Impact of Energy Disruptions on Agri-food Supply Chains

The blockade of the Strait of Hormuz has triggered a global energy supply shock, posing a serious threat to agriculture and food systems. However, the specific mechanisms for the damage to food security and rural livelihoods in developing countries have not been fully studied. Using the hypothetical extraction method (HEM) and the input-output data of the Asian Development Bank (ADB), we quantify the impact of such serious oil supply interruptions on the output, value-added, and employment multiplier of agricultural and food supply chains in India, Pakistan, and the Philippines. By breaking down the multiplier into direct, indirect, and induced channels, we find that the structural vulnerabilities of these developing countries are mainly driven by induced effects. The contraction of labor income and household consumption is the main reason for the contraction of total output, which shows that the main threat to food security is not only the shortage of real production but also the systematic collapse of household purchasing power. In addition, the transnational decomposition of downstream and upstream supply chain sectors reveals profound structural heterogeneity, emphasizing that the transmission of energy shocks will change with different upstream and downstream dependencies. In order to effectively mitigate these asymmetric shocks, crisis response strategies must go beyond traditional physical supply indicators. Policymakers should integrate food rights frameworks, active income stabilization measures, and diversified supply chains to guarantee human livelihoods and ensure fair access to food.