Farmers Facing a New Kind of Crisis: How COVID-19 Has Broken Agricultural Value Chains

Eloy Castañón learned farming from his father as a young boy, and now he supports three children of his own with the profits from his melon farm in the northern Mexican state of Coahuila. But as the COVID-19 pandemic raced around the globe, and markets in Mexico were shuttered to prevent the disease’s spread, Eloy worried for his livelihood. “We thought the pandemic was going to affect us a lot,” he recalled.

Farmers in communities like Eloy’s are used to living through crises like droughts, pest infestations, and price downturns in boom-and-bust commodity cycles. But for smallholders across the world, the COVID-19 pandemic has brought about a new kind of crisis. The problems don’t lie in farmers’ fields or in demand from consumers, but rather in the links along the value chains that connect the two.

In recent months, TechnoServe has surveyed nearly 800 smallholders growing cash crops across 10 developing countries, from avocado farmers in Guatemala and cashew growers in Benin to turmeric producers in India. These conversations highlight the enormous challenges that farmers face in getting their crops to market, securing inputs, and weathering the various shocks to their income. The survey also highlighted the risk that these disruptions pose to the long-term financial health and food security of farming families.

However, not all of the findings are disheartening. The survey and on-the-ground results in countries around the world show that by providing support to businesses in agricultural value chains, adapting our training to the current crisis, and finding innovative ways to improve access to finance, we can help insulate smallholder farmers from the worst economic impacts of the pandemic.

Disruptions to agricultural value chains

The survey makes clear that this has been a difficult year for many farmers. In July, 54 percent of smallholders reported that they had lost income over the past month due to the pandemic, and even as restrictions eased in many countries, 40 percent of respondents reported losses in August. Among farmers who had tried to sell their crops in the past month, 65 percent and 53 percent reported challenges accessing markets in July and August, respectively.

It’s little surprise that these challenges are so common. With international trade delayed by border shutdowns, slowdowns, and disruptions, farmers who exported their crops have been left without markets. Social distancing has slowed the work of packing houses and food processors, depressing demand for farmers’ crops. Some wholesale and retail markets remained shuttered, and transport costs continue to be high.

At the same time that farmers have had trouble selling their crops, they’ve also seen other sources of income threatened: in July, one in five farmers reported having lost income due to disruptions to their non-agricultural work.

Impacts on farmer wellbeing and the global food supply

The impacts on farmer incomes also threaten to create deep and lasting impacts for rural families. While farmers have dipped into their savings to weather the crisis, they have a limited ability to continue to do so. Instead, farmers are taking other steps to make ends meet. For example, in August, 35 percent of respondents reported that they had reduced the number or size of meals served in their households, and one in seven reported having gone to bed hungry. In July, 70 percent of respondents said that they had difficulty feeding themselves or their family members.

It’s important to note that these impacts are not distributed equally. Women farmers were consistently more likely to report negative impacts than their men counterparts, likely reflecting women’s lower rates of asset ownership and savings and smaller networks, as well as inequalities in household decision-making.

The impacts of the crisis are likely to linger even after value chains are restored. Nearly 40 percent of farmers responded in July that the pandemic had impacted their ability to invest in their farms, jeopardizing future harvests and making farming households more vulnerable to the impacts of climate change, crop disease, and other shocks.

Addressing the crisis

To forestall those lasting, devastating impacts, we must act quickly to provide farmers with the support they need. In our programs across Latin America, Africa, and India, we’ve seen several approaches that work:

1. Provide support to the intermediaries in the value chain that are critical for farmers’ success. Technical assistance can help packing facilities develop staffing strategies to maintain production while observing social distancing; aid cooperatives in the proper storage of crops, so that they can sell them when the disruptions have eased; and provide input suppliers with ideas for reaching their customers amid the pandemic.
2. Tailor farmer support to address the most pressing needs. Harnessing digital tools like WhatsApp, Skype, and SMS messages, our programs have emphasized solutions to the biggest challenges caused by COVID-19, often involving market access. Our farmer trainers have helped link producers with buyers, and shared training on quality control to meet the needs of these new buyers. It’s also important to continue sharing messages about the importance of protecting women’s economic inclusion and assets.
3. Find creative, sustainable solutions for helping farmers access the resources they need to weather the crisis. This could take the form of price floors negotiated with buyers; emergency grants; or improved access to financing.

Facilitating farmers’ links to markets has shown to be an effective tool: in August, respondents in our survey were far less likely to report having lost income in value chains in which TechnoServe provides training and/or facilitates market connections (17 percent among those who had lost incomes) than they were in other value chains (32 percent). By strengthening value chains—and farmers’ roles within them—we have been able to protect smallholders from many of the worst economic effects of the crisis.

That’s what has happened to Eloy. As a participant in the Inclusive Agriculture Program, a collaboration between the Walmart Mexico Foundation and TechnoServe, he received agronomy training to improve the quality of his crop and business skills training to help market the crops. When the pandemic closed some sales channels, the program helped farmers like Eloy identify new buyers in formal channels. As a result, farmers in the program are receiving a price 60 percent higher than the local going rate. “We never imagined that we were going to be the ones to generate work and stability for the community,” said Eloy.

But there are millions of other farmers facing the challenges that Eloy did. We must work together--across the private sector, civil society, and government--to provide the training, connections, and resources farmers need to connect to markets; strengthen the other key participants in these value chains; and build the resilience of our food systems.