President Volodymyr Zelenskiy made his comments in an online post after speaking to European Council President Charles Michel, who was visiting the city of Odesa, a major Black Sea port for exporting agricultural products.

“It is important to prevent a food crisis in the world caused by Russia’s aggressive actions,” Zelenskiy wrote on the Telegram messaging app. “Immediate measures must be taken to unblock Ukrainian ports for wheat exports.”

He did not specify what measures he would like taken. NATO countries including the U.S. have ruled out armed intervention for fear of triggering a wider war.

Michel, who chairs summits of the European Union’s national leaders, wrote on Twitter that he had seen silos full of grain, wheat and corn in Odesa that was ready for export but blocked.

“This badly needed food is stranded because of the Russian war and blockade of Black sea ports. Causing dramatic consequences for vulnerable countries. We need a global response,” he wrote.

Russia’s blockade of Ukrainian ports since invading on Feb. 24 have added to volatility in international financial markets, sending commodity prices higher.

U.N. Secretary-General Antonio Guterres said last week the problem of global food security cannot be solved without restoring Ukrainian agricultural production to the world market.

Spring sowing

Ukraine was the world’s fourth largest exporter of maize (corn) in the 2020-21 season and the number six wheat exporter, according International Grains Council data. But nearly 25 million tonnes of grains are now stuck in Ukraine, a U.N. food agency official said on Friday.

Ukrainian agriculture officials say the exportable surplus is around 12 million tonnes, and agriculture analysts have said Ukraine’s stocks are so high that there will not be enough room to store the new harvest when it comes.

Ukraine has sown about seven million hectares of spring crops so far this year, or 25-30 per cent less than in the corresponding period of 2021, Agriculture Minister Mykola Solskyi said earlier Monday.

He said Ukraine had exported 1.09 million tonnes of grain in April, but that the sowing was not of the same quality as last year and the sowing area for corn was smaller.

Solskyi underlined the importance of exports of Ukrainian grain via Romania, where they are being taken by rail, but said those exports could be complicated in two months by exports of the new wheat crop in Romania and Bulgaria.

Baltic ports offered the most attractive other alternative for exporting grain, he said.

Repeating allegations that Russia has been stealing grain from Ukraine during the war, Solskyi said Ukraine regarded any ships carrying grain via the port of Sevastopol in the Crimea region to be stolen.

“Work is underway so that this stolen grain can be quickly seized,” he said, without giving details.

Russia, which annexed Crimea from Ukraine in 2014, has denied stealing Ukrainian grain. Moscow says its “special operation” in Ukraine is designed to disarm and denazify its smaller neighbour. Ukraine and the West say this is a false pretext for an unprovoked war of aggression by Russia.

— Pavel Polityuk is a Reuters commodities correspondent in Kyiv; additional reporting by Max Hunder.

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In other words, his produce farm was a lot like a lot of other startups — a lot of energy was going in a lot of directions, but they were always bumping up against the same bottlenecks.

On the plus side, Crisp Organics, the farm Vogler started with his mom, Willy Arkesteyn-Vogler, in 2009, had developed a following. Vogler had a regular income and satisfied customers.

But he was burned out from managing direct-to-consumer sales. 

“I will miss some of those interactions (and) opportunities to build,” Vogler now says. “But it made sense for us to streamline.”

Five years ago, Vogler started selling a portion of his crop to Discovery Organics, a Vancouver-based distributor that specializes in sourcing organic produce from small family farms. The model proved successful for his farm and he steadily increased the volume of fresh fruits and vegetables that he sold wholesale. 

It can feel like a big step for small producers, who often favour the direct-to-consumer model, establishing CSA programs, setting up booths at farmers markets or selling on the farm. 

Besides, going direct has actually has a lot going for it. The demand for local foods has made it easier for growers to connect with customers. Direct marketing also offers advantages, including higher retained net income as a share of gross income thanks to higher prices on smaller quantities.

But there’s also no question that direct-to-consumer sales are more labour-intensive. More than that, they can also force the farm to produce more products so it has enough of what the consumer wants to keep them coming back. It all puts increased stress on producers, and it’s these stresses that are leading growers to form partnerships with distributors to sell at least a portion of their harvest.

