While COVID-19 is first and foremost a health crisis, efforts to control the fallout from the virus have led to border controls on farm workers and encouraged some countries to impose export restraints on particular agricultural products. While the border control dimension to the problem is new, the world has in recent years gone through a number of situations where large numbers of countries have imposed export restraints on core agricultural products in an effort to ensure adequate supplies at home. The results are never positive for the global community and particularly harm the least developed countries and those dependent on imported food products.
For example, in 2007-2008, there were dozens of countries that imposed export restraints on specific items such as rice or wheat leading to massive price spikes and shortages of product available to countries dependent on imports. The nature and extent of the problem was outlined in a paper I prepared back in 2008 which is embedded below.GDP
The crisis led to coordinated efforts by the various UN organizations to find solutions and ways of avoiding repeats moving forward. A policy report from multiple UN agencies was released on 2 June 2011, Price Volatility in Food and Agricultural Markets: Policy Responses.igo_10jun11_report_e
Unfortunately, a number of countries in reacting to the COVID-19 pandemic have introduced export restraints on certain food products. Russia, Ukraine, Kazakhstan, and Vietnam are some of the countries identified so far as introducing export restraints on selected agricultural products. In the past, export restraints by some have led to export restraints by many. The possibility of rapidly expanding restraints by trading nations is obviously a major concern and major complication to the global response to COVID-19.
Equally troubling are the potential challenges to agricultural product availability in countries that rely to some extent on temporary foreign labor to harvest produce and other products where border measures are restricting access of foreigners to reduce the potential spread of COVID-19. Coupled to that are concerns about whether imported agricultural products meet health and quality needs and any changes in approach to those issues during the pandemic.
As one example of the farm labor concern, the United States is a country that relies on temporary farm workers from outside of the country and has significant restrictions on the entry of foreign nationals from many areas at present. U.S. farmers have raised concerns about the availability of sufficient migrant labor to harvest the fields when product is ready. How the issue gets resolved in the United States is not yet clear. But the same or similar challenges will apply in any country where imported farm labor is important to the harvesting, processing or transporting of agricultural products.
That these multiple potential issues on agricultural goods trade are escalating can be seen in yesterday’s joint statement from the WTO, WHO and FAO. The joint statement is available on the WTO webpage, https://www.wto.org/english/news_e/news20_e/igo_26mar20_e.htm, and is reproduced below:
“Joint Statement by QU Dongyu, Tedros Adhanom Ghebreyesus and Roberto Azevêdo, Directors-General of FAO, WHO and WTO
“Millions of people around the world depend on international trade for
their food security and livelihoods. As countries move to enact measures
aiming to halt the accelerating COVID-19 pandemic, care must be taken
to minimise potential impacts on the food supply or unintended
consequences on global trade and food security.
“When acting to protect the health and well-being of their citizens,
countries should ensure that any trade-related measures do not disrupt
the food supply chain. Such disruptions including hampering the
movement of agricultural and food industry workers and extending
border delays for food containers, result in the spoilage of perishables and increasing food waste. Food trade restrictions could also be linked
to unjustified concerns on food safety. If such a scenario were to
materialize, it would disrupt the food supply chain, with particularly
pronounced consequences for the most vulnerable and food insecure
“Uncertainty about food availability can spark a wave of export
restrictions, creating a shortage on the global market. Such reactions can
alter the balance between food supply and demand, resulting in price
spikes and increased price volatility. We learned from previous crises
that such measures are particularly damaging for low-income, food-deficit
countries and to the efforts of humanitarian organizations to procure food for those in desperate need.
“We must prevent the repeat of such damaging measures. It is at times like this that more, not less, international cooperation becomes vital. In the midst of the COVID-19 lockdowns, every effort must be made to ensure that trade flows as freely as possible, specially to avoid food shortage. Similarly, it is also critical that food producers and food workers at processing and retail level are protected to minimise the spread of the disease within this sector and maintain food supply chains. Consumers, in particular the most vulnerable, must continue to be able to access food within their communities under strict safety requirements.
“We must also ensure that information on food-related trade measures, levels of food production, consumption and stocks, as well as on food prices, is available to all in real time. This reduces uncertainty and allows producers, consumers and traders to make informed decisions. Above all, it helps contain ‘panic buying’ and the hoarding of food and other essential items.
“Now is the time to show solidarity, act responsibly and adhere to our common goal of enhancing food security, food safety and nutrition and improving the general welfare of people around the world. We must ensure that our response to COVID-19 does not unintentionally create unwarranted shortages of essential items and exacerbate hunger and malnutrition.”
There is little doubt that COVID-19 is placing extraordinary strains on countries, their peoples, their economies and the ability and willingness to act globally as opposed to locally. The strains and how the world reacts will shape the world going forward and determine the magnitude of the devastation that occurs in specific markets and the broader global community.
The UN report released yesterday, Shared responsibility, global solidarity: Responding to the socio-economic impacts of COVID-19, and the statement from UN Secretary-General Antonio Guterres outline the enormity of the global challenges and a potential path to a better future. See https://news.un.org/en/story/2020/03/1060702; https://reliefweb.int/sites/reliefweb.int/files/resources/sg_report_socio-economic_impact_of_covid19.pdf.
The global health emergency is significantly worsened by the introduction of food security issues. Despite a better understanding of the causes and necessary approaches to minimize food security issues, the world has a poor track record on working for the collective good in agriculture when fears of food availability arise. An eruption of export restraints at the time of the global COVID-19 health crisis could indeed undermine societal stability.