Much blame was, and still is, put on China’s food practices, with ‘wet markets’ and/or the consumption of a bat or a pangolin seen by many as the cause of the virus. Although wet markets were closed the origin of Covid-19 is still unknown. However, the virus’s impact on the agribusiness sector has had a dramatic global effect.
Closures of restaurants and other parts of the food service sector led to a change in the way consumers accessed food, adding more complications to the challenges supply chains were already facing as countries closed borders and social distancing became the norm.
Cambridge Consultants’ head of industrial and energy Niall Mottram explains that Covid-19 threw into the spotlight the overly complex nature of supply chains, which were sometimes too optimised and didn’t leave much room for flexibility.
Restaurants dive, supermarkets thrive
An immediate problem came from the closure of restaurants and catered spaces such as schools, leaving suppliers with produce that had nowhere to go.
“If you are a small grower, or even a big, consolidated grower, in somewhere such as the US, food service makes up 50% of your customer base, and that shut down overnight,” says Mottram.
Suddenly, everyone from dairy to vegetable farmers found themselves with masses of produce that their usual clients no longer needed. News channels were filled with images of milk being dumped, which highlighted a lack of flexibility in food supply chains.
People who would frequently visit restaurants, however, were now cooking more meals at home and buying more groceries, explains Mottram, and supply chains were not set up to undertake that change.
There are millions of farmers around the world and individually they do not have much power, but as they group together they come up with different models and make a point as a collective. Niall Mottram, Cambridge Consultants
This spearheaded change and gave a push to collaborative initiatives, both new and existent. One such example that Mottram highlights is the new alliance between indoor vertical farming company Plenty and berry giant Driscoll’s in the US.
The two came together in October 2020 using Driscoll’s plant genetics and Plenty’s technological expertise. Mottram explains that this collaboration is driven from a quality standpoint – to produce better tasting berries – but that it doubles down as a way of addressing supply chain issues, as Plenty sells the berries directly to the consumer, taking distribution issues out of the equation for Driscoll’s.
A model where growers look for partners that give them direct access to consumers is likely to become more common, according to Mottram. He adds that although this system is likely to gain popularity across other industries, it is well-suited to agribusiness as it is such a fragmented market.
Collaboration among growers gives them more power
“There are millions of farmers around the world and individually they do not have much power, but as they group together they come up with different models and make a point as a collective,” says Mottram, who cites the example of the California-based Farmers Business Network, a farmer-to-farmer network and e-commerce platform that has seen a growth boost during the pandemic.
The online platform was valued at about $1.7bn in 2020, from about $1.1bn in 2019, according to Mottram, and includes a marketplace platform where farmers can interact directly with manufacturers, distributors and agricultural services providers. This shows that such collectives offer a potential route for all individual farmers to have closer access to supply chains, he says.
Mottram believes that these collaborative operations are a way of addressing technology gaps. In the US, the Western Growers Association, an association representing family farmers who grow fresh produce and tree nuts in California, Arizona, Colorado and New Mexico, is working on consolidating the specific needs of its diverse portfolio of growers as a way of finding the commonalities in terms of technological needs. This gives them the power to go to an agricultural technology company and request things such as automated harvesters or instruments to harvest data.
“The economies of scale mean that the investment required to make that technology work and commercialise it is there,” says Mottram. “So I think [Covid-19] is forcing more collaboration to drive the benefits that will hopefully come from technology.”
The pandemic has also highlighted the importance of agribusiness, according to Krista Soda, a senior consultant at Nationwide Agribusiness Insurance Company. When the lack of flexibility of supply chains was highlighted, and food security in developed countries became a hot topic as people rushed to hoard canned food and dry pasta, the central role that the agribusiness sector plays in everyone’s lives came to the fore.
How to solve agriculture’s seasonal labour problem
The Covid-19 outbreak also shone a light on seasonal labour and agriculture’s reliance on it, according to Mottram. Although there is a recognition that this is not going to change any time soon, the pandemic has accelerated the drive towards ways to complement a smaller labour force, he says, referring to robotics.
Depending solely on seasonal labour – often done by a migratory workforce – does not seem feasible anymore and this will hopefully accelerate the right types of agricultural technology, says Mottram. This has become an issue in countries where freedom of movement has been restricted by Covid-19, with closed borders and quarantine on arrival cutting off this supply of labour. Mottram says that changes to address this issue are not being implemented quickly enough.
This opinion is backed by a survey by research centre Lincoln Agri Robotics, which shows that – at least in the UK – the pandemic has not accelerated the adoption of robotics at the expected level in agriculture in light of labour shortages, although respondents did see automation becoming more prominent in the future, albeit as a complement to workers.
It is undeniable that the Covid-19 pandemic has highlighted the importance of agribusiness, but the sector has also shown its flaws and weaknesses in the past 12 months. There appear to be green shoots, however, of a more resilient, sustainable and fair food system forming from the lessons learned during lockdowns.