Rashid's Blog: A Place for Inquisitive Souls

Guest Post by Sanober Naheed 

 Food Security is a complex issue and has been a major concern for human populations struggle against hunger and malnutrition. Diseases and plagues have been divine scourges of inadvertent magnitudes to correct a nation of heretics as believers put it and skeptics deny.

As the world is struggling to contain the coronavirus, there have been speculations among the economic circles on the enormity of the damage caused to the global economy, food security and efforts to reduce poverty. The economic impacts resulting from earlier viral outbreaks of SARS, avian flu and MERS, which had caused direct damage to livestock sectors, eventually leading to food shortages and food price hikes in affected areas. In the present situation, no such major food shortages have occurred, but there have been reports of panic buying from several European countries, which again needs to be modified in a sustained manner in order not to hoard extra food to be discarded later.

The total shutdown of entire cities and regions to contain the spread of the virus has put a halt on economic activity, quarantining workers and idling factories and many services and many service activities. In an unprecedented move, the IMF and World Bank have decided not to hold their spring meetings virtually to avoid a large gathering of people and the spread of the virus. Going by the Organization of Economic Cooperation and Development (OECD) projection under the worst-case scenario, global growth could be cut in half, to 1.5% in 2020.

Already a food price hike and market panic is evident globally, which will further jeopardize food security. In an urban age, with higher population densities and hence greater risk of a person to person transmission, it is likely that the economic activity is being directly affected by social distancing efforts to contain the COVID-19. From this economic slow down it is expected to pose a major risk for food security and a tangible increase in the number of people living in poverty. Based on International Food Policy Research Institute’s (IFPRI) global model which has calculated that for 1% of economic slowdown the number of people living in poverty and also in food insecurity would increase by 2% or by about 4 million worldwide and affecting 9 million people living in rural areas of developing countries.

It is being considered too early to jump to such conclusions, to believe that the virus will have major direct impacts on the supply of staple foods. Yet they have sounded caution with regard to food security. The implications of such a slowdown for poverty and food insecurity depend on the assumptions made about the duration of the pandemic and transmission mechanisms.

Overall 1% lower growth in the world economy would translate into a global increase in the extreme poverty rate of between 1.6% to 3%. IFPRI analysis puts forth that the greatest regional poverty impact would fall on Africa south of the Sahara, where 40-50% of global poverty increase would be concentrated. The impact of a trade shock would affect Africa’s poor more than those in South Asia. Africa’s economy are on average more dependent on trade than those of South Asia’s, having a large but closed economy. The productivity shocks, in contrast, would be a bigger impact on poverty in S.Asia than Africa, because of the adverse impact in the Scenario on non-agricultural sectors, which have a larger weight in South Asian economies (IFPRI March 2020).

Global food security already faces challenges

Many countries around the world are in the grip of hunger and malnutrition, for the past three years due to conflicts and the refugee crisis, climate change, and worsening inequality, with the Middle East and Sub-Saharan regions being particularly vulnerable. According to the United Nations Food and Agriculture Organization (FAO), more than 820 million people across the globe are already suffering from hunger, close to 150 million children in countries around the world are stunted because of a lack of proper nutrition. COVID-19 is a health crisis. If proper measures are not in place it may unfold a bigger crisis in the form of food security.

Need to learn from previous epidemics

The SARS and MERS outbreaks had relatively little impact on the economy and food and nutrition security of China, including Hong Kong and Taiwan, largely due to the country’s resilience and ability to cope with emergencies. Countries such as Singapore, Vietnam, and Canada, too, showed such resilience, because they have enough food reserves and boast of vibrant value chains linking the domestic and international markets.

But Ebola had a huge impact on the economies of some African countries’ agricultural production, marketing, and trade. On the production side, due to road blockages, farmers had limited access to inputs such as seeds, fertilizers, and insecticides. And many of the regions faced acute labor shortages.

All this resulted in more than 40 percent of the agricultural land not being cultivated. As for marketing, farmers could not transport fresh produce to local and urban markets. In addition, day meal programs in schools were disrupted because food aid could not be delivered to the schools. And trade was disrupted as international shipping services were either delayed or canceled because crew members of cargo vessels refused to travel to those countries for fear of being infected.

Food prices will shoot up if nations panic again

The 2008 food price crisis, too, 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. If countries panic this time too, food trade and markets could be disrupted, albeit on a much larger scale.

The sharp rise in food prices was mainly caused by a combination of reduced cereal stocks, increased demand and the rising price of oil, increasing the cost of fertilizer and stimulating the production of biofuels in the US. By 2008, the number of hungry people in the world had increased to over 1 billion, up from 850 million in early 2007. Populations already affected by the crisis were the hardest hit. While globally the price of cereals had decreased, it remained high in many of these countries.

Governments around the world need to consider the scale and impact of the global food crisis on vulnerable populations, particularly city-dwellers – a neglected group in humanitarian response –subsistence farmers and pastoralists. Previous experience has shown how affected people reduced their food intake, changed their diet and reduced expenditure on basic goods such as health care and education, in some countries, migration, child labor and asset sales increased.

Conclusion

The COVID- 19 pandemic brings with it the third and greatest economic, financial and social shock of the 21st Century, after 9/11 and the Global Financial Crisis of 2008. This shock brings a halt in production in affected countries, hitting supply chains across the world, and a steep drop in consumption together with a collapse in confidence. The various measures being taken based on observations, although essential to contain the virus are pushing the economy further from where revival will be a daunting task.

The most urgent priority is to minimize the loss of life and health. The disruptions associated with the COVID-19 virus and the various responses to this pandemic are far more likely to adversely affect the poor and other marginalized groups with less power and resources to adapt to unpredictable crisis events. Not only will vulnerable populations and communities have greater difficulty accessing enough food for survival and adequate nutrition, but many also depend upon the food system’s stability for their livelihoods.

The COVID-19 crisis has laid bare stark weaknesses in our health care systems, from the number of intensive-care beds to the size of the workforce, the inability to provide enough masks and to deploy testing in some countries, and deficiencies in the research for and supply of drugs and vaccines. The real challenge comes from the lack of preparedness in the developing countries in the face of such a crisis which will put into question the ability of the system to tackle and deploy resources by streamlining management correctly. But only a combined, coordinated international effort will meet the challenge.

References:

1. Hickel, J. (2019), The Global Food Crisis Is Here, Foreign Policy, https://foreignpolicy.com/2019/08/21/the-global-food-crisis-is-here/
2. Hall, B. (2020), Coronavirus and the Implications for Food Systems and Policy, https://www.agrilinks.org/users/wbhall#profile-main

3. Vos, R. Martin, W. and Laborde,D. (March 2020), How much will global poverty increase because of COVID-19? IFPRI Blog : Issue Post, https://www.ifpri.org/blog/how-much-will-global-poverty-increase-because-covid-19
4. Agrilinks Team (March 2020), Preventing Global Food Security Crisis under COVID-19, USAID.  https://www.agrilinks.org/post/preventing-global-food-security-crisis-under-covid-19-emergency