Asean’s food security at stake if supply chain disruptions persist


ASEAN’S food security could well be jeopardised if governments do not protect the broader supply chain accordingly, warned a PricewaterhouseCoopers (PwC) report.

To ensure the food security of Asean communities, the report commissioned by Food Industry Asia (FIA) suggested that collaborative and concerted efforts are required between the food industry and governments to keep supply chains open and minimise disruption of food manufacturing and distribution.

“With the region already facing food security challenges due to rapid urbanisation and the growth of consuming classes, Covid-19 will likely exacerbate the region’s food security challenges in the short term.

“Therefore, the report recommends that food and its broader supply chain are recognised as essential, the protection of the food industry labour force, borders remain open and that financial assistance is provided to the most vulnerable businesses and consumers, to minimise the impact of Covid-19 on food security in the Asean region,” it said.

This comes as countries worldwide have instituted varying degrees of lockdowns, border restrictions and travel bans to curb the spread of the deadly virus.

As a result, economic activities have slowed or even grounded to a halt, threatening global growth.

“During a lockdown, if governments across the region put in place policies that hinder production across the supply chains as well as trade barriers, this could lead to the regional food shortages, especially when looking across the world and seeing the continued but unnecessary panic buying behaviour of people in these situations,” FIA ED Matt Kovac said in a statement.

According to the report, the food value chain contributes around US$500 billion (RM2.15 trillion) of economic output to the region, which is around 17% of Asean’s total GDP.

“Additionally, the industry accounts for around 113 million jobs in Asean or 34% of the total labour force,” it added.

Labour shortages, shortages of inputs or raw materials and border challenges can have a short-term impact on the food supply chains. “Our discussions with major global food companies suggest that labour restrictions and supply disruption for inputs are the key challenges that the sector is currently facing in Asean,” PwC Singapore Asia-Pacific deals strategy and operations leader Richard Skinner said.

Supply chains remain open and supermarket shelves are generally well-stocked, suggesting that many of the measures put in place by governments and businesses are working well so far.

“Nevertheless, as the situation develops, it will be necessary for stakeholders to broaden and strengthen mitigations, to ensure the region’s food system continues to function effectively,” Skinner stated.

So far, the supply of good quality food is still intact, attributed to authorities and businesses’ efforts in supporting their respective communities.

Protection of labour supply, financial assistance for small businesses, targeted measures for smallholders, preservation of open borders for goods and social support for consumers are among the measures suggested by PwC to protect the supply chain.

At the same time, workforce protection, customer and supplier outreach, inventory management and production flexibility are recommended as mitigation steps food businesses could take to minimise the impact food supply chain issues could have on food security.

The deadly Covid-19 virus has infected almost 1.5 million people and killed more than 88,000 people across the globe to date.

In the Asean region, Indonesia has the highest death toll with 240 deaths (as at press time) and 2,956 positive cases.