3 Key Ingredients Needed to Ensure Food Stability in Asia

This Finger on the Pulse article dives into three key factors that need to be prioritised in order to strengthen food supply chains in Asia. Finger on the Pulse is a content series from Infrastructure Asia that offers insider insights on key developments and trends shaping Asia's infrastructure landscape. This edition features insights from a roundtable discussion between food supply chain experts at the Asia Infrastructure Forum (AIF) 2024.

Humanity faces a dual imperative: securing a sustainable food supply for an ever-expanding population and mitigating the adverse effects of climate change. Addressing this requires long-term planning and coordinated efforts to build a food system that is both sustainable and resilient.

The anticipated swell in global population to 9.7 billion by 2050 requires a substantial escalation in food production — an increase of around 60% more than current levels. Asia, despite making notable advances in food security, now confronts an overall year-on-year decline in the resilience of its food systems, as reported by the Economist Impact’s 2022 Global Food Security Index (GFSI). This vulnerability is fuelled by a confluence of geopolitical unrest, economic volatility, and the escalating repercussions of climate change.

Without a significant boost in food output to match rising demand, the spectre of food insecurity looms large over Asia. In today’s globalised world where food supply chains are so deeply interwoven, regional collaboration holds the key for the livelihoods and sustenance of countless individuals.

Here are three factors which food supply chains need to build upon to ensure long-term food security and resilience across Asia.

1. Strengthening Cold-Chain Infrastructure to Reduce Food Waste and Spoilage

Being under constant heat and humidity, Asia has always dealt with the acute challenge of preserving perishables. Yet, in agriculturally rich nations like Vietnam, only an estimated 14% of farmers use cold-chain infrastructure. This has led to acute losses — with up to 31% of fruits and vegetables (as compared to the Southeast Asia’s average of 15%) being discarded due to improper transport and storage.?

Effective refrigeration across the supply chain would improve rates of food preservation. The adoption of real-time temperature surveillance using sensors enables proactive adjustments when temperatures deviate from acceptable limits during storage or transit. When properly implemented, this strategy will create considerable food and sustainability advantages including diminished waste, cost savings, and enhanced reliability of timely deliveries.

The Philippines Cold Chain Project (PCCP) is one such regional effort to address this issue. Funded by the USDA and implemented from 2013 to 2018, the PCCP aimed to improve agricultural productivity and expand the trade of agricultural products by establishing essential cold-chain infrastructure in Mindanao. The project focused on high-value produce such as bananas, mangoes and livestock, ensuring it remained fresh upon market arrival.

Optimising cold-chain logistics still faces hurdles, as highlighted during the AIF 2024 Ideation Roundtable on "Transforming Food Supply Chains for a Sustainable Tomorrow". Difficulty in reliably predicting supply volume and scale is a key challenge. Fluctuations in agricultural yields, impacted by weather patterns, pest infestations, and market variations, contribute to this unpredictability. But advancements in technology and data analytics hold the key. These will help develop adaptable cold-chain solutions that can accommodate the dynamic nature of Asia's agricultural sector.

By investing in comprehensive cold-chain systems, Asia can safeguard its food supply and unlock new avenues for economic growth. A holistic approach encompassing improved supply chain management, logistical infrastructure development, and optimised transportation techniques is essential to tackle food spoilage and waste head-on.

2. Upgrading Systems and Building Infrastructure for Resilience

The pandemic had exposed vulnerabilities in our food supply chains. Now, more than ever, ensuring traceability and predictability work hand-in-hand can help ensure availability of essential goods like food and medicine.

Traceability systems are instrumental in enabling stakeholders to monitor the journey of food products from farm to fork, providing a detailed account of each item’s origin, processing, and distribution history. By documenting essential data such as batch numbers, production dates, and handling procedures, these systems can transparently bolster accountability and consumer trust in the safety and quality of food products.

Traceability also tackles food wastage challenges, an often overlooked yet important aspect of a sustainable food system. With better visibility into our supply chains, we can pinpoint and address inefficiencies that lead to wasted resources.

In the search for enhanced inventory management and traceability, a plethora of technologies and processes stand ready to be deployed. Barcodes, RFID tags, GPS tracking, and blockchain technology are tools being implemented across industries to transform and update their supply chain operations.

The speakers at AIF 2024 also emphasised that we need to leverage data and sophisticated modelling tools. This will enable us to predict trends, demand fluctuations, and potential supply chain disruptions more accurately and efficiently. By employing scenario planning and simulations, we can foster a more proactive food supply chain that is better equipped for challenges that lie ahead; optimised stockpiling based on these predictions can also help minimises waste and prevents shortages.

3. Investing in Regionally Integrative Transport Logistics

The resilience of our food supply chains stands as a testament to the underlying infrastructure’s strength and adaptability. However, intermodal connectivity remains a formidable challenge across many Asian countries. The intricate web of transportation networks that should seamlessly link producers and consumers often faces bottlenecks. Notably, several main ports in the region operate well above capacity, straining their efficiency; limited competition across key trade routes also further exacerbates the complexities of the landscape.

Understanding interconnections between production, distribution, and consumption is vital for building a resilient and responsive network. By mapping these connections, we can prioritise investments to create a more streamlined flow of goods. This includes not just physical infrastructure?but also information sharing and collaboration between stakeholders. Some local entities have started this process, but more regional collaboration is needed to unlock bottlenecks and the true potential here. Effective political cooperation between countries will be critical for cross-border infrastructure to function optimally. As emphasised by the AIF 2024 speakers, trade should not be approached from a beggar-thy-neighbour mentality, but rather, built on mutual cooperation.

To fortify our food supply chains, we must prioritise strategic investments in transportation and distribution networks, including efficient cold-chain infrastructure which is currently lacking in many Asian markets. At present, Asia’s cold-chain industry remains fragmented, with partnerships between global and regional players being the exception rather than the norm. Regulatory frameworks should be examined to incentivise such partnerships.

Strategic investments in physical hubs across the region that act as consolidation points can minimise cross-border logistics and optimise distribution based on real-time data. Additionally, leveraging data analytics to predict fluctuations and disruptions allows proactive adjustments while integrating local stores into the network strengthens the final leg of the journey, ensuring efficient delivery and access to fresh produce. Southeast Asian nations must collaborate to create supply lines that span borders, connecting agricultural hubs with urban centres and remote or underserved areas.

Now that we have shifted our focus towards recovery and growth post-COVID, the regional development of new systems and infrastructure will be a cornerstone of sustainable progress. Being a dominant force in the global food chain, cooperation across Asia for the development of transportation networks, storage facilities, and advanced analytics systems will be vital. This collaboration will be key for creating a supply chain that can tackle food security challenges while being resilient enough to withstand future disruptions.

Infrastructure Asia will continue working towards promoting regional cooperation in key areas of sustainable infrastructure development and enhancing enterprise access to regional logistics infrastructure projects.

Interested in exploring transformative opportunities within Asia's food supply chains? Connect with us at infrastructureasia.org?