RNRF Round Table: The Impact of the COVID-19 Pandemic on Global Food Systems
Åsa Giertz, Senior Agriculture Economist working with the Africa region at the World Bank in Washington, D.C., spoke at a virtual meeting of the RNRF Washington Round Table on Public Policy on December 16, 2020. Her talk was titled, “The Impacts of the COVID-19 Pandemic on Global Food Systems.”
The COVID-19 pandemic is taking place in the midst of several other ongoing crises, including a locust infestation in dozens of countries, several large-scale extreme weather events, conflicts in many regions, and the current displacement of 79.5 million people worldwide. The global food system was already under strain prior to the pandemic. Despite a UN commitment to end hunger and malnourishment by 2030, an estimated 690 million people were hungry and 2 billion were malnourished in 2019. Population growth is an ongoing concern, especially as the climate crisis remains urgent. By 2050, the global food system will need to support a global population of nearly 10 billion, at the same time as countries will need to make changes to their agricultural systems and land use in order to achieve their commitments to reduce emissions under the Paris Agreement. On top of these immense pre-existing challenges, the COVID-19 pandemic has exposed countless deficiencies in our food system.
Supply Impacts
The pandemic has created a shock for food systems around the world both on the supply side and the demand side. This differs from many previous food crises, like the 2008 food price crisis, which were largely supply shocks. Giertz described the ways that the pandemic has caused disruptions on both sides, beginning with the food supply.
Already early on, the pandemic caused agricultural labor shortages in both low and high-income countries. Agriculture is a highly mobile sector that relies heavily on migrant workers. As countries started shutting down and restricting mobility, labor shortages resulted. Lockdowns also interrupted many farmers’ access to markets. As a result, there were significant losses of fresh produce and animal products like eggs, especially in developing countries. However, this also occurred to a lesser extent in high-income countries like the United States. In these countries, restaurant demand decreased drastically and interrupted the highly organized supply chains that many farmers participated in. It is unclear if the breakdowns of these supply chains will have an impact on production in the medium-term but it is possible that farmers may be reluctant to take the risk of producing perishable foods going forward, having gone through this experience.
Retailers have reported problems with certification bodies for environmental, labor, and quality standards because certain controls have not been possible. This may also affect food quality and environmental and social standards for food production in the medium-term.
Input markets are an area of concern in the upcoming planting season. Giertz noted that in many countries, farmers reportedly do not have access to inputs and, in some cases, input markets are not functioning at all. However, early production data for the next season is positive. In the Q&A session of the round table, Giertz noted that early concern over input markets drove distribution of inputs by the governments, which may account for some of this discrepancy. Nevertheless, it is still early to project agricultural output for the coming year or exactly what impacts COVID-19 will have on food production in 2021.
In many places, migrants have been returning to rural areas during the pandemic. Giertz noted that there in some countries there have been concerns about the decline in remittances along with the potential increased pressure on land resources. However, it is too early to determine the exact impact that this influx of return migrants will have on rural areas.
Cereal stocks remained high in 2020 despite the pandemic, and production was adequate to meet demand. This was true for maize, wheat, rice, and soybeans. International trade and global food prices also remained relatively stable despite early fears that price hikes would materialize on a global level. However, despite this relative stability at global level, serious food system disruptions have occurred within countries. For instance, food inflation has occurred locally in many places, mainly due to the disruption of supply chains. However, inflation has been especially pronounced in countries dealing with other challenges that affected inflation already prior to the pandemic. Other food systems disruptions have been related to supply chain interruptions, especially affecting the markets for and availability of perishable foods.
In general, fewer supply-side disruptions have been observed in the second wave of the pandemic because governments have been able to more effectively respond than they did in the spring of 2020. Labeling actors in the food sector as providers of essential services was one measure that helped to reduce disruptions. However, issues still occur. The food processing industry, for example, was deemed essential by governments, yet has seen disruptions due to the spread of the virus among workers.
Demand Impacts
Giertz then described the demand impacts that the pandemic has had on the global food system. This year, the pandemic has impacted the availability of safe and nutritious food for the most vulnerable populations. In many regions, food prices have increased locally. Combined with losses of incomes, livelihoods, and remittances, this has significantly reduced purchasing power for many people to buy food.
The interruption of supply chains has decreased the availability of many foods, especially perishable foods like fresh produce and animal products. This impact has been especially seen in urban areas. Further, in some countries, fresh markets were closed due to lockdown restrictions during the first wave of the pandemic, which cut off access to food for many poor consumers. However, more recently, this has become less of an issue as markets have generally been labeled essential services and have remained open during lockdowns.
