By: Michael Asante
Published June 12th, 2020
The University of Alberta organized a webinar and a certificate course under the theme “The COVID-19 and the Economics of World Food and Agriculture.” The Objective of this certificate course was to help participants’ process and interpret all the information on COVID-19 regarding agricultural economics. Drawing upon information from around the world, the course considers the links between COVID-19 and the agri-food system, considering both the direct links between the disease and the food system, and the indirect links between risk management behavior and the food system.
This course was run as a linked set of six webinars on Zoom, starting on Tuesday, May 19th, and concluding on Thursday, June 4th. Each session lasted 80 minutes, with 45 minutes of presentation and 25 minutes of discussion. Participants could pose and upvote questions, some of which were addressed during the live session. Some questions were also moved to eclass discussion forums for continued dialog.
Most presenters are professors in the Department of Resource Economics and Environmental Sociology at the University of Alberta, with guest speakers from Arizona State University, the International Maize and Wheat Improvement Centre, and the International Food Policy Research Institute.
On May 19, 2020, Professor Brent Swallow delivered the first presentation on the topic “Pathways of vulnerability and connection in the food and agricultural economies.” He discussed the importance of having a world economy perspective on the effect of the COVID-19 since it helps us understand many ways COVID-19 affects what is happening on farms, in the kitchen and markets both in Canada and around the world. Also, it helps us to specifically understand the dependence of imports and exports, the evolution or changes in food consumption and diet, and the multiple links between diets and health. According to Professor Swallow, the food system is a life cycle, beginning with inputs and processing, to consumption, waste management, and possible unintended consequences of food and health policies. He started the discussion with some of the ways economists are tracking and predicting the consequences of COVID-19 in food and agriculture and five pathways by which the COVID-19 will impact agriculture.
How was the global food and agriculture situation before this pandemic? Professor Swallow stated that regarding the global situation at the beginning of this pandemic the global food stocks were relatively full which is different from the time of the global financial crises between 2007 and 2009. That time the global stocks of major food crops e.g. maize, rice, wheat, and soybeans were historic low. The world stock of wheat was very high before this pandemic he noted. Figure 1 shows world wheat stocks in the red bar and the ratio between stocks and usage with the blueline as discussed.
Figure 1: World Wheat-Ending Stocks vs Stocks/Usage Ration
Source: (CME Group, 2020)
According to Professor Swallow, at the beginning of 2020, stocks were also very high in Canada and crop forecasts were generally positive for most of the world’s major crop exporters. As reported by the International Labour Organisation (ILO), in many countries around the world especially middle income but also many lower-income countries had recently institutionalized systems of social protection or social welfare protection to protect their citizens against unforeseen shocks, shown in Figure 2. He also noted that many of the social protection systems involve the simple but effective transfer of cash into the hands of the needy and vulnerable people, this system may be of great use to parents for example to protect their children during this time of great disruption.
Figure 2: Percentage of measures announced by function of social protection
Source: (International Labour Organisation, 2020)
Additionally, three reports that confirmed his assertion that there is bad news for many people who are highly vulnerable to the impact of COVID-19. The United Nations High Commission for Refugees (UNHCR) estimated 70 million people were displaced in 2019, 14 million of whom were newly displaced (UNHCR, 2019). The Food and Agriculture Organisation of the UN estimated 113 million people were experiencing acute food insecurity and 820 million people are undernourished (FAO, 2019). The recently released Global Nutrition Report warns of extreme inequity and nutrition around the world with roughly 10% of the global population undernourished, 10% obese, and about 10% suffering from anemia (Global Nutrition Report, 2020). He also highlighted that certain parts of the world continue to suffer from localized threats to food supply including African Swine flu virus in many parts of the world, desert locust in East Africa, and the Middle East.
According to Prof. Brent, COVID-19 has a profound impact (direct and indirect) on our food system. The direct impacts include (1) disease morbidity/ mortality, and (2) nutrition disease incidence/ risk. The indirect impact includes (3) change in income and purchasing power, (4) mobility, and (5) change to policies as seen in Figure 3.
Figure 3: Pathways of the impact of COVID-19
The first pathway is the economic impact of COVID-19 is based on mobility and mortality. Professor Swallow stated that early research shows two factors had the greatest effect of national prevalence rates: higher income, and higher population density. The fatality rate varies by age group and by country, China reports a fatality rate of about 2 per 1,000 among people under 40 years of age and 148 per 1,000 people over 80 years of age. Mobility removes people from the workforce besides all the other effects (Stojkoski et al, 2020).
