COVID-19 and SMEs: supporting small enterprises to avoid a nutrition crisis

* Originally published by the SUN Business Network

Today, 2 billion people suffer from an inadequate diet, and the emergence of COVID-19 is only expected to accelerate the number of malnourished and hungry people worldwide. Preliminary assessments suggest that the COVID-19 pandemic may add between 83 and 132 million people to the total number of undernourished in the world in 2020. Small and medium enterprises (SMEs) are on the frontline of tackling malnutrition and, in Africa, provide 70% of the food that reaches low-income consumers. SME’s proximity to local communities means they are well placed to shape their businesses in response to new challenges and consumer demands, and can adapt delivery models as required, especially around last-mile distribution. However, the pandemic is putting a strain on SMEs’ operations with national lockdowns driving up food production and distribution costs, which is likely to result in price shocks, unemployment, bankruptcies and potential food shortages.

Surveying SME needs

To improve the consumption of nutritious and safe food in emerging markets, the Scaling up Nutrition (SUN) Business Network (SBN) mobilises businesses to invest in sustainable food system innovations. Co-convened by the Global Alliance for Improved Nutrition (GAIN) and the UN World Food Programme (WFP), SBN works in 17 SUN countries across Africa, Asia and Latin America to broker partnerships and collaborations between businesses and nutrition actors to build the business case for investment in nutrition.

Recognising the unprecedented impact of COVID-19 on food systems, in May 2020, SBN undertook a survey, which aimed to assess the impacts of COVID-19, the associated control measures on SMEs, and to identify SME support needs across the 17 SUN countries. Responses were received from 363 enterprises, primarily in the processing and distribution sectors, as well as the fruit, grains and vegetable value chains. Key findings indicated that: 94% of SMEs have been impacted by the pandemic, mainly via decreased sales (82%), difficulty accessing inputs (49%), and difficulty paying staff (44%); 85% of respondents anticipated future impacts on their supply chains, including shortages of supplies (61%) and transportation and distribution disruptions (49%); and 81% and 64% of SMEs reported urgently needing financial and technical support, respectively, to cope with the pandemic’s effects.

“Our survey reveals the devastating extent of the pandemic so far on the SME sector, especially for businesses involved in fruit, vegetable, grain, and fish value chains. Decreased sales, difficulty accessing inputs, and reduced production has put businesses, jobs, and access to healthy diets at risk in communities already facing the challenge of malnutrition,” explains Jonathan Tench, SBN Global Coordinator.

The startling survey figures also demonstrate the critical need for SME support to keep local food systems moving, and to ensure the adequate supply of safe and nutritious foods – particularly in low- and middle-income countries (LMICs). “SBN calls on partners to assist us in providing access to finance and technical assistance to keep nutritious food-producing SMEs afloat – and help them build stronger, more resilient businesses with an even greater impact on nutrition, so that they can bounce back from this crisis,” Tench continues.

See survey results for:

• Bangladesh
• Indonesia
• Kenya
• Nigeria
• Rwanda
• Sri Lanka

Read the full article in the SUN Business Network website

#COVID19 is expected to accelerate the number of malnourished and hungry people worldwide. #SMEs are on the frontline of tackling #malnutrition yet are facing unprecedented challenges to their business operations.

Read more on how SMEs are being impacted: https://t.co/4vK34zseSZ pic.twitter.com/gqLrxOdzSm

— SUN Business Network (@SUNBizNet) September 18, 2020