Rethinking Agri-Business Investments Through the Pandemic wrap-up take-aways

“Rethinking Agri-Business Investments Through the Pandemic”, a series of virtual convenings unpacking the response to COVID-19 for investors and SMEs in emerging markets, has come to an end. Over 4 weeks, 19 investors, lead firms and researchers spoke about how they were adapting, issues with managing food safety and land degradation. And of course, how to build better and plan for recovery. Here are five take-aways from the series:

1. COVID-19 has increased the speed of digitalisation in value chains

Digitalised value chains and smallholders have demonstrated greater resilience than non-digitalised ones to cope with the pandemic.  New digital business models have created solutions to marketing and logistical constraints in the agricultural value chain arising from the lockdown. These factors have accelerated the speed and scale of deployment of tech-based solutions, presenting opportunities for investments in these services and in agribusinesses benefiting from digital solutions.

2. The new norm will still require working capital and collaboration

To reduce the impact and speed of recovery of agribusinesses, investors need to ensure that SMEs have enough working capital throughout the pandemic. Now, more than ever it is critical to seek- or secure – partnerships between food chain SMEs, finance service providers and investment support stakeholders to de-risk lending to SMEs.

3. Market diversification will increase resilience and reduce investment risks

National, regional and international markets have been affected in different ways by the pandemic, highlighting the complementarity of these markets in a resilient and sustainable food chain. Risk management, cost reduction and sustainability for the agricultural sector as a whole will depend on market diversification during the new norm and after the pandemic is over.

4. The pandemic has accelerated the speed of change in air freight trends and consumer demand for food standards

COVID-19 has become a catalyst to advance the climate agenda in food systems. As the airline industry emerges from the crisis, and with a growing call to ‘build back better’ in a way that responds to climate change, we can expect a move away from air transportation of fresh products. At the same time, increased awareness of health issues is driving consumers to put food safety standards higher up their list of priorities. Traceability and national value chains will become ever more critical.

5. Storage and processing help agribusinesses cope with the impact and manage risks

Storage and processing facilities close to the growers provide options for farmers when their usual markets are not available, as well as enabling farmers to access premium prices. These facilities will be an important part of coping with the ongoing disruption in supply chains caused by the pandemic. Investment in these kinds of support infrastructure will offer financial returns in the medium term.

Watch a short video capturing highlights of the panels below.