Strengthening Mongolia's Food Security Post-COVID-19

The pandemic has exposed the vulnerability of the food system in Mongolia. Photo credit: ADB.

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Published: 30 March 2022

Build storage facilities, protect local workers, and develop systems to monitor risks.  

Introduction

The coronavirus disease (COVID-19) pandemic has disrupted the global and local food supply chains. In Mongolia, rising food prices, food shortages, inadequate storage facilities, and limited quality logistical resources have put primary producers, processors, importers, wholesalers, retailers, consumers, and households at a disadvantage.

To support the government’s response plan, the Asian Development Bank (ADB) conducted a study to understand the extent of the COVID-19 disrupted food supply chains and impacted food security.  A total of 362 households, 56 retailers, 21 wholesalers, and 35 other supply chain actors were surveyed between June and August 2021. This article shares the findings of this study and provides insights on how policy makers can build a more resilient food supply chain in Mongolia.

Analysis

Food supply chain vulnerabilities

Shortly after the start of the pandemic, Mongolia took measures to reduce transmissions by closing air and land border crossings to the People’s Republic of China (PRC) and other countries. Additional domestic restrictions—imposed after the first confirmed community transmission—limited the movement of people and goods from the provinces to the capital and most populous city, Ulaanbaatar, (and vice versa) except for essential services.

The lockdown and quarantine measures revealed the vulnerability of the food supply chains. High transportation costs, insufficient vehicles, and poor road infrastructure (i.e., between the Russian Federation border and Ulaanbaatar) were some of the main challenges, especially in the delivery of goods during the pandemic.

Limited local storage facilities made it difficult to stockpile products and has led to food losses and increased food prices. Likewise, maintaining a functioning food supply chain became more challenging because of shortage of working capital and workers. 

High international market prices affected imported goods in late 2020 and beyond. On average, national food prices increased by 21% from January 2020 to October 2021.

Figure 1: Evolution of Food Price during the Pandemic

Source: National Statistics Office of Mongolia.

Impact of the pandemic on food supply chain actors

The abovementioned vulnerabilities were also identified in the survey conducted by ADB. The study looked at how the pandemic disrupted food supply chains and increased the risk of food insecurity across urban and rural settings.

Primary producers: Stringent quarantine measures, fuel shortages, high fuel prices, and limited access to markets challenged herders and vegetable growers during the pandemic. For vegetable growers, shortage of labor was another major constraint. Limited storage led to product deterioration and increased food losses. A shift to more localized food supply chain was evident as the share of products sold at the farm gate increased from 28% to 52% for herders and from 8% to 11% for vegetable growers. The latter’s product sales in Ulaanbaatar also declined from 52% to 34%.

Food processors: Meat, flour, milk, and dairy production enterprises suffered from sales decline, higher input costs, and limited workforce. For example, dairy processors were forced to reduce their production capacity by around 20% as logistics disruptions and high transport costs impeded the procurement of raw milk from dairy farms and the timely marketing of products to consumers. The raw milk cannot be stored for more than 2 to 3 days. Meanwhile, transport restrictions were the most challenging for potato and vegetable processors.

Food importers: Food importers were unable to augment the shortage in domestic food supply due to road, air, and rail disruptions and limited warehouses.  Mongolia imports most of its food from the Russian Federation and the PRC. Limited capacity at the border crossing and insufficient train cargo wagons choked food supply chains. Long travel times reduced the quality of the products when they reached Mongolia.

Food wholesalers and retailers: The supply of eggs, fruits, milk, and meat was severely disrupted. The border closure limited the importation of eggs, which normally makes up half of Mongolia’s egg supply. In addition, the government instructed domestic egg producers not to increase prices, which led to a reduction of domestic production as producers were squeezed by higher input prices. The supply of fruits, which largely relies on imports, suffered from border closures and delays in importation. Declining sales, lack of capital, shortage of labor, and inadequate storage were the main challenges.