Many school lunch programs have been interrupted due to school closures. This has had a large impact in many low and middle-income countries, but also in some areas of the U.S. School lunches often provide an essential meal with critical nutrients, for children from low-income families. Losing this source of nutrition can have serious impacts on children’s health and development.
COVID-19 has also revealed new vulnerabilities that are caused by the inability of the current food system to make healthy diets accessible for everyone: Chronic malnutrition increases individuals’ vulnerability to the COVID-19 virus, increasing the odds that they will become very sick if they contract the virus. This is the case for undernourished children, as well as obese and diabetic adults.
The decreased availability of nutritious food has caused food insecurity, malnutrition, and poverty to increase. It is estimated that between 83 and 132 million additional people will fall into acute food insecurity as a result of the pandemic. This has the potential to nearly double the pre-pandemic level of 135 million people.
This skyrocketing acute food insecurity is having especially dire impacts on children. Six million seven hundred thousand additional children may be wasted (a life-threatening form of malnutrition) this year, on top of the pre-pandemic level of 47 million children annually. Exact impacts on child stunting, a symptom of chronic malnutrition, are not clear at this time. However, reduction in nutrition and health services combined with increased poverty are likely to affect small children’s nutrition status for some time. This can have long-term impacts on their cognitive development and learning potential.
Extreme poverty is expected to rise for the first time in twenty years, with 88 – 115 million people becoming newly impoverished, mainly in sub-Saharan Africa and South Asia. The main drivers of this increase in poverty include losses of jobs within the informal economy as well as in manufacturing and construction. This increase in poverty is inevitably affecting people’s ability to purchase nutritious food.
The World Bank’s Response to COVID-19
Giertz then discussed the World Bank’s response to the pandemic. In total, the Bank has made available up to US$ 160 billion in financing for COVID-19 response through June of 2021. Over US$ 50 billion of this is International Development Association (IDA) resources, which goes to the World’s poorest countries.
In response to the crisis, the World Bank is presently financing emergency support operations in over 100 countries. Their crisis response is comprised of three stages – relief, restructuring, and resilient recovery under four main areas. The first area is saving lives, an effort mainly undertaken through the health sector. The other three involve support for food systems: protecting poor and vulnerable people, ensuring sustainable business growth and job creation, and strengthening policies, institutions, and investments. Between April and September of 2020, US$ 5.3 billion of funding was committed under IDA to support food security in the poorest countries, through social protection, agriculture and food processing, and other investments in the food system.
Examples of short-term measures in these food security and agriculture programs include: physical support to lower food import tariffs, which helps to alleviate supply chain disruptions; scaling up cash and food transfer programs; and investing in inputs for the next season’s agricultural production. Long-term measures supported by the World Bank include regenerating and increasing food system incomes to help address the shortfall of employment; building early warning systems; promoting climate-resilient productivity growth; building capacity for preventing pests and diseases in crops and livestock; and improving agricultural markets and enhancing natural resources management. The World Bank’s support is not only financial. It also provides governments with analytics and policy advice. Examples of areas where the World Bank is supporting with expertise include agriculture risk management, strategic food reserves, alternative feed and food sources such as insect production, and the One Health agenda, which works in the nexus between human and animal health to prevent emerging zoonotic diseases.
This pandemic has also changed how the World Bank works with projects and clients. It is preparing new models for preparing and supervising projects remotely. In most countries, interactions with their counterparts are currently virtual. They have almost 15,000 people connected worldwide, and almost overnight, all of them went virtual. That transition has gone relatively smoothly, and they have been able to focus their efforts on aiding governments in response to this crisis.
Our Food System After COVID-19
COVID-19 has shed a light on the parts of the food system which were not functioning, including supply chains which were vulnerable to disruption, high food prices, lack of access to food, and pre-existing chronic malnourishment. It has highlighted inequalities: the vulnerable, including the poor, the informally employed, and the malnourished are those that have been most severely impacted by this crisis. It is evident that the system needs to be more flexible, and that the supply chains for perishable foods, which are very important for nutrition, need to be strengthened. Insufficient data has also been a challenge, often making it difficult to get a complete overview of exactly how the food system and its actors are being affected on the ground..
The development community recognizes the need to “build back better” in response to the pandemic. This is especially important in the face of food production challenges such as a growing global population and a changing climate. Investing in solutions to these problems now is important. Another major disruption to the food system will inevitably occur in the future, and we must prepare for it now, making the food system resilient and protecting against the impacts that the COVID-19 pandemic has caused.
– Stephen Yaeger, RNRF Program Manager
To view Giertz’s PowerPoint Presentation, click here.
More information about COVID-19, food security, and the World Bank’s response can be found at the following links:
2020 Year in Review: The impact of COVID-19 in 12 charts
How the World Bank Group is helping countries with COVID-19 (coronavirus)