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By Sara Gustafson

 Photo credit: Malcolm Dickson

Introduction

The CGIAR COVID-19 Hub has released updated policy notes regarding the impact of the COVID-19 pandemic on global and regional food systems. This latest series of updates covers several FSP priority countries, including Ethiopia, Nigeria, Malawi, and Bangladesh.

Ethiopia's situation

In Ethiopia, the pandemic has resulted in declines in overall GDP and in GDP of the agrifood sector.  The majority of these declines stemmed from reductions in trade and remittances. Total GDP fell by between 6.1 and 7.7 percent, with the agrifood sector accounting for 14.9 percent of those total losses. Ethiopia’s poor population has risen by 8.5 percentage points since the onset of the pandemic, which severely restricted the livelihoods and incomes of poor urban households in particular. Despite these declines, overall the country’s food value chains have proven to be resilient to the shock presented by the pandemic. The report also highlighted that earlier investments in irrigation have provided important access to water for vegetable production and household sanitation.

Significant challenges to agricultural production in Malawi

COVID-19 posed significant challenges to agricultural production in Malawi, exacerbating existing climate stresses. Access to agricultural inputs and output supply chains has been disrupted; at the same time, transport costs have risen, and market prices have faced volatility. All of these factors have reduced farmers’ incomes, as well as the GDP of Malawi’s agrifood system. The pandemic has had an even greater impact on urban households, which have experienced some of the highest income losses. Research into the impact of the pandemic on Malawi’s food value chains remains ongoing.

Nigeria's challenges

Nigeria has also faced doubled challenges in the form of the COVID-19 pandemic and a weakened economy. During the course of the pandemic, both total GDP and agrifood system GDP declined as a result of lost income and disrupted supply chains. The agrifood system accounted for 14.7 percent of Nigeria’s national GDP loss. Household purchasing power has also declined as incomes have been impacted by economic recession and high inflation rates.

CGIAR researchers continue to work with the Nigerian government to assess the impacts of the pandemic and associated policy responses and to identify priority policies to aid in national and household-level economic recovery.

Economic fallout in Bangladesh

In Bangladesh, the economic fallout from the COVID-19 pandemic has been severe. As in other countries, reductions in income and disruptions to supply chains have led to declines in total GDP and agrifood system GDP. The losses in the agrifood system GDP account for around 41 percent of national GDP losses. Rice prices within Bangladesh increased 35 percent during the pandemic; in addition, the 2021 harvest period and replanting period have been hampered by floods, which could further drive up prices. The dairy, poultry sectors, and aquaculture sectors were all hit with substantial losses due to lockdown measures, with producers facing significant loss of income. Poverty in Bangladesh reached 30 percent of the total population – an estimated 7 percentage points higher than would have been estimated in the absence of COVID-19. Government policies, including subsidies, have attempted to bolster the agrifood sector to support recovery and strengthen value chains.

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By Sara Gustafson

This blog is originally posted in the ssa.foodsecurityportal.org. 

 Photo credit: World Bank

Introduction

As the world continues to grapple with the ongoing presence of COVID-19, it has become clear that the pandemic’s impacts extend far beyond human health. Economic growth, markets and supply chains, poverty, and food security have all experienced ripple effects from the pandemic itself and the measures taken to stop the spread of the deadly virus. In Africa, the outbreak of COVID-19 coincided with the signing of the African Continental Free Trade Area (AfCFTA), leading to concerns about the potential negative impacts on free trade targets in the region.

A forthcoming book chapter, “The COVID-19 Pandemic and African Continental Free Trade Area (AfCFTA): Exploring Potential Impacts and Developmental Implications” (published in Global Market and Global Trade [Working Title]), examines these impacts and discusses how the AfCFTA and similar trade agreements could be used to mitigate the negative economic fallout of COVID-19 and similar shocks in the future.

The African Continental Free Trade Area (AfCFTA)

The AfCFTA was launched by the African Union (AU) to address persistent low levels of intra-regional trade on the continent. In 2014, trade among African countries accounted for 16% of the continent’s overall trade activity, despite the existence of numerous bilateral intra-African trade agreements. Research has linked intra-regional trade to reduced poverty, improved food security, and strengthened economic growth, and so improving these low numbers could have significant effects on important development outcomes in Africa.

