THE entire world is still in the battle against common enemy – COVID – 19. Even the few countries that have not reported any cases are reeling from the pandemic because the current global economy is so interconnected that one’s demise becomes global.
No records of the similar incidence to have occurred on earth – not in the recent epochs. This plague, as it is a norm during emergency, has made consumers selective of products, from essential to non – essential ones.
As such, those who are in the non – essential food industry have already started facing the scourge of Corona.
According to FAO Food Price Index, the global food prices has declined by 4.3 per cent in the past month of March – the lowest since 2015.
Bloomberg reports that the biggest losers in this category are sugar and vegetable oils. Major reason being the plunge in crude oil, which has also been affected by cancellation of flights by major airline companies.
Relationship between sugar, corn and vegetable oils and airline companies comes from the fact that, they are useful in production biofuels.
So that’s on the consumption side, a point which pulls the whole value chain. A prolific Economist and unorthodox thinker of a South Korean decent, Professor Ha Joon – Chang’s did a research on a number of value chains in the world, and came up with a rather commendable revelation that, the farmers that produces cotton earns only 1.9 per cent of the international market price, leaving the rest – 98 per cent – in the hands of cloth weavers and fashion designers.
Simply put, in the country like Tanzania, whose 65 per cent of 55 million people are primary producers in the agriculture sector, earns a peanut in the global supply chain.
To understand it better, a trouser made in Turkey with cotton produced by famers in Mwanza, sold at a price of 30,000/- , leaves a Tanzanian farmer with 570 shillings only.
It couldn’t be more meager. It is now more than clear that a farmer is a daily loser in our business duel. In a usual respect, this calls for a more specific and concerned intervention especially in times such as these. If this outbreak persists, farmers are going to lose much.
For those in the tea and coffee industry are expected to experience a 14 per cent slash in their price in few days to come. Situation may get worse as the days count on.
To keep the economic ball rolling, some actions must be assumed at this juncture. And one item can be subsidies in all the value chains, most especially those which are closely connected to global supply chain.
This will be a humanitarian gesture as well as relief package that aims at preventing the sector from total collapse as it keep on survival as we struggle to return the situation into sanity.
This subsidy will help cushioning them from global price slump and make them feel little pressure to abandon the practice altogether.
Furthermore, these farmers takes the larger component of our population, one they are liquid enough, it is natural that their spending capacity will increase which will help pepping up our economy as they will spend on products sold in the country. But that’s just one side of the coin.
The subsidy can be in the form of a stimulus package, if properly utilized it will be the greatest investment in agriculture the country has ever made.
This is the reason behind; COVID – 19 has brought about restriction and liberalization in the world at the same time. Both might have tremendous effects if we will be prepared.
Countries like Vietnam and Philippines have banned exportation of rice as of 30th March 2020. Switzerland have liberalized import quotas on butter and eggs on 1st April 2020.
One thing you will realize from this is that they are all trying to ensure food security in their borders – they smell the shortage of it.
No wonder price of rice, a staple for millions of people in Asia, has risen for the past three months. All these products have been produced in Tanzania for ages now, but our supply chains been ending on the Eastern Africa region only.
If we will make our farmers produce much, and Ministry of Trade in collaboration with Foreign Affairs actively enters bilateral agreements to supply those crops to the particular countries, it will be a superb thing our country could do to cease the moment.
Whichever way we will take, our farmers have families to feed and community responsibilities to cater for, they are too valuable to be redundant at this time, above all, they are the potent force of economy our country can bet on.
It is high time that Government of Tanzania and allied partners plan to rescue the situation and see beyond bleak colours before it is too late.