Hispanic Market Focus

Latin America’s Food Supply Chain Under Stress; Chile Is A Case Study

Lara L. Sowinski · June 2020 ·

The food supply chain in Latin America is under increased stress from COVID-19, which is exacerbating fragmented food distribution networks, import/export flows, and the ability to maintain proper sanitation and food safety measures. At the same time, unemployment is also rising dramatically, which is making it harder for consumers to afford food.

Already, one-third of the population in Latin America and the Caribbean lives with food insecurity, according to the United Nations Food and Agriculture Organization (FAO). This means consumers have insufficient access to food either due to shortages and/or their inability to afford it. Likewise, food insecurity goes hand-in-hand with a diet that is lacking in healthy, nutritious food.

The FAO also warned that food prices would likely become destabilized as consumers’ purchasing power is further affected by COVID-19, while farmers might have trouble finding labor and affording fertilizer and other farm inputs.

Chile is a case study of the serious impact of COVID-19 on a vulnerable population and stressed food supply chain.

As of June 22, Chile ranked fifth in the world for total number of coronavirus cases (12,681) per million people, behind Qatar (31,485), San Marino (20,543), Vatican City (14,981), and Bahrain (12,808), according to Worldometer, which monitors and ranks coronavirus statistics for 213 countries and territories.

Protests have erupted in the capital city of Santiago in recent weeks, driven in large part over food shortages and rising prices. Chile’s National Statistics Institute (INE) reports that the majority of Chileans’ household expenses outweigh incomes, and credit cards are heavily relied upon to purchase food.

Last year, Walmart Chile issued 1,420,885 credit cards, which is roughly 10 percent of all the country’s active credit cards.

Martín Arboleda, based at the School of Sociology of Universidad Diego Portales in Santiago, Chile, points out that Chile’s massive agricultural export sector not only exposes the country to disruptions that occur regularly in the global food supply chain—changes in trade policy, transportation bottlenecks, etc.—but it’s also forced Chile to depend on imports of grains, legumes, and tubers because so much of the country’s agriculture output is now devoted to the production and export of fruit.

Large-scale agro-food companies are the winner in this scenario, while the country becomes even less self-sufficient in terms of its ability to operate a diverse, independent food supply chain that can affordably and reliably feed and nourish its people.

Maquiladora Workers and Employers Differ Over What Defines Essential

Marisa Barrio Rodriguez · May 2020 ·

Amid the C19 pandemic where the entire world has come to a virtual stop, there is a border city in Mexico where people are lining up in droves and hopping on crowded old buses like a clandestine tribe to go to work. That city is Cd. Juarez, Mexico.

With a population of over 1.3 million, Juarez is home to over 320 maquiladoras (assembly-plants known as Twin Plants) that employ over 300,000. Its geographical location and especially their low wages for employees—typically 215 pesos a day, or approximately US$11—make it a Mecca for hundreds of U.S. companies and many European ones.

According to the National Council of the Manufacturing and Export Maquiladora Industry (INDEX), 70% of the maquilas are closed due to the pandemic. The other 30% still continue their nonstop 24-hour work days divided into 3 shifts of 8 hours each. That means around 125,000 people are still going to work. They have continued the production of products under the guise that they are “essential,” yet in many of the cases, they are not. In Juarez, at least 28 factories remain open even though they do not provide essential services, said Chihuahua state Labor Secretary Ana Luisa Herrera Laso.

Eleven deaths from Covid have been tied to the The Lear Corporation, a Michigan-based plant in Cd. Juarez, which has since closed its 10 sites in Mexico. The Juarez plant linked to the deaths manufactures seating systems for Mercedes, Lincoln and Mustang cars. Some employees from other plants, such as Electrolux, (which recently closed), have also succumbed to the deadly virus.

Susana Prieto, a lawyer and labor rights activist working with maquiladora employees in Juarez, including Lear employees, said she believes the overall number of victims is “much higher…We’re looking at a death train.”

Despite all of this, one must understand the culture of the maquiladora industry and its role in Cd. Juarez. The maquilas are by far the largest employer in Juarez and actually provide higher salaries than other industries and include benefits such as free meals, transportation to and from work, education (elementary, high school and tech school) for those who ask, and coupons for groceries. For some workers, their only meal comes during their shift at the plant. In addition, during the region’s hot summers and cold winters the maquilas may be workers’ only shelter with heat and/or air conditioning.

