Author: Vedran Obućina

Analyst, journalist specializing in the Western Balkans and Middle East domestic and foreign affairs

The pandemic may result in the food shortages

It is becoming increasingly clear that in the H2’20 there will be a significant shortage of agricultural products on the world market due to broken supply chains. Prices are expected to rise in the summer or autumn, but also shortfalls are expected.
The pandemic may result in the food shortages

March 2020, Melbourne, Australia (Christopher Corneschi, CC BY-SA 4.0)

Depending on the development of the epidemic situation, all countries will try to provide enough food and supplies for themselves, including a ban on exports of certain products. It seems that in the last two or three weeks many European societies have not talked about it. Now is the sowing period and, if Europeans fail to plant everything that can be planted, pessimistic outlooks will prevail. Public space is full of talk of cafes, restaurants and hairdressers, as these are activities that carry a huge health risk but are not important for the overall national budget. Europeans are exhausted on the wrong things.

When European supermarkets were packed and cucumbers and strawberries arrived in January, few heeded warnings that the global concept of food production and distribution was threatened by disaster. “Rich countries have so far had the false feeling that food is always available to them from all over the world, as long as they have money, but such an assumption proves to be very risky in times of crisis like this,” commented for Guardian British agricultural policy expert Tim Lang. British citizens are now advised to turn lawns into “victory gardens”, as in times of food shortages after the World War II. Driven by fears that they will run out of fruits and vegetables imported from the European south, most affected by the virus, the Brits are seriously discussing the need for more arable land and a return to domestic production.

The United Nations Food and Agriculture Organization (FAO) has warned of potential food shortages in the world, as some countries have introduced protectionist measures, including a ban on exports of certain products to meet growth, as part of measures to combat the COVID-19 pandemic. „The worst that can happen is for governments to restrict the flow of food,” Maximo Torrero, the FAO’s chief economist, told The Guardian at the end of March, adding that „we may soon face the consequences of such moves.”

“Food nationalism” has started, countries are closing down: Serbia is stopping the export of sunflower oil, Russia has suspended exports of buckwheat and other cereals on March 20th, and neighboring Kazakhstan has followed the Russian example and imposed restrictions on exports of wheat flour, buckwheat, sugar, several vegetables and sunflower oil. Vietnam stopped exporting rice. The British regret that they have destroyed the network of local infrastructure for the supply of home-made food with imports. Experts interpret this as a psychological response to the crisis, which is not caused by a lack of food, but by fear, and in fear, people do not listen to the call for solidarity. Judging by the empty shelves, the citizens of the countries where most foods were bought and the most were thrown away are in the greatest fear. Now, when some countries are loosening strict protective measures, they are starting to think about how much the coronavirus will change the world, especially their table.

The pandemic’s impact on agriculture and food processing

The impact of COVID-19 is particularly highlighted by the considerable number of outbreaks of COVID-19 among employees of meat factories. Bovine meat slaughter in most European countries fell drastically in February 2020, on average of 12,3 per cent. Only Albania and Montenegro succeeded to be in surplus, while every other country experienced a large drop in meat production, particularly Bosnia and Herzegovina (29 per cent), Hungary (26 per cent), Malta (25 per cent) and Germany (21 per cent).

Another problem is that some countries now lack the manpower to harvest crops, partially due to the closure of borders and isolation measures and restrictions on movement. As the coronavirus was ravaging Europe, farmers in France, Spain and Italy point to the problem that fruits and vegetables will ripen quickly and remain rotten if the situation does not change. Strawberry growers were facing this problem, and a similar situation may befall the producers of lettuce, tomatoes, onions and peas. „The coronavirus affects the workforce and logistical problems are becoming an increasingly important issue,” Mr. Torrero said. He added that special measures should be introduced to maintain the food supply chain. As far as the European Union itself is concerned, the first estimate of exports of goods outside its borders amounted to EUR125.4bn, which is a decrease of 28.2 per cent compared to April 2019, when it amounted to EUR174.7bn. Imports from other parts of the world amounted to EUR125.1bn (down 22.7 per cent). This almost melted the EU’s trade surplus with the world, dropping to just EUR200m, up from EUR 12.9bn last April. The value of intra-EU trade fell by 32 per cent in April to EUR175.2bn. From January to April 2020, exports of goods outside the EU fell to EUR638.2bn (down 8.3 per cent), and the same happened with imports, which fell to EUR590.5bn. As a result, the European Union recorded a surplus of EUR47.7bn, compared to the same period in 2019. Intra-EU trade fell 10.2 per cent.