The AfCFTA’s target is to increase boost intra-regional trade by 60% by 2022. The agreement aims to achieve this ambitious goal by creating a single African continental market for goods and services that allows free movement of people (for business purposes) and investments. In addition to expected reductions in poverty and food insecurity, a secondary hoped-for outcome of the agreement is the improvement of Africa’s trading position in the global market. Some of the AfCFTA’s most important stated objectives include: the elimination of tariffs and non-tariff barriers to trade; cooperation on investments, intellectual property rights, and customs matters; and the establishment of a mechanism to settle disputes among member states.

To date, 34 of the 55 AU member states have signed and ratified the agreement, making the AfCFTA the largest free trade area in the world. The agreement has the potential to lift 30 million Africans out of poverty and bring approximately USD 16.1 billion in welfare gains to the region.

The COVID-19 Pandemic and African Continental Free Trade Area

The chapter reports that in the first quarter of 2020, before the outbreak of COVID-19 in Africa, there were signs that intra-regional trade was beginning to intensify as the framework of the AfCFTA took shape. However, the pandemic has already had some direct effects on the agreement itself and on trade activity within the region. COVID-19-related travel bans and border closures postponed negotiations on several key aspects of the AfCFTA, causing a six-month delay in the implementation of the agreement.

As in many other places around the world, COVID-19 and the associated policy measures adopted to help stop the spread of the virus disrupted supply chains in Africa. Inputs for agriculture, manufacturing, and other industrial uses became more difficult to import, causing production delays and shortages. At the same time, production was further slowed as many employers like factories and mines closed as part of social distancing and lockdown efforts.

Travel bans and lockdown measures around the world also led to declining demand for oil, both globally and within Africa. This has had a significant detrimental impact on oil-producing countries in the region (e.g., Angola, Nigeria, and the Democratic Republic of the Congo).

Demand has slowed for African non-oil goods as well. Overall consumption throughout the region slowed in 2020 as a result of the pandemic. The chapter reports a 17.3% decline in African household expenditures from the previous year. Together, declining production and slowing demand for both oil and non-oil exports are expected to impact trade, employment, incomes, and well-being in the region for at least the next two years.

Despite these negative impacts, however, the chapter also highlights how the COVID-19 pandemic has presented the opportunity for AfCFTA and similar free trade agreements to capitalize on new products, markets, and trade frameworks. These could ultimately help mitigate the potential longer term negative impacts of the pandemic, stimulate future economic growth, and increase resilience against future shocks.

For example, the chapter argues that travel restrictions could encourage more local and regional production and reduce dependence on imports from overseas. By supporting African countries in ramping up production of goods that are currently often imported from Europe or Asia, AfCFTA can help create employment on the continent while also guarding against future supply chain disruptions.

Similarly, intra-African trade can play an important role in reducing food insecurity – both chronic and that induced by COVID-19 – in the region. Many African countries are net food exporters; however, the region also has many areas suffering from food deficits. By improving regional transportation networks, the AfCFTA can help strengthen regional food value chains. With stronger value chains, food-exporting countries can more easily export food within the region to areas in need.

Potential Impacts and Developmental Implications

The AfCFTA was also launched at the right time to leverage technological advances and improvements in connectivity across the region, the chapter argues. While other sectors have suffered from pandemic-induced supply chain disruptions, the telecommunications sector in Africa has experienced some growth. By focusing on new and emerging sectors and products, the AfCFTA could help generate employment and income opportunities that are more protected from economic shocks.

While COVID-19 has presented, and continues to present, significant challenges for populations and economies throughout Africa and the rest of the world, it also presents opportunities. The AfCFTA presents one channel through which policymakers and other value chain actors can strengthen the region’s ties, break down barriers hampering growth, and invest in vital institutions and infrastructure. By doing so, trade in the region will become more sustainable and resilient.

The COVID-19 Pandemic and African Continental Free Trade Area (AfCFTA): Exploring Potential Impacts and Developmental Implications

The COVID-19 pandemic has caused nontrivial disruptions to global value chains and affected the lives of many people, particularly the poor across the world. The outbreak of the COVID-19 pandemic in the early part of 2020 in Africa, happened during a time that African countries had just signed one of the world’s largest trade agreements and therefore began introducing continental-level structures to strengthen free trade among member states. This chapter examines the potential effect of the COVID-19 pandemic on the agenda for free trade in Africa, both in the short and in the long-term.

COVID-19 and impacts on global food systems and household welfare

The food system, and those who depend on it, have been strongly but unevenly affected by COVID-19. Overall, the impacts on food systems, poverty, and nutrition have been caused by a combination of a generalized economic recession and disruptions in agri-food supply chains. This paper provides an overview of the contributions to this Special Issue of Agricultural Economics.

