ULAANBAATAR, MONGOLIA (29 October 2020) — The Asian Development Bank (ADB) has approved a $410,000 technical assistance (TA) grant to help manage food insecurity risks amid supply disruptions caused by the coronavirus (COVID-19) disease pandemic in Mongolia.
“Together with its severe economic impacts, the COVID-19 pandemic disrupted food supply chains and increased the risks of food insecurity in Mongolia,” said ADB Director for Environment, Natural Resources, and Agricultural Development in East Asia Qingfeng Zhang. “With this TA, ADB's first focusing on assessing and mitigating the impact of pandemic on food supply chain disruptions, we aim to develop rapid response mechanisms to address food insecurity risks during the pandemic.”
The poor, on average, spend 43% of their household expenditure on food and are particularly vulnerable to increases in food prices. The pandemic’s adverse shocks of increased food prices and reduced household incomes exacerbate the risk of malnutrition among Mongolia’s vulnerable and poor households.
Three in four poor households were negatively affected by the high prices of major food items. The strict quarantine measures and trade disruptions made maintaining food supply chains challenging. In April 2020, 58% of farm households were unable to sell products because of logistical disruptions.
Aside from the COVID-19 pandemic, Mongolia faces a range of food insecurity risks, including extreme weather, natural hazards, pests, and diseases. Mongolia has one short growing season so not having a timely supply of agricultural production inputs would disrupt grain production.
The vulnerabilities of Mongolia’s food supply chain are likely to exacerbate supply disruptions during the crisis including a weak logistical and storage network, weak biosecurity and food safety arrangements, poor access to financial services among small and medium-sized enterprises and small-scale herders, and high dependency on food imports from the Russian Federation and the People’s Republic of China.
In addition to preparing a short-term response, the TA will assess the vulnerabilities of Mongolia’s food supply chains, provide policy advice, build capacity to manage a wide range of food insecurity risks beyond the COVID-19 pandemic, and assist in preparing medium- to long-term strategy and action plan to establish more resilient food supply chains and reduce food insecurity risks.
The TA will also support a feasibility study to establish a price monitoring system along food supply chains and emergency stock systems, and dialogue among public and private stakeholders to form coordinated actions to build more resilient food supply chains including the application of digital technologies
The TA is estimated to cost $410,000, of which $400,000 will be financed on a grant basis from ADB’s Technical Assistance Special Fund. The Government of Mongolia will provide counterpart support.
The TA complements other ADB COVID-19 assistance to Mongolia, which includes a $15 million loan to support the wheat supply chain in Mongolia during the COVID-19 pandemic, a $100 million COVID-19 Pandemic Response Option, $30 million in additional financing for the Fifth Health Sector Development Program, and a $26.4 million loan to lessen the socioeconomic impacts of the pandemic through the Shock-Responsive Social Protection Project.
ADB 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.