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KWR Special Report

Food Security and the Pandemic Threat: Risks and Impacts of COVID-19
By Dr. Scott MacDonald

New York (KWR) June 29, 2020 – In late April 2020, the World Bank provided an emergency infusion of $9.5 million to support Haiti’s food security, which was already tenuous before COVID–19. Nearly 35% of Haiti’s population of nearly 11 million people already needed food support before the crisis. Add this to the fact the local agricultural sector supplies up to 45 percent of Haitian food needs and one can see where the impact of COVID–19 and agriculture and supply chains intersect. The situation takes on another layer of complexity when considering that the U.S. is the major source of food and supply chains slowed the flow of food in March and April.

But the issue of food security is not limited to Haiti. The issue of food security in the age of COVID–19 touches large swaths of the developing world and has also impacted advanced economies, like the United States, Europe and Japan. Prior to the pandemic, global food security was becoming more challenging due to the following factors:

• Wars in Syria and Yemen that destroyed agricultural infrastructure and displaced millions of people
• Parts of Africa have been hit by drought
• Locust swarms in East Africa were and are still destroying thousands of acres of farmland
• Natural disasters and climate change are causing problems as well.

Enter COVID–19

To get some idea of the impact of COVID–19 on food security David Beasley, head of the UN’s World Food Programme stated in April 2020: "At the same time while dealing with a COVID–19 pandemic, we are also on the brink of a hunger pandemic...This sounds truly shocking but let me give you the numbers: 821 million people go to bed hungry every night all over the world, chronically hungry, but...there are a further 135 million people facing crisis levels of hunger or worse. This means 135 million people on earth are marching towards the brink of starvation. But now the World Food Programme analysis shows that, due to Coronavirus, an additional 130 million people could be pushed to the brink of starvation by the end of 2020. That’s a total of 265 million people."

While much of what Beasley is talking about is in the developing world, the U.S. and other advanced economies are not immune. Anyone watching the evening news is seeing long, long lines at food kitchens throughout the country. As the economic squeeze has tightened, food has become a bigger issue. With 40 million people unemployed (around 15 percent of the work force), more families will see household budgets stretched even further – will they be able to afford a roof above their head and food on the table? According to the non–profit organization Feeding America, 54 million people in the U.S. are at risk of going hungry, including 8 million children.

Why is it that so many people are going hungry, while farmers are destroying food? As this played out in the media, it points to a major structural change caused by COVID–19. Prior to COVID–19 – much of the food produced in the U.S. was destined to end up in restaurants, entertainment venues and schools. COVID–19 shut down a massive segment of business for agricultural producers, without distribution networks to where demand existed – to households. There were efforts to change this, but it was slow. To put it simply, there was a disconnect between people waiting to get food and keep away hunger – and farmers killing their animals or throwing away products before they spoiled.

Another impact of COVID–19 on advanced economies was the shutting of borders – as many agricultural sectors depend on migrant labor. In Europe, Romanians and Bulgarians constitute a large transient work force involved in harvest time in France, Germany and the UK. When borders were shut there was a shortage of workers. In the U.S., the closing of the U.S. border reduced labor for harvests of fruits and vegetables.

And there were the unexpected consequences of closing borders. In the U.S. every year honey bees gather pollen and nectar from plants including berries, melons, broccoli and almonds, pollinating an estimated $15 billion worth of crops every year (according to the Department of Agriculture). Although no one probably could have foreseen the linkage between COVID–19 and bees, the Financial Times Emiko Terazono and Benjamin Parkin noted in April 2020: "Both the U.S. and Canada, which need a large number of of bees, import queen bees and other bees from Australia, New Zealand, Mexico and Chile. However, since many flights have been cancelled and airports closed, bee purchases have become impossible for some beekeepers." Add to this once in the country and operating, bee–pollinating teams had to stop for a 14–day quarantine after each action.

Another area hit hard by COVID–19 was in the protein production sector. As the pandemic gained momentum it eventually reached slaughterhouses, where working conditions proved conducive to transmission – workers standing close to each other, a prolonged absence of protection, and many times, the same workers sharing living accommodations. Most major companies were also slow in responding to the situation.

The impact of COVID–19 in the U.S were:

• Shortages of certain types of meat (finer cuts of beef went into hamburger) and public concern grew;
• The Trump administration eventually signed an order under the Defense Production Act to compel meat processing plans to remain open amid the pandemic.
• The meat processing industry has been forced to redesign how it approaches meat processing facilities and more sloppy practices have given way to deep cleanings and remaking workstations. Challenges to worker safety still exist, but there is movement toward a different work environment.