Impact of COVID-19 on Egypt’s dairy and artichoke value-chains: Qualitative findings from rapid value chain assessments

The COVID-19 crisis is having strong impacts on the Egyptian economy, but these impacts differ strongly across sectors.1 Based on scenarios run using a Social Accounting Matrix (SAM) multiplier model of Egypt’s economy, COVID-19 is estimated to have resulted in an 8.6 percent decline in Egypt’s GDP during the 4th quarter of FY 2019/20 (April to June). The services sector was hit hardest, falling by 10.9 percent, followed by industry, which contracted by 8.3 percent.

Resilience of global and local value chains to the Covid‐19 pandemic: Survey evidence from vegetable value chains in Senegal
Photo credit: World Bank

In this paper we descriptively investigate the Covid‐19 pandemic's early impact on the fruit and vegetable supply chain in Senegal, using trade statistics and survey data collected through online questionnaires and telephone interviews with smallholder farmers, agro‐industrial companies, agricultural workers, traders, importers, and consumers.

Food consumption and food security during the COVID‐19 pandemic in Addis Ababa

International humanitarian organizations have expressed substantial concern about the potential for increases in food insecurity resulting from the COVID‐19 pandemic. We use a unique panel survey of a representative sample households in Addis Ababa to study both food security and food consumption during the pandemic. In contrast to some other countries in the region, Ethiopia never went into a full lockdown severely restricting movement.

Essential non‐essentials: COVID‐19 policy missteps in Nigeria rooted in persistent myths about African food supply chains

Food supply chains are extremely important for food access and livelihoods across Africa, but their role is often overlooked and underappreciated. Under normal conditions, the gap between myth and reality can result in the design of policies and programs with limited or negative impacts on food security and welfare. The shock of COVID‐19 has heightened this disconnect, with potentially dire consequences for food security.

COVID-19

By Sara Gustafson published in Dec 22 2020

 Photo credit: The CGIAR Research Program on Policies, Institutions, and Markets (PIM)

 

While global food systems have remained generally resilient to the ongoing COVID-19 pandemic, regional and local systems, especially in food-deficit countries, face growing challenges. These include diminished purchasing power, disruptions to domestic supply chains, and higher food import costs due to rising global prices, according to the latest AMIS Market Monitor. Understanding how COVID-19 is affecting local and global food value chains is key in establishing effective policy responses to mitigate the harmful impacts of the ongoing public health crisis. A recent webinar on COVID-19 risk, co-organized by the CGIAR Research Program on Policies, Institutions, and Markets (PIM) and Food Security Portal, examined the results of several recent studies on how various food value chains are responding to COVID-19.

 

The event was moderated by Nicholas Minot, Senior Research Fellow and Deputy Division Director of IFPRI’s Markets, Trade and Institutions Division, as well as co-leader of PIM’s research on Inclusive and Efficient Value Chains.

Food consumption and food security during the pandemic in Addis Ababa, Ethiopia

The first speaker was Kalle Hirvonen (IFPRI), who discussed food consumption and food security during the pandemic in Addis Ababa, Ethiopia. Despite Ethiopia’s large population, the country has seen remarkably low rates of COVID-19 infection. Rapid government action, including social distancing mandates and expansion of social safety nets, has contributed significantly to Ethiopia’s containment of the virus. Ethiopia never went into a full lockdown, which Hirvonen suggests may explain the study’s positive findings on food security.

 The study itself utilized household surveys which began before the outbreak of COVID-19 and continued via phone through August 2020.  The surveys captured self-reported changes in income and food and nutrition security among 600 households in the capital city of Addis Ababa. More than 50 percent of respondents reported experiencing a loss in income during the study period, with the poorest households seeing the highest losses. However, households’ dietary diversity scores saw virtually no change as a result of the pandemic.

 

 “Even the poorest households in Addis are consuming a much more diverse diet than we usually see in rural areas,” Hirvonen said.

 

 The study also found that while there was no significant change in households’ food budgets or total calorie consumption, what households were eating did shift during the pandemic. Consumption of more expensive, perishable fruits and vegetables fell between September 2019 and August 2020. At the same time, consumption of cheaper staple foods rose. This finding held true regardless of whether households reported experiencing job or income loss.

 

Overall, Hirvonen concluded, the findings suggest that swift government response and the populations’ high rates of adherence to COVID-19 prevention measures helped Ethiopia avoid the full lockdown scenario seen in many other countries. This may have prevented disruptions to local food supply chains and helped Ethioipa’s agricultural systems remain resilient to COVID-19.

