The global food supply chain is at risk, and it’s not just from the obvious forces like drought, floods, and hurricanes. Supply chains are also at risk because of the growing number of cyber threats, changing regulations around the world, breakdowns in international relations, trade restrictions and tariffs and pressure on sustainability. These issues mean that there are a lot of opportunities for companies that understand these new dynamics and can position themselves to take advantage. In fact, a recent report calls the global food supply chain the weakest link in any nation’s ability to withstand an impending natural disaster or other disruptive event.
Why is it Vulnerable?
The global food supply chain is vulnerable because it’s become increasingly complex and disconnected. There are three main reasons for this. First, the growing distance between producers and customers means that food is increasingly being transported long distances. This creates a number of risks. For example, the possibility of contamination increases when food is in transit. And the farther the food travels, the more likely it is that it will be caught up in a disruption, like a natural disaster or a labour strike. Second, the globalization of the supply chain has created complexity as national and regional standards and regulations result in bureaucratic intricacies. Thirdly, the growing number of middlemen and intermediaries create more third-party risk and potential for failures.
Food Safety and Quality
The global food supply chain has a loss of confidence in the food safety and quality, and the supply chain is responding. Companies are working to develop new techniques and technologies to improve food traceability and transparency. This has become a major focus as confidence in food safety has decreased since the 2016 discovery of Chinese adulterated Chinese pork that was highly toxic, mislabelled and potentially contaminated with dangerous bacteria.
Changing of Food Regulations Globally
The global food supply chain has seen many changes in food regulations. In some countries, there’s been a shift toward tightening regulations, while in other regions there’s been an easing of rules. This has led to greater complexity in the global food supply chain. For example, while the European Union and the United States have continued to tighten standards, China has eased regulations, which has resulted in a shift in trade and placed new pressures on the global food supply chain.
Climate Change, Rising Sea Levels, and Extreme Weather Events
The global food supply chain is vulnerable to climate change and extreme weather events. These phenomena are expected to cause more extreme weather and rising sea levels that could disrupt the food supply chain and other systems critical to the world’s economy. In some areas, like the American Midwest and parts of China, there’s been a decrease in precipitation and a decline in soil moisture, which has increased the risk of drought. At the same time, other regions, like Pakistan, the Caribbean, and the Pacific Northwest have seen an increase in precipitation. Both rising sea levels and more intense storms will have a significant impact on the global food supply chain in the longer term.
The global food supply chain is at risk, and it’s not just from the obvious forces like drought, floods, and hurricanes. Supply chains are also at risk because of the growing number of cyber threats, changing regulations around the world, geopolitical tensions, war, trade restrictions, tariffs and pressure on sustainability. The global food supply chain is the weakest link in any nation’s ability to withstand a significant disruptive event. As households rarely hold meaningful emergency food supplies, so short term disruption could result in millions of people facing the threat of starvation.