Positive effects of the twin plants that have trickled into Juarez’s economy over the decades, stemming from a range of industries, including construction, food & beverage, textile, medical, team sport sponsorships, and automotive, to name a few. Maquilas keep the Juarez economy growing. The impact that C19 has made in the manufacturing industry in this city will be crippling to the economy, but it will recover.

No winners in the present situation

The border factories are crucial to the economies of Juarez and neighboring El Paso, Texas, and are a key component of U.S.-Mexico trade. The El Paso port of entry is the 14th busiest port in the U.S. and sees around 2,600 daily truck crossings. El Paso accounted for almost $80 billion in trade during 2019.

Employees are in a Catch-22 because they cannot afford to lose their paycheck, their only means of sustenance, yet they are afraid for their lives. Their workplace requires working in close proximity to one another on the assembly line. In most cases, the twin plants are not providing adequate protection for the workers. Furthermore, most workers don’t know or understand what their rights are, and when they ask the employer to suspend work or request better working conditions they are threatened with signing a “voluntary” termination. The furloughed employees are receiving 50% of their salary, which is not much, but it’s better than nothing.

The medical sector comprises 7% of the overall maquila industry. Other manufacturing maquilas are pivoting to the medical sector, thus making them “essential.” This begs the question: are those maquila owners pivoting for humanitarian efforts or do they just want to remain open and continue lining their pockets?

In a press conference on April 23, 2020, Mexico’s president, Andres Manuel Lopez Obrador (AMLO), stated that he would abide by the United States–Mexico–Canada Agreement, aka NAFTA 2.0, which received final ratification on March 13, 2020. In AMLO’s latest press release he stated that the maquiladoras in the automotive industry will reopen in order to not cause any supply chain disruptions in the U.S., Mexico or Canada.

A statement released by the office of the Secretary of the Economy in Mexico states that Mexico is ready to reactivate the automotive maquila industry as long as it complies with the protection standards set forth by the Health Department of Mexico. In the coming days, the three countries will make details available as to how they plan to safeguard the employees against C19, according to the statement.

There is no question that the ripple effect caused by the closure of maquiladoras that manufacture both essential and non-essential products for the U.S. and multiple other countries is astronomical. And, the contribution that Cd. Juarez makes to support the many industries that rely on maquiladoras is huge. Companies are at a standstill and losing money every day they remain idled.

There are no winners in the present situation. But without a doubt, the ones with the highest stakes are the plant workers. They are the ones who will decide the immediate and long-term future of these business and economic giants. For now, they must choose between continuing to work under the present circumstances, or be safe at home wondering where their next meal will come from.

^About Marisa Barrio Rodriguez

Spain’s Food, Wine Supply Chain Intact, But Truckers Feeling Strained

Marisa Barrio Rodriguez · April 2020 ·

While the world remains virtually paralyzed by the COVID-19 pandemic, the transportation and consumption of food and other products goes on locally, and globally.

The global supply chain may not be the first thing that comes to mind as we adjust our daily lives to the pandemic, but its role is every bit as crucial as government leadership and the dedication of healthcare workers. We all have to eat and use basic products, and these necessities come from a variety of places around the world.

scsparrow-barcelona-marisa-barrio-rodriguez — © Marisa Barrio Rodriguez

Spain is one of the most decentralized countries in Europe, comprised of 17 Autonomous Communities. While Spain’s President Pedro Sanchez works tirelessly to appease all Spaniards as to what is best for the country as a whole, everyone agrees that the flow of essential sustenance products must be maintained.

As people in the U.S. rushed to stores and started panic buying everything from toilet paper to eggs, people in Spain never once worried that a lack of products would be a problem.

Although some contribute this to Europeans being more “chill” and having a laissez faire attitude, this couldn’t be further from the truth. People in Spain are concerned, and they are also quite obedient with the “shelter in place” order that has been set forth by President Sanchez.