 

 

Responses by India’s food and agriculture supply chains to the country’s strict lockdown measures

Next, Sudha Narayanan (Indira Gandhi Institute of Development Research) highlighted responses by India’s food and agriculture supply chains to the country’s strict lockdown measures.

The government of India imposed a nationwide lockdown fairly early on in the pandemic but did so in a sudden and dramatic fashion that had an immediate negative impact on food and agricultural value chains. Fishermen who went out to sea one day returned the next day to find that they could not sell their catch because markets had been closed. Truckers transporting food across the country could no longer cross state lines and often simply abandoned their deliveries. Migrant workers could no longer travel, leading to agricultural labor shortages in rural areas.

 

 “It was . . . cataclysmic in terms of impacts on livelihoods,” Narayanan said.

 

The transportation disruption and labor shortages caused by the lockdown resulted in declines in both supply and demand for food and agriculture products. These challenges have increased both the risks and the costs associated with supply chain operations. Market arrivals for 40 studied food crops collapsed, and the prices farmers received for their goods fell sharply. At the same time, consumer food prices increased significantly in urban areas. These supply chain frictions continued through the summer, even after the strictest lockdown measures were lifted.

 

Narayanan wrapped up with several important conclusions. First, the government plays an important role in food availability and access in India. The government procures a large volume of staple foods, specifically grains, for distribution through social safety net systems; these programs helped to keep cereal and pulse prices somewhat stable throughout the months of lockdown. Second, informal food sales also proved to be crucial during this period, helping both laborers and consumers be more resilient to supply chain disruptions. However, despite these somewhat functional channels, overall food expenditures fell by 12 percent between March and July. While producer prices have recovered generally, inflation in food and agriculture markets continues to rise. 

 

 

“We have both a health crisis and an economic crisis that are ongoing and we have to watch carefully to see how this pans out further one,” Narayanan concluded.

Findings on the impact of COVID-19 on Nigeria’s critical fish sector

The final speaker was Ben Belton (WorldFish / Michigan State University). Belton presented findings on the impact of COVID-19 on Nigeria’s critical fish sector. The study utilized high-frequency phone surveys that sought to track data related to fish production, prices, producers’ access to various inputs, and assistance provided to the sector.

The surveys identified several short-term effects of Nigeria’s COVID-19 lockdown measures (defined as lasting 3-4 months), namely difficulty buying or selling fish and related products and difficulty accessing transportation for fish products. The impacts of the lockdown on fish value chain actors’ access to inputs lasted slightly longer, while demand for fish and fish products has seen the longest lasting consequences and has not yet fully recovered from Nigeria’s lockdown measures. Thus, there has been a lagged effect following the initial shock.

 

Employment in the fish sector dipped significantly following the outbreak of COVID-19 and the start of Nigeria’s lockdown. Employees were often unable to get to work due to travel limitations and disruptions to public transportation; at the same time, reduced sales led many firms in the fish sector to suspend their operations and hire fewer laborers.

 

Belton highlighted that the challenges faced by Nigeria’s fish sector have shifted throughout the study period. During the early spring, lockdown measures and movement restrictions formed the most substantial challenges to the sector’s functioning. By September, however, the most critical challenge facing fish value chain actors were input shortages and subsequent skyrocketing input prices. This again highlights the lagged effect of the outbreak of COVID-19.

 

Importantly, the fish value chain received very little assistance during the pandemic: less than 2 percent of respondents in the April survey reported receiving any help. Additionally, the bulk of the assistance that fisheries did receive was through informal channels (family and friends) rather than through government programs or NGOs.

 

“We see clearly that government safety nets were not widely implemented,” Belton emphasized. “Our recommendations then are addressing these points in future crisis situations.”

 

Conclusion

The seminar concluded with a Q&A session and closing remarks from Frank Place (PIM Director), who highlighted the importance of the studies covered by the webinar.

“Impacts in these countries will have regional and global spillovers,” Place concluded, “so there’s keen interest in understanding the effects of COVID-19 and government responses in these three examples.”

 

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by Sara Gustafson published in Aug 14 2020

Photo by World Bank

Introduction

While no major food shortages have followed on the heels of COVID-19 as of yet, a new article by IFPRI researchers published in Science finds that agricultural and food markets around the world are still feeling the effects of the pandemic and related lockdown measures.

