FAO publishes information on how COVID-19 is affecting aquaculture food systems

By: Aquaculture Magazine Staff *

The COVID-19 pandemic has triggered a public health crisis followed by an on-going economic crisis due to the measures taken by countries to contain the rate of infection, such as home confinement, travel bands, and business closures, among others. Even though food retail businesses, like supermarkets, grocery and convenience stores, and takeaway restaurants are deemed essential and remain operational, the measures taken to contain the COVID-19 outbreak have created an environment in which food could become more difficult to obtain.

This pandemic, unprecedented in modern times, continues to cause major disruption in societies around the world and inflict severe damage to the global economy. Governments have introduced an array of measures intended to slow the spread of the virus, including social isolation directives, limitations on business opening hours, and travel restrictions. The seafood sector, along with the majority of industries, is having to deal with a bleak demand outlook as well as an array of supply challenges. With the effective shutdown of the restaurant industry, foodservice demand has evaporated, while retail sales have been marked by extreme volatility as periods of panic buying are followed by sustained lulls.

Other consequences of the virus outbreak include the cancellation of key seafood trade events across the world and a delay in aquaculture harvests due to labor shortages.

Demand for packaged and frozen products has spiked as households look to stock up on non-perishable food at the expense of fresh seafood options. At the same time, online distributors are reporting increased interest as home-bound consumers explore retail alternatives. Overall, however, demand has been sharply reduced and prices have fallen for many species, particularly those that are important for the restaurant industry. Meanwhile, suppliers and processors are struggling with business closures all along the supply chain as well as a number of other logistical difficulties. Haulers must contend with closed or restricted road borders and health inspection delays, while the large-scale cancellation of flights has directly affected trade in some high-end fresh products which are transported by air.

Other consequences of the virus outbreak include the cancellation of key seafood trade events across the world and a delay in aquaculture harvests due to labor shortages. Seafood representatives in many countries are calling for financial aid from the government, but such measures may only provide limited relief in the face of widespread upheaval. Industry stakeholders are also calling for regulator flexibility in terms of extending catch limits and raising biomass limits, and emphasizing the need to rapidly understand and plan for long-term changes in the market landscape. Uncertainty still dominates the outlook, particularly with regard to the duration and severity of the pandemic, but a prolonged market downturn can be expected even after current restrictions are lifted or relaxed.

In response, the Food and Agriculture Organization of the United Nations (FAO) has recently published a brief addressing the particulars on how the seafood industry and the fisheries and aquaculture production sectors are being affected by these changes and new challenges. Below we are including the specific information concerning the aquaculture sector, as well as the recommended measures to minimize the impact or cope with the current situation for the involved actors of the supply and value chains.

Protecting each stage of the aquaculture supply chain Although COVID-19 does not affect fish, the fish sector is still subject to indirect impacts of the pandemic through changing consumer demands, market access, or logistical problems related to transportation and border restrictions. This will, in turn, have a damaging effect on fish farmers’ livelihoods, as well as on food security and nutrition for populations that rely heavily on fish for animal protein and essential micronutrients.

At the same time, misleading perceptions in some countries have also led to a decreased consumption of seafood, resulting in a fall in the prices of fish products. This emphasizes the need for clear communications regarding how the virus is transmitted and that it is not related to seafood.

Measures to maintain operations include • Declaring aquaculture to be at par with agriculture for the purpose of priority sector lending, crop insurance, power tariff, and other levies. • Increasing access for fish farmers to credit and micro-finance programs with reduced interest rates, flexible loan repayment, and options for restructuring loans and related payment schedules. • Granting programs to cover production and income losses to maintain domestic seafood supply chains and to ensure continued operations. • Forgiving loans used to maintain payroll, and low-interest loans to refinance existing debts.

• Relieving payments, i.e. suspending certain financial obligations such as utilities, real estate tax, and mortgages. • Slowing down production where there is a drop in demand or reduced market access, especially if exports remain slow and farm labor has been lost.

Processors, markets, and trades are adapting to shift in demand Fish products are particularly reliant on the foodservice sectors, and thus are highly affected by changes in food services. As countries implement lockdown measures, restaurants, hotels, schools, universities and associated canteens close down, causing a drop in activity for many fish wholesalers and an absence of outlets for some high-value fresh fish species. Panic buying of food has reportedly benefited the sale of pre-packed, frozen, or canned fish products, but these may not be able to continue supplying the market if the war material is not available, and because of other logistical problems. In particular, as countries are closing down their borders, there may be delays at the border crossing and air flights may be canceled, which may affect the trade of goods, and the cost of transport could increase significantly. Restrictions on market access and a drop in demand will mean fish and fish products may be held in storage for longer. This has implications for food loss and waste due to quality changes as well as additional costs for processors, exporters, importers, and traders. At the same time, this unprecedented situation is generating promising innovative practices that could influence the way the sector works in the future.

Problems of working conditions along the value chain The wide informality in the sector constitutes an added barrier for fish farmers to access protection from labor market policies and contributory social protection mechanisms. These might exacerbate the secondary effects of COVID-19, including poverty and hunger.

As countries implement lockdown measures, restaurants, hotels, schools, universities and associated canteens close down, causing a drop in activity for many fish wholesalers and an absence of outlets for some high-value fresh fish species.

Measures to protect the most vulnerable include • Improving hygiene ad sanitation in the sector during the relief/recovery period. • Providing payroll and unemployment assistance for staff members of production facilities and self – employed, small-scale fish farmers. • Supporting the most vulnerable with cash and in-kind transfers by local institutions (where no national social protection schemes exist). • Adapting the program design (delivery schedule, level of benefits) and relaxing conditionalities (e.g. waivers on contributions) to ensure wider and adequate coverage of the aquaculture sector, including informal workers, where social assistance (cash and in-kind transfers) or social insurance programs exist. • Supporting inter-institutional coordination, through data information exchanges between authorities responsible for the sector development and governance to ensure the coverage of fish farmers y social development.

Management and policy implications The collapse of export markets has increased the possibility of re-sourcing fish from local producers. However, the national market of some nations is small or non-existent and the national fishing fleet may exceed the capacity for the national market, with several management implications. Measures include • Having governments carry out assessments and identify specific solutions in partnership with the actors from the sector.

This brief was developed by the Fisheries and Aquaculture Department of the Food and Agriculture Organization of the United Nations. The full version including also information and recommendations specifically for the fisheries sector is available online at: http://www.fao. org/3/ca8637en/ca8637en.pdf