The second pathway according to him is a link between diet and health, which is magnified by COVID-19. The poor-quality diet causes several health problems that in turn affect the risk of contracting COVID-19. People with diet-related diseases are 2-3 times more likely to contract COVID-19 (Li et al, 2020). He further emphasized that COVID-19 will also change diet and health in many ways. A study by World Vision International based on the Ebola experience from West Africa predicts that its increased malnutrition and avoidance of healthcare will cause more death than the COVID-19. World Vision predicts that an additional 5 million will children will be malnourished in the world’s 24 most fragile states (World Vision International, 2020).
The third pathway operates through mobility. Mobility has been severely constrained by the public health measures put in place to contain the pandemic. These restrictions in mobility affect the food system in many ways: it affects the mobility of consumers, market intermediaries, government support services, input suppliers, and workers.
The fourth pathway operates through the income and employment effects of COVID-19 control measures. In Canada, 800,000 restaurant workers lost jobs in the early days of the pandemic lockdown (Global News, 2020). The International Food Policy Research Institute (IFPRI) predicts that the employment effects will be less pronounced in production agriculture, moderate in food manufacturing, and most severe in food services (IFPRI, 2020).
The fifth pathway is the effect of policy changes on agri-food systems. There is a great concern by IFPRI, OECD, and FAO about the possibility of countries imposing defensive restrictions on food exports, such restrictions will worsen the food crisis of 2007 and 2008 especially for import-dependent countries that are small and poor.
In conclusion, Professor Swallow stated that there are also concerns that travel restrictions between countries will result in “thicker” borders. Another important set of policies related to food markets because of the link between food markets and the original outbreak in Wuhan, China. Concerns markets are being the hotspots for transmission and rumors about food and vegetable consumption being risky. Restrictions on the timing and location of food markets may be directly counterproductive, forcing people into congested locations, restricting supplies and increasing prices.
CME Group (2020). Wheat Reports Available at https://www.cmegroup.com/trading/agricultural/wheat-reports.html(02/06/20)
FAO (2019). Global Report on Food Crises. Available at http://www.fao.org/news/story/en/item/1187744/icode/ (05/06/20)
Global Nutrition Report (2020). Available at https://globalnutritionreport.org/ (02/06/20)
Global News (2020). 800,000 restaurant jobs lost in Canada in March amid COVID-19: Survey. Available at https://globalnews.ca/news/6767041/coronavirus-restaurants-canada/ (02/06/20)
IFPRI (2020). Covid-19 resources: Available at https://www.ifpri.org/covid-19 (02/06/20)
International Labour Organisation (2020). Social Protection responses to the COVID-19 around the world Available at https://www.social- protection.org/gimi/ShowWiki.action?id=3417 (03/06/20)
Li, R., Pei, S., Chen, B., Song, Y., Zhang, T., Yang, W., & Shaman, J. (2020). Substantial undocumented infection facilitates the rapid dissemination of novel coronavirus (SARS-CoV-2). Science, 368(6490), 489-493.
OECD report on macro impacts of COVID-19 Available at https://www.oecd.org/coronavirus/policy-responses/covid-19-and-international-trade-issues-and-actions/ (05/06/20)
Special issue of Canadian Journal of Agricultural Economics on COVID-19 and the Canadian agriculture and food sectors (2020): thoughts from the pandemic onset: Available at https://www.onlinelibrary.wiley.com/toc/17447976/0/ja (02/06/20)
Stojkoski, V., Utkovski, Z., Jolakoski, P., Tevdovski, D., & Kocarev, L. (2020). The socio-economic determinants of the coronavirus disease (COVID-19) pandemic
UNHCR (2019). Global Forced Displacement Top 70 Million. Available at https://www.unhcr.org/news/stories/2019/6/5d08b6614/global-forced-displacement-tops-70-million.html (02/06/20)
World Vision International (2020). COVID-19: 30 million children’s lives at risk from secondary effects of deadly disease. Available at: https://www.worldvision.ca/about-us/media-centre/covid19-30-million-childrens-lives-at-risk (02/06/20)