Covid-19 commentary: Recovery and ratios . . . six examples

This blogpost gives more info about the six examples mentioned in the last one.

That was was about why and how ratios provide usefully simple answers to complicated questions. Or, perhaps more realistically at this stage of policy-making about the UK food system policy, provide a means for productive discussions about which specifically precise number to put forward.

EXAMPLE 1

  • How many large companies? How many medium-sized? How many small?
    There are winners and losers in the current crisis (see section 4 of The food supply system into the second month of lockdown) and larger predatory companies are already eyeing up to take over large highly geared companies as well as smaller ones made vulnerable by illiquidity and/or insolvency.

    • I’ve heard large service providers give ball park figures of 300 large companies on their books, 3500 medium-sized companies and 350,000 small ones, roughly a ratio of 1:10:1000.
    • What is the optimal ratio within the agrifood sector, and in sub-sections of it (e.g. primary producers, packers, processors, distributors, wholesalers, retailers)
      • And what policy and fiscal interventions need to be trialled to establish an optimal ratio?

EXAMPLE 2

  • What ratio of household food and beverage spend should be on products carrying standard-rate VAT? 
    • Pre-Covid, it was approximately 50%, so a ratio of 1:1.
      • Given the economic burden of diet-related morbidities, the ratio needs to be considerably lower than this.
      • And what policy and fiscal interventions need to be trialled to establish an optimal ratio?
    • note: If you’re unfamiliar with how VAT is an identifier of products with zero or close to zero nutritional value and their relationship to diet-related morbidities, see this blogpost supporting our Submission to the National Food Strategy Call for Evidence #15: Drug foods and their specific risks to the food supply system.

EXAMPLE 3

  • What should be the ratio between UK-grown and imported fresh produce?
    Many public health organisations across the world, including PHE, advise their populations to consume at least 5-a-day portions of fruit and vegetables as essential part of a healthy diet. Where are they to come from, given the following:

EXAMPLE 4

  • What is the return on investment (ROI) ratio for increasing nutrient consumption?
    • A return on investment (ROI) is rudimentary gauge of an investment profitability over a particular time period; for an easy-to-understand explanation, see Investopedia here.
    • There are challenges in using a such a rudimentary monetary metric in this context, especially as the ROI can be years later. Nonetheless, there are measurable diet-related economic costs and benefits.
    • For example, a nutrient-rich diet during the first 1000 days of life from conception has life-long benefits, in particular regarding cognitive development. At a population level, this can be measured in terms of educational achievement and GDP.

EXAMPLE 5

  • What ratio of spare/used capacity should there be in UK storage facilities
    The shutdown of the food service sector led to significant loss in livestock value. Either animals are still on farms and require feeding, or if they have been slaughtered and the more expensive parts of the animal carcasses sent to cold storage. We’ve heard that cold storage last week was at an unprecedented over 95% capacity with similar reports from the US.

    • How “just-in-time” should inventories be for particular foods? How large a buffer should the UK have to respond:
      • To demand from a population of 66.5 million people
      • To need during an emergency disrupting the food supply system?
    • More specifically, how many weeks’ supply regarding nutrient security should the UK preserve and store, given how perishable nearly all fresh produce is?
    • What capacity for preservation processing as well as storage should the UK have (ranging from spray drying to cold storage, from smoking or salting to chilling or canning and everything in between)?
    • In the light of what the the Government, NHS and the devolved Public Health bodies have learned about PPE stockpiles before and during the pandemic, key issues needing to resolved would include ownership, facilities, independent inspection & testing and release of stock to the market which is close to its expiry date.

EXAMPLE 6

  • What proportion of agri-produce should be used for x, y or z?
    Primary production depends on land, soils or other sources of nutrients, water and energy, all increasingly scarce resources. We are all aware, too, of diet-related morbidities, another factor to bear in mind when deciding how our agri-resources are used.

    • What proportion of the UK potato crop should be used for making crisps (last year, PepsiCo alone used 6%; footnote 26 here)?

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The next blogpost, Recovery and rates of change, illuminates why and how ratios are even more useful when decision-makers have an idea about how these ratios change over time; i.e. what their rate of change is.

And getting such complex, often counter-intuitive ideas across in a simple way successfully can be through graphics.

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