Exploring the options

A distributor may be a light at the end of the tunnel. Combining wholesale and retail strategies can help reduce risks, according to a Nova Scotia Department of Agriculture report, Guide to Marketing Channel Selection. Distributors can help diversify income and provide consistent demand, and they can cut labour that would otherwise be going into setting up market booths or packing multiple CSA boxes.

The distributor sector, meanwhile, is evolving too. For instance, Nicola Irving signed on with SPUD as early as 2009 to sell Irving’s Farm Fresh pork products. SPUD is an online supermarket that delivers products grown and raised on Canadian farms. 

Prior to working with a distributor, Irving, who raises Berkshire pigs in Round Hill, Alta., sold almost all of her sausage, bacon, ham and other pork products at farmers markets and through an on-farm store. She appreciated the higher margins for direct-to-consumer sales and the fact that customers paid at the time of purchase, but she also recognized that a distributor relationship could have its benefits.

“What SPUD, and the other places that work with small producers do, is ask for our price and see if it will work for them to mark it up and make a profit and not outprice it in the market,” she explains.

For Irving, there were two immediate benefits. “There was no haggling over the price,” she says, “and it also expanded our reach.”

Some customers still want direct, she finds. “Maybe they want to come to the farm store and see what else we’ve got, or order a whole pig for the freezer instead of a few pork chops.”

During the decade she has been selling through SPUD, Irving has also signed on with other small distributors, and she notes these relationships proved especially beneficial during the pandemic. 

At the same time that farmers markets were shutting down and customers were sheltering in place, leading to declines in direct-to-consumer sales, online grocery shopping spiked and distributors needed more product than ever.

“What we were supplying (to our distributors) pretty much doubled overnight,” Irving says. “We lost sales in some of our face-to-face retail but we were selling more through these other channels.”

Same farm, different model

At Crisp Organics, transitioning from direct-to-consumer markets to wholesale helped Vogler to cut back from 50 different types of fruits and vegetables to just 10 staple crops. Growing only beets, carrots, parsnips, celery, celery root, broccoli, leeks, corn, beans and new potatoes is less stressful and labour-intensive than keeping up with a more diversified crop mix.

His cultivated acreage hasn’t changed but the transition has allowed Vogler to increase mechanization, cut back on staffing (and the time it took to recruit and train new workers) and spend fewer hours selling his produce.

“We started out growing a crop here and there (for distributors) and then we increased the number of crops we were offering Discovery Organics,” Vogler explains. “This year was our fifth year (selling to distributor) and it was the first time we felt comfortable moving away from our other sales channels.”

As of 2021, Vogler is selling 100 per cent of his fresh produce through distributors. 

Brody Irvine, purchaser for Discovery Organics, says he has talked to a number of producers who prefer working with distributors because it allows them to shift their business to less intensive production and sales methods. Irvine believes that wholesale markets not only allow diversification, they may also be more predictable than farmers markets and restaurant sales. 

“Wholesale markets are pretty stable … and we can tell a grower with relative confidence that if they grow 1,000 pounds of green beans every week through the summer, you can count on having a market,” Irvine explains. “You get a more reliable, consistent movement of your product.”

A fit for diversification?

While there are significant advantages to working with distributors, not all producers are well-suited to the model. If you’re just starting out on a diversification scheme, for instance, you may face a hurdle. Most distributors, including Discovery Organics, want to partner with producers who have several years of experience to ensure they can deliver sufficient quantities of produce or proteins. Quality is important too. 

In fact, Justin Vanderploeg, owner/operator of Two EE’s Organics in Surrey, B.C., believes that the field-grown produce he sells through several different distributors has to be even better than the produce sold at local farmers markets.

“When you’re selling to distributors, you’re not there when a customer takes it off the table so your quality control has to be a lot tighter … your produce has to speak for itself,” he explains. At the farmers markets, by contrast, “the customer who comes to the table is willing to hear your story that it looks a bit different because of X, Y, Z but it still tastes super sweet. Through a distributor, you don’t have that opportunity to sell.”

Vogler had a lot of experience growing produce when he started supplying fresh vegetables to Discovery Organics but he was unable to grow cauliflower that met strict standards for the wholesale market. 

