Impacts of COVID-19 on SMEs in the food system

* Originally published by the SUN Business Network

The SUN Business Network (co-convened by GAIN and WFP), undertook a survey of food system SMEs in 17 SUN Countries in early May 2020, aiming to assess the impacts of the COVID-19 pandemic and associated control measures on their businesses and to identify their support needs.

363 responses were received, with most being from micro- or small-sized firms, primarily in the processing and distribution sectors, as well as grains, vegetables, and fruit value chains. The survey results revealed that:

• 94% reported being impacted by the pandemic, mainly via decreased sales (82%), difficulty accessing inputs (49%), and difficulty paying staff (44%).
• 84% of firms reported changing their production volume as a result of the pandemic, generally decreasing it; 57% had changed their product’s sales price.
• 85% of respondents anticipated future impacts on their supply chains, including shortages of supplies (61%) and transportation and distribution disruptions (49%).
• 80% and 84% of firms reported taking actions to mitigate the impact of the pandemic on their business and to protect their employees, respectively.
• 81% and 64% of firms reported urgently needing financial and technical support, respectively, to cope with the effects of the pandemic.

See the full survey results here.

Based on these results, it is clear that, now more than ever, governments, donors, investors, multinational companies, and nutrition partners in UN agencies and civil society need to reach out to support the SME sector. SMEs are a critical line of defence in ensuring low-income consumers can access safe and nutritious foods during the COVID-19 pandemic.

“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 put businesses, jobs, and access to healthy diets at risk – in communities already facing the challenge of malnutrition. The SUN Business Network calls on partners to assist us in providing access to finance and technical assistance to keep nutritious foods 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”, Jonathan Tench, Global Coordinator, SUN Business Network.

Our #SME survey results on COVID19 impact – 363 SMEs, 17 Countries – fruit and vegetable supply chains most at risk. We’re looking for finance+technical support to keep our businesses afloat and bounce back. Let us know if you can help. @SUN_Movement https://t.co/esxr7Jl5B0

— Jonathan Tench (@jonnytench) May 21, 2020