Consumers: Of the 362 households surveyed, 127 (35%) reported food supply disruptions during the pandemic. Among these, 98 (27%) reported unavailability of food and 29 (8%) experienced economic difficulty to access food due to high prices or low purchasing power (specially for vulnerable groups, such as women-led households and marginalized communities). The supply disruptions were most severe in remote areas, particularly in the east, where more than half of the households reported complete or severe supply disruptions for products with relatively short shelf-life, like eggs, fruits, meat, and milk. This is due to the long period of mobility restrictions. The supply of locally grown products were the least disrupted. The shortage of imported products resulted in a higher demand for local products—partially contributing to their higher prices.

Figure 2: Availability and Access to Food during the Pandemic

Source: Authors’ calculations based on data gathered under the ADB survey.

Aside from food shortages (41%) and lower income (48%), households respondents also identified the deterioration of child education (59%) as one of the impacts of the pandemic. Food shortage among non-farm households saw a particularly steep rise, increasing from 1.2% to 45% compared to the pre-pandemic.

To cope with these challenges, majority of the households surveyed (46%) borrowed from banks and from relatives and friends (32%). Nearly 40% of herder households sold their livestock to make ends meet. Overall, more than one third of the households reduced their expenses by buying cheaper food (28%) and eating less (18%). Reducing food consumption is common among nonfarm, vulnerable households in ger areas or traditional tent communities.

Figure 3: Coping Strategy during the Pandemic

Source: Authors’ calculations based on data gathered under the ADB survey.

Implications

While the true impact of the pandemic may not be known for years, reduced access to healthy and nutritious diet can exacerbate all forms of malnutrition. High fuel price, Russian invasion of Ukraine, and limited crossing of trucks at the PRC border continue to threaten Mongolia’s food security. Policy makers must prioritize building a more resilient food supply chain to resolve pandemic vulnerabilities, achieve zero hunger (SDG 2), and end all forms of malnutrition by 2030.

The government must invest more on strengthening the logistical infrastructure and adding adequate storage systems. The government’s meat stocks system should be reviewed to better respond to different risk scenarios. Greater engagement of the private sector in food preservation can support government efforts and ensure more resilient food supply chains. Having a warehouse receipts system could, to some extent, mitigate the shortage of working capital loans faced by processors, wholesalers, and retailers.

Workers across food supply chains must be protected. Workers are critical to the food security chain. A shortage of workers in labor-intensive sectors, such as vegetable farms, food processing, and marketing, can substantially increase the vulnerability of food supply.  Their access to food and health services needs to be ensured including COVID testing and vaccines. Work spaces should be equipped with proper infrastructure for washing hands and hygiene.

Food insecurity risks monitoring and social protection enactment must be prioritized. Developing a system to monitor prices can help the government diagnose the risks and respond more accurately and effectively.  Food security cannot be ensured only through supply side policy. Social protection policies targeting the most marginalized and vulnerable populations are critical in ensuring access to food during a crisis.

Shingo Kimura
Senior Natural Resources and Agriculture Specialist, East Asia Department, Asian Development Bank

Shingo is responsible for ADB’s operation on sustainable rural development and food security in East Asia. Prior to joining ADB, he was an economist and an agricultural policy analyst at the Organization for Economic Co-operation and Development (OECD) in Paris. He also served at the Ministry of Agriculture, Forestry and Fisheries of Japan, contributing to policy planning and implementation in the areas of rural development, farmland regulations, and food safety.

Enkhjargal Tumur-Ochir
Consultant

Enkhjargal is the team leader of the Managing the Risks of Food Insecurity in Mongolia during the COVID-19 Crisis Technical Assistance Project. In recent years, she has been involved in donor-funded projects to support the agricultural value chain. She used to work as a senior specialist at the Policy Implementation Department of the Ministry of Food, Agriculture, and Light Industry in Mongolia. She has more than 20 years of work experience.

Tserendavaa Tseren
Consultant

Tserendavaa is the financial specialist of the Managing the Risks of Food Insecurity in Mongolia during the COVID-19 Crisis Technical Assistance Project. He works as a senior lecturer and researcher at the Mongolian University of Life Sciences. He has been working in the field of rural investment for the last 10 years.

Asian Development Bank (ADB)

The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

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