HOW CAN BLOCKCHAIN HELP THE AGRI-FOOD MARKET DURING COVID-19 CRISIS?
Although COVID-19 causes so many uncertainties on the global food markets, but, from the global perspective, the agricultural commodity sector is proving to be more resilient to the pandemic than many other sectors, according to a new report released by the Food and Agriculture Organization of the United Nations (FAO). (Source)
One aspect of the effect of COVID-19 pandemic is movement restriction between borders all over the world which has already affected the entire food system. Restrictions on movement within and across countries can hinder food-related logistic services, disrupt the entire food supply chain, and affect the availability of food. Impacts on the movement of agricultural labour and on the supply of inputs will soon pose critical challenges to food production, thus jeopardizing food security for all people, and hit especially hard the people living in the poorest countries.
According to the most recent report released by the Food and Agriculture Organization of the United Nations (FAO) about the key trends and prospects for major food commodities in 2020/21 Covid-19 has a strong effect on the meat production: (Source)
- “World total meat production is forecast to fall by 1.7 percent in 2020, due to animal diseases, COVID-19-related market disruptions, and the lingering effects of droughts. […] International meat prices have fallen by 8.6 percent from January 2020, with the sharpest drop in ovine meat, followed by poultry, pig and bovine meats due to the impacts of COVID-19-related measures, including ensuing logistical bottlenecks, steep decline in global import demand, and substantial volumes of unsold meat products.“
- “The COVID-19 pandemic will continue to heavily affect seafood markets […]. On the supply side, fishing fleets are laying idle and aquaculture producers have drastically reduced stocking targets. […] The shrimp farming season in Asia, which generally begins in April, is now delayed until June/July. In India, for example, farmed shrimp production is expected to fall by 30-40 percent.”
To prevent the next food crisis in the coming year, the FAO chief has highlighted the need to accelerate the food systems transformation such as the development of digital tools in food supply chains, offering opportunities to facilitate trade in the face of the COVID-19 realities. (Source)
How can blockchain technology help?
Given recent events with COVID-19 changes to daily life, blockchain networks could potentially help to move goods faster because alternative suppliers could be identified and brought on board more quickly than today. With better insight into vendors and product inventory during a disruption, many buyers could identify where suppliers are sending products to relocate to new sources and redirect shipments where they are needed most.
Emerging technologies like blockchain provide a repeatable framework for end-to-end digital trade execution, digitizing the document and trade execution process. The trade can take just some days to settle, whereas traditional trading processes can take up to a month due to heavy paper-work and strong dependency on human resources.
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