 

Restrictions of movement have led to labor shortages, and food demand has changed in favor of less expensive and less nutritious foods as schools and restaurants shut down and swathes of people saw a loss of income. In addition, several countries imposed food export restrictions in the early months of the pandemic, disrupting trade for commodities like wheat and rice. Due to all of these impacts, the paper argues that the COVID-19 pandemic has directly and indirectly affected all four pillars of food security (availability, access, utilization, and stability).

Impacts on Food Access and Utilization

The IMF has forecast a 5 percent drop in the global economy in 2020. This poses a significant threat to poor households around the world, who are already particularly vulnerable to income shocks and subsequent food insecurity. Early models suggest that between 90 and 150 million people could fall into extreme poverty as a result of the pandemic. Much of this increased poverty will occur in Africa south of the Sahara and South Asia. Recent surveys in Ethiopia have shown that poor households are struggling more with income losses than with shortages of available food — only 20 percent of surveyed households had enough savings to meet their food needs for more than 30 days.

Increasing poverty will have negative consequences for nutrition as well as for food security. As poor populations struggle to maintain their access to food in the face of rising poverty, many will shift their food baskets to rely more heavily on cheaper, less nutritious foods. Poor households spend nearly 50 percent of their total incomes on non-staple foods like fruits, vegetables, and animal proteins and dairy. As incomes decline, many of these households will likely reduce their consumption of these healthy foods and rely more heavily on staple foods such as wheat, rice, or maize and on cheaper processed foods. While consumption of staple foods and processed foods can help people maintain their caloric intake, it reduces their dietary diversity, consumption of critical micronutrients, and overall nutritional well-being. The impacts of lowered nutritional status will be particularly significant for children, whose growth and cognitive development depend strongly on proper nutrition.

Impacts on Food Availability and Stability

While COVID-19’s biggest impacts are being seen in the realm of food access, the pandemic is also affecting food availability and stability. Due to national and regional differences in agricultural value chains, these impacts vary between low-income and higher-income countries.

 

In high-income countries, staple food production is largely mechanized; these value chains have seen less disruption from COVID-19-related social distancing measures and other practices. Production of non-staple foods, such as fruits and vegetables, in these countries depends more heavily on people, and often on seasonal migrant workers. These value chains have seen more disruption as a result of the pandemic as people’s movements have been restricted.

Non-staple value chains in high-income countries have also experienced some supply disruptions. Meat processing plants in both Europe and the United States have faced closures due to infected employees, and disruptions in international air transport have disrupted the supply of products such as horticultural exports from Africa.

 

In low-income countries, agriculture as a whole tends to be less mechanized and more dependent on human labor. Restrictions of movement will have greater impact on labor supplies in these countries, with potential for subsequent reductions in food production. In addition, these countries face more significant disruptions in transportation due to less well-developed infrastructure; these have caused disruptions in the supply of farm inputs and in food distribution to markets, stores, and end consumers.

 

In terms of stability, some policy measures taken in response to the pandemic can do more harm than good overall. For example, export restrictions can lead to instability in available food supplies, as well as to unpredictable food prices. Both wheat and rice prices have experienced increased volatility since the start of the pandemic; this volatility can also lead to uncertainty regarding supplies and can reduce agricultural investments, hampering future productivity.

 

What can policymakers do to ameliorate the impacts of COVID-19 on local and global food security?

Social safety nets form one crucial pathway to help reduce the detrimental effects of the pandemic on food security. Expanded or enhanced cash transfer programs have been adopted in many countries and allow consumers to better maintain their access to nutritious foods.

 

Policymakers should also exempt agricultural inputs, farms, food processing, and food distribution channels from lockdown measures to ensure stable and sufficient food supplies. This would also entail the guarantee of health measures to protect food value chain workers and increased  collaboration with providers of agricultural inputs, such as seeds, fertilizer, and financing.

 

Governments should also avoid knee-jerk responses such as export restrictions on food and agricultural products in order to keep trade flows open. This would ensure stable food supplies and reduce food price volatility.

 

Monitoring and surveillance systems for zoonotic diseases like COVID-19 should also be increased along the food value chain in order to prevent future pandemics.

 

Finally, the paper emphasizes that in order to enact these and other beneficial policies, low-income countries will need increased assistance from high-income countries and international organizations. By increasing both aid and cooperation, countries can help ensure that the global health crisis does not become a global food security crisis.

About Authors/Citations

Citation of the original paper: Laborde, D., Martin, W., Swinnen, J., & Vos, R. (2020). COVID-19 risks to global food security. Science, 369(6503), 500-502.

Sara Gustafson is a freelance writer.

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