Panic could cause a global food crisis under Covid-19

One potentially disastrous outcome of the Covid-19 pandemic would be a global food crisis. This column by the former Director General of the International Food Policy Research Institute, argues that to ensure food security for all, urgent action is needed at both the global and national levels. Food prices and markets should be monitored closely; social safety nets should protect the worst affected and most vulnerable; more investment is required to build more resilient food systems, and; it is vital to ensure the normal functioning of agricultural and food supply chains and the smooth flow of global trade.

The Covid-19 pandemic is one of the biggest global health crises since the Second World War: more than 70,000 people have already lost their lives and healthcare systems are under pressures that they have not experienced for decades. If proper measures are not taken, this health emergency could also lead to a global food crisis.

Due to restrictions of movement and disruptions of supply chains and trade, the food and nutrition security of many people – particularly vulnerable population groups such as children, women, and elderly – could be compromised. Most importantly, panic behavior could lead to global food price spikes and volatility, further exacerbating risks to global food and nutrition security. We have seen such behavior before, notably during Ebola, avian influenza, and the 2008 food price crisis.

Global food security already faces challenges

The world is already facing food and nutrition security challenges. According to the United Nations Food and Agriculture Organization (FAO), more than 820 million people across the globe are suffering from hunger, although the Chinese number reported by FAO is grossly overestimated.

What’s more, close to 150 million children around the world are stunted because of lack of proper nutrition. And in many countries, hunger and malnutrition have been on the rise for the past three years due to conflicts and the refugee crisis, climate change, and worsening inequality. The Middle East and sub-Saharan regions are particularly vulnerable.

It is almost certain that the total number of hungry people will rise again in 2020 because of Covid-19. The lockdowns and restrictions of movement reduce food production due to a lack of inputs and labor, and disruptions in food supply chains and trade. School feeding programs and social protection schemes could also become dysfunctional.

The indirect impact through slower economic growth could affect millions of people’s food and nutrition security. The pandemic is rattling global stock markets, and economic activity and investment have slowed dramatically in places where many people are ill and movements are restricted to contain further spread of the virus.

Panic could lead to a global food and nutrition security crisis

If countries panic this time too, food trade and markets could be disrupted, albeit on a much larger scale. Kazakhstan, one of the world’s biggest shippers of wheat flour, banned exports of that product along with others, including carrots, sugar and potatoes. Serbia has stopped the flow of its sunflower oil and other goods. Russia is leaving the door open to shipment bans and has said that it is assessing the situation weekly.

The 2008 food price crisis taught us a valuable lesson. The crisis was caused by droughts in Australia and Argentina, increasing oil prices, rising use of food grains for biofuel production, and trade policy failures. These prompted many countries to impose various export policies to restrict the export of food products.

For example, there was no shortage of rice supply, but due to panic behavior, many countries imposed higher taxes on rice exports or banned rice exports altogether. Rice prices doubled in the global market in six months, causing severe disruptions in rice trade, leading to a food price crisis. We must continue to monitor and discourage countries from banning food exports.

How to prevent a panic

The novel coronavirus is still spreading and it is difficult to say when it will be contained. To ensure food security for all, we need to take urgent actions at both the global and national levels.

First, there is a need to monitor food prices and markets closely. Transparent dissemination of information will strengthen government management of the food market, prevent people from panicking, and guide farmers to make rational production decisions. To nip market speculation over supply in the bud, governments should strengthen market regulation.

Second, it is necessary to ensure that international and national agricultural and food supply chains function normally. China has set a good example of how to ensure food security during the current epidemic by, for example, opening a ‘green channel’ for fresh agricultural products, and banning unauthorized roadblocks.

E-commerce and delivery companies can also play a key logistical role. For example, as lockdown measures have increased the demand for home delivery of groceries, e-commerce companies have come up with an in-app feature for contactless delivery, allowing couriers to leave parcels at convenient spots for customers to pick up, thereby preventing unnecessary person-to-person interactions.

Third, social safety nets are needed to protect those who are the worst affected and most vulnerable. These safety nets, which could be in the form of cash or in-kind transfers (context-specificity is important here), should be accompanied by intervention by health and nutrition officials, because investing in the health and nutrition of vulnerable populations could lower the mortality rate of diseases such as Covid-19 – as nutritional level and mortality rates are intricately linked. Social safety nets are also crucial in the post-epidemic period to drive ‘reconstruction’ efforts.

Fourth, more investment is needed to build an even more resilient food system. Such investment must come from national governments as well as the international community, as enhancing the capacity of developing countries to prevent or contain a food security crisis is a collective effort. In today’s highly interconnected world, contagious diseases such as SARS, Ebola, avian flu, and Covid-19 can travel easily across borders.

There is also a need to build safeguards for the prevention and control of zoonotic diseases like HIV, Ebola, MERS, SARS, and possibly Covid-19, which originated in wildlife and jumped to humans. The international community needs to do more to prevent future outbreaks of such diseases, including regulating meat, seafood, and wildlife markets.

Moreover, it is important to ensure the smooth flow of global trade and to make full use of the international market as a vital tool to secure food supply. Global institutions such as the FAO, the World Trade Organization, the World Bank and the International Monetary Fund must ask countries not to use Covid-19 as an excuse to issue trade protectionist policies.

 

 

Author:

Shenggen Fan is Chair Professor at China Agricultural University. He is the former Director General of the International Food Policy Research Institute (IFPRI).