In order not to ruin tons of grain in the fields, Germany, which is short of about 300,000 workers, has opened a special website to bring together farmers who have this problem and those who can help. Students and those forced not to work due to company closures, for example in the services sector, are welcome to join the initiative.

Food supply chains

Ordinary citizens contribute to the increased shortage by creating food stocks in quantities that cannot be eaten before their expiration date. Panic shopping is only deepening the crisis, the FAO concluded, telling people to avoid throwing away food. Measures taken by countries around the world in response to COVID-19 must not create an unjustified shortage of basic items and exacerbate hunger, warned the FAO, but also the World Health Organization (WHO) and the World Trade Organization.

“To protect the health and well-being of their citizens, countries should ensure that all trade-related measures do not disrupt the food supply chain. Such disturbances, including disrupting the movement of agricultural and food industry workers and prolonging border delays for food containers, resulting in spoilage of perishable products and an increase in food waste. Restrictions on food trade may also be associated with unjustified food safety concerns. If such a scenario were to materialize, it would disrupt the food supply chain, with particularly pronounced consequences for the most vulnerable populations, ” the FAO, WHO and WTO leaders said in a statement.

Disruption in food production and supply inevitably affect prices. Certain high-demand foods become very expensive, while other products lose their value due to a lack of interest and consumption. In March 2020, EU prices of pork rose 13,6 per cent, fruit 7,8 per cent, meat in general 6,8 per cent, sugar 5,8 per cent, fruit and vegetable juices 1,6 per cent, milk, cheese and eggs 1,6 per cent, eggs 1,5 per cent, potatoes 1,1 per cent, and vegetables 1,1 per cent. But prices dropped for oils and fats -2,1 per cent, butter 3,5 per cent and olive oil 4,9 per cent. These figures are understandable. The population is keen to have healthy and vitamin-rich products and protein-rich meat. On the other hand, the COVID-19 lock-down downsized demand for oils, fats, butter and olive oil because these are used in bigger quantities in the hospitality sector.

Food industry workforce

Importance of small producer is again accentuated. According to Eurostat, in 2019, 18 million people (9 per cent of total employees) aged 20 to 64 decided to become self-employed. Almost a fifth of them work in agriculture, forestry and fishing (19 per cent), followed by retailers and wholesalers. Among EU member states, in 2019, Greece recorded the largest share of self-employed (21 per cent of total employment), followed by Italy (15 per cent), Poland and Romania (both 14 per cent).

Some governments, including French, want to promote short supply chains, i.e. a form of marketing of agricultural products with few intermediaries. This sale is made either directly from the producer to the customer (sale at the farm, on the markets), or indirect: the producer goes through an intermediary or a collective point of sale. Public awareness of environmental issues tends to promote short circuits at the expense of supermarkets. The government is also working on this issue and aims to make greater use of short supplies: for example, it has announced that at least 50 per cent of school meals should operate in short supply by 2022. During the lockdown, the French changed their consumption habits (the bars, restaurants and shops being closed). Direct sales were, therefore, more popular than usual (30 per cent more customers). Short supply chains benefit everyone: the producer gets fair economic opportunities, the consumer eats better and knows how what he buys is produced, and agriculture as a whole becomes more resilient, more supportive and more environmentally friendly.

Looking for solutions

Several economists suggest what to do in a short-term, at least until autumn, which is going to be a very challenging time for food security in Europe. Agriculture is strategic at the moment, and for a start, the normative framework should be changed and it should be possible to cultivate all agricultural land regardless of the holder. Furthermore, rural households should be encouraged to produce food at least for their own needs. But in many Central and Southeast European countries there is none, because the peasants stopped cultivating the land.