“We had to get comfortable grading out products we wouldn’t normally have to grade out,” he says. “We might be able to bring a small cauliflower to the farmers market … but in the grocery store, they are buying cauliflower by count and need them to be a consistent size and colour.”

Selling to distributors means that producers must also be able to comply with labelling requirements that aren’t needed for direct-to-consumer sales. For Irving, it meant all products had to be processed in a commercial kitchen and list product information, allergens and ingredients. 

The Nova Scotia Department of Agriculture report notes that the grading, packing and delivery requirements can make working with distributors more stressful. Moreover, distributors can be demanding when it comes to prices, deadlines and logistics.

For Irving, who still generates 60 per cent of her revenue from farmers markets, on-farm sales and restaurant accounts, working with distributors has become an essential part of her business model. The extra work, she believes, is worth it.

“(Distributors) are reaching customers that I couldn’t reach,” she says. “If you want to service more customers and reach more customers than you’d ordinarily reach, it’s a good way to expand your business.”

Five questions to ask distributors

If you’re thinking of linking up with a distributor, here are five questions to ask before signing on the dotted line:

1. WHAT ARE THE GAPS IN LOCAL SUPPLY?

Every winter, Justin Vanderploeg of Two EE’s Organics schedules calls with distributors to determine which crops he should plant in the spring. Knowing that orders for kale are down but there are limited supplies of hot peppers ensures that the crops he plants will be sold at harvest.

2. WHAT VOLUMES CAN YOU TAKE?

Just like it’s important to know what to plant, knowing how much to plant matters, too. There’s no reason to plant four acres of beets if there’s no market. Distributors know what — and how much of — different produce and proteins their customers want. Understanding standard quantities will help you plan your crop mix and also help you determine if your operation is large enough to play in that part of the market.

3. WHAT ARE THE INDUSTRY STANDARD PACK OUTS AND GRADES?

Brody Irvine of Discovery Organics encourages growers to investigate exactly how their produce should be delivered to distributors. “Certain wholesalers have specific preferences,” so ask distributors about everything from box size, material and weight to grading requirements. The easier you can make their jobs, the more likely they’ll be to place subsequent orders.

4. WHAT ARE THE TERMS?

You need to understand the payment terms. While “net 30” is common, some distributors have longer terms — and not all pay on time. Irving estimates that she writes off at least one bad debt every year and she looks for warning signs, like late payments, that signal a wholesale client might be sinking. 

5. CAN YOU PROVIDE REFERENCES?

Don’t be afraid to ask distributors for references and then call growers to ask about their experiences. “Some distributors will make big promises upfront and, when the (purchase order) comes through, it’s for half the amount you discussed,” Irvine says. Talking to growers with established relationships can help you avoid entering into problematic relationships. 

The post The deal with food distributors appeared first on Country Guide.

It’s not a treat. They can either feed their crops to animals or let them spoil. And other farmers are doing just that — dumping truckloads of fresh grapes to rot on compost heaps.

The farmers cannot get their produce to consumers because of lockdowns that aim to stop the spread of coronavirus. In India, as in many parts of the world, restrictions on population movement are wreaking havoc on farming and food supply chains and raising concern of more widespread shortages and price spikes to come.

Across the globe, millions of labourers cannot get to the fields for harvesting and planting. There are too few truckers to keep goods moving. Air freight capacity for fresh produce has plummeted as planes are grounded. And there is a shortage of food containers for shipping because of a drop in voyages from China.

In Florida, a lack of Mexican migrant labourers means watermelon and blueberry growers face the prospect of rotting crops. Similar shortages of workers in Europe mean vegetable farms are missing the window to plant.

Such sprawling food production and distribution shocks illustrate the pandemic’s seemingly boundless capacity to suffocate economies worldwide and upend even the most essential business and consumer markets. There has been limited disruption so far to supplies of staple grains such as rice and wheat, although problems with planting and logistics are mounting.

Indian farmer Anil Salunkhe is feeding his strawberries to cows because the local tourists who usually eat them are gone, as are the fruit vendors who once worked the streets of the nearby metropolis of Mumbai.

