There are countless ways in which the global food system will be tested and strained in the coming weeks and months. Most current assessments generally foresee a contraction in both supply of and demand for agricultural products, and point to possible disruptions in trade and logistics. Vulnerable groups include small-scale farmers, who may be prevented from working their land, accessing markets to sell their products or buying seeds and other essential inputs
According to FAO, one of the consequences of the pandemic will be lower supplies of intermediate inputs such as fertilizer, pesticides, and seeds, that will likely reduce yields later in the year. In Mexico, small scale farmers are highly dependent on these inputs. This high dependence on commercial pesticides and fertilizers and the pressure arising from their scarcity could be lowered when adopting environmentally friendly options such as biological pest control and the use of natural fertilizers. The promotion of community seed banks would not only lower farmer dependency on commercial seeds, but also promote the use of local seeds that are better adapted to changing climate patterns.
On the other hand, precision agriculture could provide cost reduction for farmers struggling to make end meet and facing illness or quarantine restrictions. Mexican farmers are highly dependent on labor inputs and are particularly exposed to COVID-19.
The pandemic will affect all elements of the food system, from primary supply, to processing, to trade as well as national and international logistics systems, to intermediate and final demand. In Mexico, productive chains are highly dependent on independent intermediaries. Well integrated and coordinated value chains with close involvement from all productive chain links and focus on local markets, will ensure a more stable process for all stakeholders.
Farmers in Latin America not only produce with high debt shares, but their interest rates are significantly higher than in high-income countries. They are, therefore, more exposed to a possible shock in the cost of capital, potentially arising from changes in interest rates. Financial mechanisms specifically designed for small-scale farmers could help alleviate this situation.