even though less food production is already likely, such as fundamental goods like fruits and vegetables, they are not able to be remarkable due to the lockdowns and disruption in the value chain.  

On the other hand, in the fisheries and aquaculture sector, the implications may alter and be quite complex. As a matter of fact, this can lead to create domino effect throughout the value chains in terms of supply of products, further the opportunity of certain species. Besides, for wild-capture fisheries and aquaculture, there are certain complications such as in logistics related with restrictions in transporting the products, border closures and most critical the decreased demand in hotels and restaurants. Therefore, these problems do not only affect the market but the prices, too.

All things considered, there are obstacles in terms of the movement of the food due to the border. As a conclusion, farmer and fisher particularly are hindered from selling their goods and suppressing their productive capacities. As a result, the urge to advance international standards for hygiene, working circumstances and living facilities on agricultural activities need to be reconsidered with the fact of the global pandemic (2020).

Conclusion

The pandemic has not only disrupted lives and companies, it has illuminated underlying fragilities in the global value chain (GVC) that drives economies around the world. Shortly, COVID-19 has affected us on many levels; to be more specifically, we are influenced on a macro level as well as on agency level as I elaborated in my writing. Considering the arguments as humanity, we are affected by the virus negatively. All in all, it is very vital to protect ourselves from COVID-19 through wearing masks and washing our hands frequently, with the hope of staying safe and sound

References

Challies Edward R.T. and Warwick E. Murray. 2011. “The Interaction of Global Value Chains and Rural Livelihoods: The Case of Smallholder Raspberry Growers in Chile”. Journal of Agrarian Change, Vol. 11 No. 1 (January 2011) pp. 29-59.

Food and Agriculture Organization of the United Nations. (2020) Q&A: COVID-19 pandemic ÔÇô impact on food and agriculture.Retrieved from http://www.fao.org/2019-ncov/q-and-a/impact-on-food-and-agriculture/en/

United Nations Development Programme. (2020). Covid-19 pandemic, Humanity needs leadership and solidarity to defeat the coronavirus. Retrieved from https://www.undp.org/content/undp/en/home/coronavirus.html

World Health Organization. (April 17, 2020). Q & A on coronavirus (Covid-19) Retrieved from https://www.who.int/emergencies/diseases/novel-coronavirus-2019/question-and-answers-hub/q-a-detail/q-a-coronaviruses