“Nobody was willing to buy strawberries due to the lockdown,” Salunkhe told Reuters as he fed strawberries to a cow in Darewadi village, in Satara district.

He can’t even give his strawberries away: With stay-home orders in place, few villagers ventured out from their homes when he offered them the berries for free, he said.

In nearby Bhuinj village, Prabhakar Bhosale feeds lettuce to buffalo and lets villagers take more for their own cattle. The hotels and restaurants that normally buy lettuce are closed.

Migrant labourers stranded

The potential impact of planting and harvest disruptions is most acute in poorer countries with big populations, said Abdolreza Abbassian, a senior economist at the United Nations Food and Agriculture Organization (FAO).

India — the world’s second-most populous country, where a majority of the population is involved in agriculture — is among the most vulnerable nations to the disruptions.

Prime Minister Narendra Modi imposed a 21-day lockdown with just a few hours notice on March 25, leaving many of its 120 million migrant labourers struggling to get home and with no money for rent, food or transport.

The country’s northern grain bowl relies on labour from eastern parts of the country, but workers have left the farms because of the lockdown.

“Who is going to fill the grain bags and bring the produce to market, and transport it to mills?” asked Jadish Lal, a merchant in Punjab’s Khanna grain market, the country’s largest.

Supply problems in one place are quickly felt on the other side of the world. In Canada, imports of speciality Indian vegetables such as onions, okra, and eggplant have dropped by as much as 80 per cent in the past two weeks as air cargo space dwindled, said Clay Castelino, president of Ontario-based Orbit Brokers, which helps shipments clear customs.

Castelino figured the sharp decline meant the food had simply gone to waste: “With perishable food, once it’s gone, it’s gone,” he said.

Europe’s missing workers

Spain has a shortage of migrant workers from countries such as Morocco who cannot travel.

“In around 15 days time, the blueberry season will peak until mid-May,” said manager Francisco Sanchez, a manager at Spanish growers association Onubafruit. “We need a big concentration of labour then.”

In Italy, about 200,000 seasonal workers will be needed in the next two months. The government may have to ask people receiving state benefits to pick the fruit and vegetables, said Ivano Vacondio, head of Italy’s Food Association Federalimentare.

In France, Agriculture Minister Didier Guillaume has issued a rallying cry to what he called France’s “shadow army” of newly laid-off workers to replace the usual crews of migrant workers on the farms.

“If the call is not heard, the production will remain in the fields, and the entire sector will be damaged,” said Christiane Lambert, head of France’s largest farm union, FNSEA.

In Brazil — the world’s top exporter of soybeans, coffee, and sugar — farm lobby CNA said the industry faces a range of problems, including challenges hiring truck drivers to haul crops and a shortage of spare parts for farm equipment.

In Argentina, the world’s top exporter of soymeal, exports have been delayed as the government ramps up inspections of incoming cargo ships.

Land, sea and air

In addition to the trucking problems, a sharp decline in air traffic has cut deeply into capacity to move fresh produce long distances.

Andres Ocampo, chief executive of Miami fruit importer HLB Specialties, relied on commercial flights to shift papayas and other produce from Brazil to Florida. Now he is buying more from Mexico and Guatemala, where goods can still be shipped by trucks.

Ocampo says volumes of the company’s imports from Brazil have dropped by 80 per cent.

“In Europe, it’s even worse, because they don’t have a Mexico-like source for papayas,” he said.

U.S. and Canadian exporters are grappling with a shortage of refrigerated containers to supply goods, as voyages of container ships from China to the West Coast are down by a quarter due to reduced demand because of lockdowns.

“The containers are tough to get right now,” said Michael Dykes, president of the International Dairy Foods Association, a U.S.-based trade group. “If a company needs five containers, they’ll find they can get one.”

Port congestion is slowing shipments of pork and beef to destinations such as China because workers have been told to stay at home. That is exacerbating the shortage of protein supplies in China, where an outbreak of African swine fever has taken a quarter of the world’s pigs off the market in the past year and a half.

A different kind of crisis

The emerging supply-chain disruptions are much different than the food crises of 2007-08 and 2010-2012, when droughts in grain-producing nations caused shortages that led to higher prices, unrest and riots in several countries. Those price spikes were driven in part by state hoarding of rice and other staples.