In the U.S. and Europe another factor may be a change in household behavior. We have seen dining out fall off a cliff and food preparation has returned to households (baking is up hugely – just try finding yeast in some parts of the country!).

• The COVID–19 shock to food security is likely to place a greater emphasis on building up of the family pantry – a push to buy more canned goods, lentils and related foods and long–lasting milk like Parmalat.
• While the more affluent parts of the U.S. and European populations can still look to buy healthier and eco–friendly foods, the less affluent will be more limited to what is available, reinforcing earlier trends to more heavily processed and cheaper foods – which are not necessarily healthy.
• It will take time to climb back to the same levels of food imports in advanced economies (as with cheese, wine and ethnically–oriented foods) due to transportation challenges.

While the above–mentioned items are important, they are probably less important than the issue which we pointed to in the beginning, the impact of COVID–19 on food security in the developing world, where the farm–to–household system is that much more fragile. In particular, the challenge is to keep food flowing from food–exporting countries to food–importing countries. This is particularly important with the three most widely consumed staples – rice, wheat and maize/corn.

The good news is that global production levels are at or near all–time highs. The bad news is twofold – prices of certain cash crops – an important source of rural income – have been depressed by slowing global demand. The World Bank and other multilateral organizations have been very proactive in stressing the importance of keeping a line of communication between food exporters and food importers. This could be complicated by worries over supply and pricing in countries with food surpluses.

The last round of food shocks in the international system was not necessarily caused but food scarcity, but by the fear factor. In 2007–2008 food prices rose, helped along by rising Chinese demand, the diversion of corn to produce ethanol and a greater role of financial institutions trading in agricultural commodities.

However – the main cause of the food price spike was food exporting countries moving to protect their consumers from price inflation at home by taking measures to restrict food exports. The following countries opted to restrict selected food exports: Argentina (wheat); Cambodia (rice); China; India (various rices); Indonesia (palm oil); Russia (wheat); and Vietnam (rice). The result was higher prices, food shortages in some countries and social instability in still others.

Food prices rose again in 2010–2011, partially caused by a drought in Russia and Ukraine, which once again stimulated importers to accelerate their usual buying in anticipation of an export ban. In 2012 international food prices remained high. This time the cause was a drought in the United States which hurt corn exports.

The price rises in 2010–2012 left a sense of vulnerability in many developing countries, including North Africa. Although food price pressures did not cause the Arab Spring that broke out in Tunisia in January 2011 and spread through Egypt and into the rest of the Arab world, they helped set the stage.

Looking into the immediate future, the words of Amber Rudd, who served as Home Minister, Home Secretary in the United Kingdom, help provide some perspective: "Famines are political. We all know that the immediate response to a famine must be food, aid and shelter, but we should also look hard at what else can be done earlier on. It is not the lack of foods but the fact that some people cannot get access to the food that causes the famine."

Looking ahead, four things should be considered:

1. COVID–19 has brought the food security issue more front and center, in part because the impact has hit both advanced and developing economies. Despite certain governments being more inclined to unilateral policies, the food security issue underscores the need for better international coordination;

2. Food security will remain on the psyche of people in advanced countries for a long time, perhaps leading to people behaving more like the generation of the 1930s in terms of developing deeper pantries for more challenging times;

3. If nothing else, COVID–19 has reminded us that despite all of our progress as a species on the planet, we still have considerable vulnerabilities. A major food crisis in the developing world will only come if policies are bungled in some countries and the fear factor dictates direction; such a crisis will have ripples into the advanced economies in terms of refugees, a reduction of trade and geopolitical tensions.

4. Policymakers and businesses need to give greater thought to digitalization. Simply stated, digital technology enables farmers and other people to connect with institutions and information that eventually helps in decreasing risk and uncertainty with access to markets, data, and financial services. With the help of specific digital technologies, the efficiency of fertilizing, planting, harvesting and selling products increases.

Policymakers need to be on top of the food security issues like never before. The downside could be substantial. Frederick Douglas, an American social reformer, abolitionist, orator and statesman once stated, "If there is no struggle, there is no progress." COVID–19 clearly represents a struggle, but there is plenty of work ahead to be done to make progress.

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KWR International Advisor

Editor: Dr. Scott B. MacDonald, Sr. Consultant

Publisher: Keith W. Rabin, President

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