Every day, the government provides reports on National TV as to how many arrests and citations have been given out since the order went into effect over a month ago. The government has been on top of the pandemic from the get-go. Citizens adhere to the order with few complaints and present themselves as a united front in true utilitarian fashion in order to protect the greater good for all.

Supermarkets are fully stocked with food and customers are respecting the one to two meter social separation, and there is no hoarding. The inventory of wine and beer is also well stocked, which all things considered is making life in Spain pretty good.

On the other hand, pharmacies were completely out of stock of masks, disposable gloves, antibacterial gel and thermometers. However, as of April 14, 2020 the pharmacies I visited have restocked gel, gloves and some have protective masks (but no N95’s).

Overall, Spain has shown to be a very resilient country in these uncertain times. President Sanchez has begun offering stimulus packages to small businesses to help prevent workers from being laid off. There are rent payment deferments, and of course, the protections offered by universal healthcare.

Meanwhile, the #stayhome policy is making a substantial dent in the spread of COVID-19. The curve has been flattening for the past five days, so the country is hopeful. Construction workers have been allowed back to work, so long as the rules for non-transmission of the virus are obeyed.

The government is very aware that citizens—especially children—have been cooped up at home for a month, and it’s looking into lifting parts of the State of Alarm in order to allow children to go outside. This may happen in the coming weeks. Government officials are also very concerned about the elder population, particularly those who are alone, and in some cases, dying alone at home. On a bright note, very good programs have been implemented to address domestic violence.

On the transportation front, Spain, like most countries, saw an initial demand spike when the State of Alarm was first issued by President Sanchez. Within a few days, however, the spike subsided and life has gone on as usual. The volume of incoming cargo still shows a slight uptick, but nothing extraordinary.

The Port of Barcelona has remained open for business for non-perishable items and there has been little to no interruption at the port, as employees are considered essential workers.

In an April update, the port stated that operations are continuing uninterrupted, including loading and discharging of vessels. Extra precautions are in place if a vessel calls any Spanish port with an ill crewmember on board, especially one who is exhibiting signs of COVID-19. In that case, Port Authorities will follow a Technical Instruction where the vessel will be requested to immediately inform, through the Maritime Declaration of Health, to the Port Authority, the Harbour Master or the Maritime Port Traffic Control Centre, according to a report on www.nepia.com.

Depending on the circumstances, and after a Health Inspection on board the vessel has been undertaken, the Port Authorities will decide if the vessel remains at anchorage or if it is allowed to berth at a designated berth.

There is more of an issue within the country itself with regards to truck drivers who are demanding better working conditions.

Because so little is known about the Coronavirus, gas stations and other food services along Spain’s highways are not allowing anyone in to use the facilities, and the restaurants and cafes at the gas stations are no longer providing service.

This leaves truck drivers in a compromised position, as they don’t want to be driving surviving solely on chips and chocolate bars that they’ve purchased through a window outside of the gas station, and they are also finding it difficult to find a public restroom.

As a result, they are demanding higher pay due to the present circumstances. In addition, the truck drivers are now driving longer distances more often because of the demand for products throughout the country. They feel they have more exposure to the virus due to working without protection, while their immunity is potentially lowered due to lack of sleep and proper nutrition.

^About Marisa Barrio Rodriguez

Port of Barcelona Fulfilling “Essential Services”

Lara L. Sowinski · April 2020 ·

While the city of Barcelona remains on lockdown, the port stated in a press release on March 16 that it would guarantee to “fulfill essential services to maintain the supply of goods, facilitating logistics operations and the correct provision of the various industries that have to remain in operation, as well as the consumer products that must be supplied to the public.”

The port is open and operational to the port community, including terminals, stowage, shipping agents, carriers, freight forwarders, customs agents, Customs, border inspection services, et cetera.

Barcelonians, meanwhile, are staying indoors.

SCSparrow’s foreign correspondent, Marisa Barrio, reports that grocery stores in the city are well stocked, with the exception of eggs. Shoppers are provided disposal gloves upon entering grocery stores and markets, and purchases must be paid for with credit card or electronically so that cashiers do not have to handle cash.

Pharmacies are also open, but otherwise the city is eerily quiet except for an occasional dog walker or pedestrian, she said.