By Salim Ghazaly, Roger Rabbat, and Ahmed Mokhtar
The COVID-19 outbreak has disrupted food supplies around the world. It threatens the 822 million people, one in every nine of the world’s population, that suffer from chronic undernourishment. It is also a danger to the more than 113 million that need lifesaving food assistance. Governments in the GCC have launched immediate interventions to preserve food security. In the longer term, governments will need to take comprehensive steps to generate sustainable results. That includes helping increase the productivity of local farmers, facilitating imports, reinforcing supply chains, and, for some countries, potentially creating a transitional public entity to handle food security.
Compared to other states, GCC countries are considered among the more food-secure per the Global Food Security Index, which considers the availability, affordability, quality, and safety of food supplies. However, the region lacks control over its food sources and remains highly import-dependent. GCC countries import about 85% of their food, with rice imports comprising virtually all consumption, around 93% of cereals, and approximately 62% of meat and 56% of vegetables. During a disruption in supply chains, such as a pandemic, that reliance on imports leaves countries vulnerable to shortages.
In an effort to minimize disruptions to local supply chains and food imports, GCC governments have launched immediate intervention measures. These include financial exemptions and credits to farmers and agri-businesses, mobility exceptions during lockdown for agricultural workers, along with packaging and distribution support. Those steps have preserved short-term food security. The GCC has avoided some of the more extreme situations that other parts of the world faced. For example, countries such as Indonesia and the Philippines were forced to place restrictions on food purchases to curb hoarding and panic-buying.
“GCC countries import about 85% of their food, with rice imports comprising virtually all consumption, around 93% of cereals, and approximately 62% of meat and 56% of vegetables.”
However, GCC governments need to complement their immediate interventions with sustainable measures aimed at restructuring food supply chains and safeguarding food imports against potential future shocks.
First, governments need to increase the local food supply. Implementing leading agricultural practices already in use elsewhere can make farmers as productive as possible. Such practices include genetically modified crops, desert agriculture, seawater farming, growing crops in vertical stacks, urban farming, and precision agriculture which uses data and technology to increase yields. Similarly, reinforcing supply chains throughout the region can make food supplies more resilient and prepare the region for future disruptions. For example, GCC governments can help producers and consumers transition to online platforms and e-markets. By aggregating information and increasing its visibility among all participants, these digital tools help manage supply-chain risks, identify weak points in the value chain, and minimize food waste. Although this may require less labor, the transition to online platforms will boost productivity rates and build resilience against future shocks.
Second, governments need to ensure the stability of imports. Governments can introduce new import channels to bring critical resources into the agricultural value chain. They can also streamline border-control procedures to get goods into the region faster. For example, governments can minimize border and customs checks for agricultural freight, and can adopt e-certificates for imported food, rather than requiring physical documentation.
“GCC governments can help producers and consumers transition to online platforms and e-markets.”
In addition, for countries that do not have a mature private sector in the food industry, governments can make faster progress in both of these areas by creating a transitional public entity. This should be a government-run company that secures stable supplies of key commodities until the private-sector is mature enough to take over. Countries in other parts of the world have applied this approach, such as India, Indonesia, Mexico, South Korea, and Tunisia.
Transitional public entities have a mandate that changes over time, based on the needs of the individual country. In the short term, this entity could be tasked with identifying and filling private sector shortfalls, and building government capabilities to ensure food security.
In the medium term, the entity could encourage farmers to take advantage of innovative technologies to increase domestic production, such as hydroponics, desert agriculture, and seawater farming. It could also help develop private-sector import capabilities and connect companies to strategic trade partners.
In the long term, once the private sector is mature enough to ensure a sufficient supply of strategic food commodities, the entity could wind down and the government would revert to an oversight and regulatory role.
The immediate interventions taken by GCC governments to stabilize food supplies were critical in overcoming the disruptions due to COVID-19, but they are only a first step. Over the longer term, governments need to build up local food supplies, reinforce supply chains, and increase the flow of imports, potentially by using a transitional entity to ensure stable supplies until the private sector is mature enough. Future disruptions to food supplies are virtually certain. By taking the right steps today, governments can ensure that they are prepared.
This article originally appeared in Gulf Business, August 2020.