Governments Opting to Control Supply Chains During Pandemic Must Tread Carefully

April 16, 2020 Updated: April 16, 2020

Commentary

Arguably, Canadians have never heard more about supply chains than during this pandemic. Discussions about logistics and how food gets to restaurants, grocery stores, and kitchens abound. Canadians are not only genuinely interested in supply chains, but they are also commending the work people involved in making our food systems do, from farm to fork. Outstanding.

But the journey hasn’t been perfect thus far. Empty shelves, line-ups, long queues when ordering food online has made some people nervous. As such, British Columbia recently gave itself the authority to take over supply chains for delivering essential goods and services throughout the province. In other words, the government believes it can do a better job at logistics than the private sector.

The White House showing signs that it wants to control supply chains is also an issue. Agrifood commodities and products could easily be affected by new measures. This could become a problem for Canada’s food security.

Since the beginning of this crisis, everyone in both the public and private spheres have acknowledged, time and time again, that these are unprecedented times. Governments have taken steps to manage public health risks the best they possibly can. For the most part, their work has been amazing.

But supply chains are not something bureaucrats are qualified to fully understand, especially nowadays. When someone is not involved with the mechanics of supply chains daily, blind spots can be overwhelming for the uneducated eye. Given the current pandemic climate, most of those in government are inundated with the complex challenges caused by COVID-19. Thus, governments barely have any capacity to fully take on the supply chains.

There have been disruptions to global supply chains due to the pandemic, so it’s hardly surprising that empty shelves can be seen in many places, including grocery stores. In addition, the perception of running out of anything will instill fear, and fear will push people to make unconventional decisions. Companies and governments, to a certain extent, act the same way.

Governments opting to control supply chains will raise concerns about local patchwork or competing government-controlled supply chains. Some supply chains are already public, which can lead to conflicting priorities. What also needs to be recognized is that few goods flow simply within a provincial geography. National, and most desirably, international coordination is critical. Governments, particularly during an election year, will have skewed priorities which often generates damaging protectionist policies. These policies can be detrimental to the true optimization of supply chains and could set a terrible precedent.

We all know how fear can influence governments, especially in times of crisis.

According to a recent survey by Angus Reid, a total of 71 percent of Canadians are either concerned or extremely concerned about the Canadian economy. Given that more than 13 million jobless claims have been filed in the United States over the last two weeks, Americans are also greatly concerned. When a crisis hits, populations tend to stay close to what’s familiar, which is why the buying local movement is getting a little bit of a lift these days. But these are not good signs.

The United Nations and the World Trade Organization last week appropriately called the world to order, which is especially important now. It noted that the world could face a food shortage if the authorities fail to properly manage the COVID-19 epidemic.

Every effort has been made to ensure that trade flows as freely as possible, especially to avoid food shortages, and this needs to continue.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.