Singapore has excellent logistics, infrastructure and a trade eco-system, but we cannot assume there would no disruptions to our food supplies, says Paul Teng.
Paul Teng Channel NewsAsia 23 Dec 18;
SINGAPORE: The shortages of eggs, some types of wild fish, and shrimps from Malaysia that may lead to export curbs and price increases may be a forerunner of things to come.
This is illustrative of the increasing link between food exporting countries and importing ones, especially in Southeast Asian since the ASEAN Economic Community (AEC) came into force in December 2015 which advocates an integrated market for ASEAN, though countries have long been cognisant of such dependencies.
With greater economic integration comes higher regional interdependence. Closer linkages are desired as the expansion of business opportunities aid countries, particularly lower-income ASEAN member states, to grow their economies. But it also means that situations resulting in domestic policy changes in one country can affect others.
This is not the first time an export curb on a critical food item in one country has generated repercussions in others. The great food crisis of 2007 to 2008 when poor harvests in Ukraine and Kazakhstan led to export curbs on wheat and precipitated global supply shortages and price hikes. Other staples like rice in particular were affected, after Vietnam and India halted rice exports.
The food shortfalls and consequent price spikes affected over 30 countries worldwide, with some fueling political unrest and food riots.
While Singapore authorities have noted that the seafood curb in Malaysia would not have significant impact here and assured Singaporeans that we have “alternative sources” for eggs, we can’t deny that such an issue could have had massive ramifications.
DISRUPTION TO FOOD SUPPLIES IS CAUSED BY MANY FACTORS
Disruptions to food supplies can have many causes; such is our vulnerability as a net food importing nation. In the current case of Malaysian eggs, bird flu has been speculated to be the key culprit but many think there are other likely reasons.
Supply shortages in wild-caught fish at year-end and year-beginning are not uncommon in this part of the world due to the Northeast monsoon hampering fishing boats going out to sea and reducing catches.
Upcoming festivities have also been blamed for the seafood curb from across the causeway. As demand will rise during that season, it is not surprising the Malaysian Minister-in-charge would choose to impose restrictions.
Climate change, severe weather and other outbreaks of plant or animal diseases also threaten food supplies. In today’s world where a country’s food security is almost inextricably linked to the surrounding region and beyond, any disruption in an exporting country’s agriculture and production will have effects on pricing.
Asia annually imports almost three-quarters of the world’s surplus soybeans and about a quarter of the maize, for food and animal feed.
So weather events that reduce crop yields in North or South America, where most of the soybeans and corns are imported from, will result in more expensive animal feed. Since animal feed is a major cost item in growing hogs, chicken and fish, the increased prices will then be passed on to consumers.
Disruption also occurs when countries with large populations chase after the same limited supply of key food items as smaller countries. Food items like rice have a very “thin” margin of its production, about 7 to 10 per cent, available for trade. Meaning, in most rice-growing countries, nearly all the available rice is for domestic consumption.
So there is competition between importing countries to purchase rice from the same set of exporting countries, commonly Thailand, Vietnam and India.
SINGAPORE’S FOOD SECURITY
The Economist Intelligence unit (EIU) ranked Singapore as the most food secure country in the world. The ranking, mainly based on high affordability of food in Singapore, reflects the finding that the average household in Singapore spends less than 10 per cent of its income on food, 20 to 40 per cent less than some of its neighbours.
So most Singaporean households can still afford to buy food even if prices were to go up. Also, as long as there are no disruptions in the supply chains, food is readily available due to our excellent infrastructure and logistics. We also have one of the highest food safety standards in the world.
However, this does not mean that Singapore is not vulnerable. Singapore relies heavily on imported food. About 90 per cent of its food needs come from over 160 countries, spread geographically, according to Agri-Food and Veterinary Authority of Singapore (AVA).
Singapore is very vulnerable to the supply shocks that may occur in our source countries for key food items especially rice and fresh leafy vegetables or chilled fish, that come only from a small number of countries.
Most of Singapore’s (and the world’s) rice originate from Thailand and Vietnam and to a lesser extent, India. Most of the green leafy vegetables and chilled fish come from Malaysia with smaller amounts from other ASEAN countries.
Singapore is particularly vulnerable if these supply shocks occur simultaneously, a scenario we cannot rule out.
Another aspect of Singapore’s vulnerability is related to the link between food security and an important engine for economic growth – tourism. The reputational risk to Singapore as a tourism and MICE (Meetings, Incentives, Conferences and Exhibitions) hub cannot be underestimated if food supply is erratic.
SELECTIVELY AIMING FOR HIGHER LEVELS OF SELF-SUFFICIENCY
Singapore as a small island state will never be able to produce all the diverse food items that its multi-ethnic population needs, nor does it want to. It does not make economic or practical sense to want to do so.
We can’t be completely self-sufficient, but as a policy imperative, we can aim for certain higher levels of self-sufficiency by using new technologies which optimise use of scarce production resources (like land, water and labour).
For a small land-limited country, we need to re-conceptualise farming space including leveraging vertical farming, above-ground farming (as is already happening in plant factories) or underground farming. We must shift towards high-output, high-productivity, technology-enabled farms as is the case for some Asian cities.
Concurrently, we should mobilise more community effort in growing selected vegetables, especially indigenous vegetables, in under-utilised urban space.
Singapore would not likely grow “extensive crops” like rice or wheat that require large land tracts of land per unit. So it behooves us to find arrangements that can secure our supplies of items like rice and wheat, and nail down more “food hinterlands” as we are already doing with eggs, leafy vegetables and fish.
The success of such an import diversification or “resilience” approach depends on alternate sources which can meet the increased demand at a moment’s notice, but there may be a time lag in alternate sources ramping up production, unless they are already producing surplus over their own needs.
What Singapore or any importing country does not want is to be accused of being responsible for an exporting country’s domestic shortages or price increases because of our increased imports.
STEPPING UP FOOD SECURITY
For the mid to long term, fortunately, Singapore’s ability to afford food even at higher prices enables us to compete successfully for most items as the amounts we need are small compared to other countries.
Our excellent logistics, infrastructure and trade ecosystem, all favour us. But, we cannot assume that there will not be simultaneous occurrence of disruptions. Unexpected severe weather or political conflict may disrupt our food supplies.
Singaporeans are not in danger of going hungry in the immediate future as our society also has some internal resilience, such as with diet substitution. If less rice is available, many will eat more noodles or bread or other wheat products, and even potatoes or other root crops.
However, as national food security increasingly is linked to regional and global food security, our open economy means that we will be influenced by what happens in other countries, especially those that export to us and those that directly compete with us for the same food sources.
Ultimately, as a small country with limited food production capacity, we need to ensure our food security strategy is a multi-prong one that includes imports, self-production, stockpiles, overseas farming and government-to-government agreements, augmented by a strong effort to reduce food waste.
Paul Teng is Adjunct Senior Fellow (Food Security) in the S Rajaratnam School of International Studies, Nanyang Technological University in Singapore and concurrently Honorary Senior Fellow, Southeast Asian Regional Centre for Graduate Study and Research in Agriculture (SEARCA/SEAMEO) in the Philippines.
He previously held leadership positions at the Worldfish Centre and the International Rice Research Institute, two international organisations located in Southeast Asia under the auspices of the Consultative Group on International Agricultural Research.
Source: CNA/(sl)