Now, staple grain supplies are relatively plentiful and global prices have been low for years as farmers in the U.S., Brazil and in the Black Sea region have planted more and improved yields.

Although there are signs that big importers such as Iraq and Egypt are boosting grains purchases amid rising food security concerns, other countries are boosting exports. Second-largest rice exporter Thailand, for instance, is taking advantage of higher rice prices by increasing exports from stockpiles.

Top rice exporter India, however, has stopped rice exports due to labour shortages and logistics problems. Third-largest exporter Vietnam has also curbed exports.

African nations — where many people spend more than half of their income on food — are among the most vulnerable to disruptions in staple food supplies.

The continent is the fastest-growing consumer of rice, accounting for 35 per cent of global imports and 30 per cent of wheat imports. Sub-Saharan Africa alone is the third-largest rice consuming region, yet holds the smallest grain inventories — relative to demand — of all regions, because of tight government budgets and limited storage.

While the earlier food crises involved supply shocks, today the problem is getting plentiful supplies to the people who need it — many of whom have suddenly lost their income.

“It is a whole different animal,” the FAO’s Abbassian said. “You don’t have labour, you don’t have trucks to move the food, you don’t have money to buy the food.”

— Reporting for Reuters by Rajendra Jadhav, Naveen Thukral and Nigel Hunt; additional reporting by Mayank Bhardwaj in New Delhi, Veronica Brown and Jonathan Saul in London, Sonya Dowsett in Madrid, Libby George in Lagos, Phil Blenkinsop in Brussels, Stephen Jewkes in Milan, Gus Trompiz and Sybille de La Hamaide in Paris, Emma Farge in Geneva, Michael Hogan in Hamburg, Christopher Walljasper, Karl Plume, PJ Huffstutter and Tom Polansek in Chicago, Rod Nickel in Winnipeg and Ana Mano in Sao Paulo.

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Official rations are down to 300 grams (10.6 ounces) per person per day, the lowest ever for this time of year, the U.N. said following a food security assessment it carried out at Pyongyang’s request from March 29 to April 12.

It found that 10.1 million people were suffering from severe food insecurity, “meaning they do not have enough food till the next harvest,” U.N. World Food Program spokesman Herve Verhoosel said.

North Korea’s population is around 25.2 million, according to its Central Bureau of Statistics, the report said.

Verhoosel said the word “famine” was not being used in the current crisis, but it might come to that in a few months or years. “The situation is very serious today — that’s a fact.”

The country suffered a famine in the mid-1990s believed to have killed as many as three million people.

For its assessment the WFP, one of only a few aid agencies with access to the country, gained widespread entry to farms, households, nurseries and food distribution centres.

Verhoosel blamed a combination of dry spells, heat waves and flooding for the new crisis, which the U.S. State Department said was the government’s fault.

“The DPRK regime continues to exploit, starve and neglect its own people in order to advance its unlawful nuclear and weapons program,” a department spokeswoman said, adding that it could meet its people’s needs if it redirected state funds.

After a second summit with U.S. President Donald Trump failed to produce a deal to end the program in return for sanctions relief, North Korean leader Kim Jong Un set a year-end deadline for Washington to show more flexibility.

North Korea has for years relied on regular supplies of U.N. food aid.

Its agricultural output of 4.9 million tonnes was the lowest since 2008-09, leading to a food deficit of 1.36 million tonnes in the 2018-19 marketing year, the WPF report said.

Prospects for the 2019 early season crops of wheat and barley were worrisome. “The effects of repeated climate shocks are compounded by shortages of fuel, fertilizer and spare parts crucial for farming,” Verhoosel said.

The WFP plans to make another assessment during July and August.

— Reporting for Reuters by Tom Miles; additional reporting by David Brunnstrom in Washington.

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The Houthis control most towns and cities including the capital Sanaa, from where they ousted Abd-Rabbu Mansour Hadi’s government in 2014. A Saudi-led coalition intervened against the Houthis in 2015 with the aim of restoring his government.