Veterinary conditions for keeping and slaughtering cattle should be relaxed. Instead of maintaining unsustainable compensation for keeping jobs in cafes, restaurants and hotels, which can be said to be unlucky in terms of work this year and nothing can drastically change, much public spending should be directed to the sector of food production, agriculture and care for the elderly. Energy and resources should be transferred to key sectors and companies. Seasonal jobs in agriculture are now coming and this should be the main guiding idea. Furthermore, companies dealing with energy, transit, security are important for the state, but also are companies that supply the population with food. The fiscal space for interventions is not unlimited and should not be spent on what is not necessary.

Immediately after such a sustainable structure is made, one should focus on reorganizing European agriculture. Tomorrow’s food chain must include solutions for farmers that create jobs, as well as innovations: upgrading vegetable growing areas, agroforestry, conservation tillage, short supply chains and innovative alternatives to conventional products. A visionary food policy requires not only defending yesterday’s economic interests but above all creating a place for those of tomorrow, suggest some French economists.

EU is also reconsidering its agriculture policies, generally one of the most difficult negotiating space in European integration. The President of the European Commission, Ursula von der Leyen, proposed in May a Fund for economic recovery from the COVID-19 virus pandemic worth EUR750 bn and the Multiannual Financial Framework (MFF) for EUR1,100bn. „The recovery plan is a huge challenge and turns it into an opportunity and an investment in the future. The European Green Plan and digitization will drive jobs and growth, the resilience of our societies and the health of the environment,” Ms. von der Leyen said.

The European Green Plan is now the direction to go, agreed the EU Ministers of Agriculture, joined by two Commissioners of the European Commission, Janusz Wojciechowski for Agriculture and Stella Kyriakides for Health and Food Safety, in a video conference in June. „We have gathered to exchange views and hear some of the Commission’s responses to two communications released recently. The Field-to-Table and EU Biodiversity Strategy 2030 strategies will play a key role in implementing the Europe Green Agreement and the Recovery Plan. More importantly, today we discussed the link between the various processes and the alignment between the reform of the Common Agricultural Policy and the Green Agreement. We need to assess the potential contribution of the agriculture, fisheries and forestry sectors to the goals set in both strategies” the ministers agreed at the video conference. Their goal was to encourage a holistic approach to the European Green Agreement and start an open debate on the different ideas, visions and needs of all citizens. Ministers also emphasized that there were significant differences in the starting positions of the Member States that should be considered and that a uniform approach should be avoided. They pointed out the need to define how to assess the effects and monitor progress by individual sectors, as well as the need to use uniform and accurate data that would be comparable and equivalent.

From the very beginning of his term as Commissioner for Agriculture and Rural Development, in his public appearances, as well as in talks with politicians, organizations and farmers, Mr. Wojciechowski emphasized the strategic importance of agriculture and the Common Agricultural Policy for ensuring food safety in Europe. „In the last six months, I have emphasized the importance of providing financial support to the CAP and the agricultural sector because only our farmers can lead us to achieve green ambition and sustainable agricultural production,” Mr. Wojciechowski said earlier in June. He pointed out that the new, revised proposal of the multiannual financial framework for the period 2021-2027 increased CAP funding. A total of EUR391bn has been proposed for agriculture and rural development. „Farmers will be happy to be given the means to continue food production more sustainable, especially in these difficult times. The new resources will also make the sector more resilient to externalities while having an advantage over the external market and its strong competition. Food safety needs to be the highest priority „, he added.

Vedran Obućina is an analyst and a journalist specializing in the Croatian and Middle East domestic and foreign affairs. He is the Secretary of the Society for Mediterranean Studies at the University of Rijeka and a Foreign Affairs Analyst at The Atlantic Post.

March 2020, Melbourne, Australia (Christopher Corneschi, CC BY-SA 4.0)

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