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By Dr Michiel van Lookeren Campagne, Director CSIRO Agriculture and Food Dr Michiel van Lookeren Campagne, Director CSIRO Agriculture and Food 10 June 2020 3 min read

From exporting our goods, to importing products such as fertiliser, supply chains have seen significant disruption.

In the United States, coronavirus outbreaks in meat processing facilities forced many to close, crippling the country’s meat supply chain. The US meat processing sector is highly concentrated with just two main companies controlling nearly 80 per cent of the market in beef. The vulnerability of such an arrangement come to the fore in this pandemic, with many farmers having to slaughter and destroy stock they can’t sell.

In Australia, our agricultural supply chains have had two big hits this year: the summer bushfires that damaged close to a million hectares of agricultural land and COVID-19. We were able to cope well with the first shock, with experience gained through floods and drought in mustering food supplies and mobilising emergency responses. Coping with the second shock has been more difficult. We have rarely seen anything like it; perhaps the last time was World War II.

Preventing downstream impacts

The COVID-19 pandemic is a truly global shock that has not only disrupted the production side of food systems but also demand and supply systems across multiple food products. It has exposed the vulnerability of our supply chains and the fragility of countries and commodities heavily dependent on global trade. The indirect effects via reduced fruit picking (60 per cent backpacker) labour, freight shutdown and closure of the hospitality industry have been the most significant.

The question is what happens after COVID-19 restrictions are lifted? Predictions tell us we need to prepare for bumpier times ahead and more frequent shocks to our food systems.

Climate change will increase the frequency of droughts, cyclones, fires and floods, disrupting both food production and distribution. When Cyclone Larry decimated the region suppling 95 per cent of bananas in 2006, $300M in fruit was destroyed and 4,000 people lost jobs. It was a tough lesson in diversification of production region but now 22 per cent of bananas are grown elsewhere.

Investing now in future resilience is difficult when many companies are struggling to just stay afloat. But the adaptability of Australian businesses through this pandemic is providing hope that things can be done differently.

For Werribee’s Mainstream AquaCulture, which operates the world’s largest Barramundi hatchery, this has meant pivoting to supply directly to the public.

In the food manufacturing sector, the closure of ports and grounding of air freight has forced many companies to find alternative sources for raw materials and packaging (a large portion comes from China) and look to alternative channels for export.

The government too has stepped in, with its $110 million International Freight Assistance Mechanism to enable exporters of high value produce to continue selling into key overseas markets. Return flights are bringing back vital medical supplies, medicines and equipment. Currently, premium food exports are on the rise as the middle class of Asia is stuck at home, ordering online and expanding their culinary skills.

A global pandemic is just one threat to supply chains. Floods, cyclones and bushfires are among the more common threats.

Changing supply chain thinking

Shifts such as those listed above are helping businesses stay open. Future resilience of individual operations and chains will be tested by their ability to recover from multiple disruptions and whether they have enough of a buffer to rebuild. There are only so many consecutive cyclones that a banana farmer can experience before they decide to leave farming altogether.

Similarly, there are only a certain number of hits across the chain that businesses can take before they break, whether that’s the loss of a market due to restaurant closures, credit lines running dry, a spouse losing their job, or still recovering from fires or drought.

The opportunity the current crisis provides is to muster a collaborative effort across public and private partners using a whole of systems approach to build more robust, flexible and sustainable food systems.

Enabled by data analytics, we can provide real-time visibility across complex and interdependent supply chains to manage distribution networks, to prioritise production schedules, to connect new types of customers.

When combined with sustainability and quality metrics, new and more value can be created supporting the government’s goal of growing agricultural output to $100 billion in a sustainable way. Let’s turn this crisis into an opportunity for Australia and its trading partners.

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