After hearing that humanitarian food was being sold on the open market in Sanaa, WFP said it found many people had not received the food rations to which they are entitled, and that at least one local partner organization affiliated with the Houthi ministry of education was committing fraud.

“This conduct amounts to the stealing of food from the mouths of hungry people,” WFP executive director David Beasley said. “At a time when children are dying in Yemen because they haven’t enough food to eat, that is an outrage. This criminal behaviour must stop immediately.”

Houthi officials contacted by Reuters did not immediately respond to requests for comment.

Yemen’s war and the ensuing economic collapse have left 15.9 million people, 53 per cent of the population, facing “severe acute food insecurity” and famine was a danger if immediate action was not taken, a survey said this month.

WFP is trying to get food aid to as many as 12 million severely hungry people.

It said its monitors had gathered photographic and other evidence of trucks illicitly removing food from designated food distribution centres and local officials falsifying records and manipulating the selection of beneficiaries.

“It was discovered that some food relief is being given to people not entitled to it and some is being sold for gain in the markets of the capital,” the WFP statement said.

Beasley said he was asking the Houthi authorities to stop food being diverted and make sure it reaches the people who need it.

Herve Verhoosel, WFP spokesman in Geneva, said WFP was looking at the possibility of distributing cash to needy people, if a biometric identification system could be introduced, using personal data including iris scans and finger prints.

He said Beasley had written to the Houthi leadership about the WFP findings several days ago.

— Reporting for Reuters by Tom Miles.

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President Raul Castro unveiled an ambitious market reform agenda in one of the world’s last Soviet-style command economies after he took office a decade ago, but the reforms moved slowly in the face of resistance from conservatives and bureaucrats.

At the April 16-19 congress, Castro railed against an “obsolete mentality” that was holding back modernization of Cuba’s socialist economy. But he also said the leadership needed to respond quickly to problems like inflation unleashed by greater demand as a result of reforms in other sectors.

In response, delegates voted to eliminate licenses for private wholesale food distribution, according to reports over the past week in the Communist Party daily, Granma, and state television.

Delegates said the state would contract, distribute and regulate prices for 80 to 90 per cent of farm output this year, compared to 51 per cent in 2014, according to debates broadcast in edited form days after the event.

Reuters reported in January that Cuba had begun a similar rollback in some provinces, increasing its role in distribution again and regulating prices. The decision at the congress will extend that program.

Data released in March showed that Cuba’s farm output has barely risen since 2008, when Castro formally took over from his brother Fidel, contributing to a spike in food prices blamed on supply-demand mismatch.

Cuba imports more than 60 per cent of the food it consumes.

The Union of Young Communists’ newspaper, Juventud Rebelde, reported late last year that the price of a basket of the most common foods increased 49 percent between 2010 and early 2015.

There are no government statistics on food inflation.

While hurricanes and drought have played a part in poor farm output, some experts and farmers say Cuba did not go far enough in allowing farmers freer access to seeds and fertilizers to increase production.

Backtracking

But demand is rising fast. Relaxation of restrictions on self-employment has led to a boom in small restaurants, at a time when Cuba’s detente with the West is leading to record numbers of tourists and an emerging consumer class.

According to the reports, there was no discussion at the congress of moving ahead with plans to allow farmers to buy supplies from wholesale outlets, instead of having them assigned by the state.

Nor was there mention of another reform, also adopted five years ago and never implemented, to have co-operatives join forces to perform tasks currently in state hands — for example, ploughing fields.

The state owns nearly 80 per cent of arable land in Cuba, leasing most of it to co-operatives and individual farmers. It has a monopoly on imports and their distribution.

“They never fully carried out the reforms and gave them time to work. They stopped halfway and appear unable to come up with any other solution than backtracking,” said a local agriculture expert, who asked to remain anonymous.

He said farmers often had no equipment and few supplies such as seed.

The government reported leafy and root vegetable output at five million tonnes in 2015, similar to 2008, and unprocessed rice and bean production of 418,000 tonnes and 118,000 tonnes, compared with 436,000 tonnes and 117,000 tonnes eight years ago.

Cuba produced 363,000 tonnes of corn last year, just 3,000 more than when Castro took office.

— Reporting for Reuters by Marc Frank in Havana.

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