research
a466247690
COVID-19andglobalfoodsecurity.pdf
COVID-19
& SECURITY
FOOD
GLOBAL
EditEd by
Johan Swinnen
& John McDermott
COVID-19
& GLOBAL
SECURITY
FOOD
EditEd by
Johan Swinnen
& John McDermott
Copyright © 2020 International Food Policy Research Institute (IFPRI).
This publication is licensed for use under a Creative Commons Attribution 4.0 International License
(CC BY 4.0). Subject to attribution, you are free to share (copy and redistribute the material in
any medium or
format), adapt (remix, transform, and build upon the material) for any purpose,
even commercially.
Third-party content: The International Food Policy Research Institute does not necessarily own each
component of
the content contained within the work. The International Food Policy Research Institute
therefore does not warrant that the
use of any third-party-owned individual component or part
contained in the work will not infringe on
the rights of
those third parties. The risk of
claims resulting
from such infringement rests solely with
you. If you wish to re-use a component of
the work, it is
your
responsibility to determine whether permission is needed for that re-use and to
obtain permission
from the copyright owner. Examples of components
can include, but are not limited to, tables,
figures, or
images.
This book has not been peer reviewed. Any opinions stated herein are those of the author(s) and are not
necessarily representative of or endorsed by the International Food Policy Research Institute (IFPRI).
The boundaries, names, and designations used in this publication do not imply official endorsement
or acceptance by the authors, IFPRI,
or its partners and donors.
International Food Policy Research Institute
1201 Eye Street, NW
Washington, DC 20005-3915 USA
www.ifpri.org
ISBN: 978-0-89629-387-8
DOI: https://doi.org/10.2499/p15738coll2.133762
Photo credits
Cover: Prabhat Kumar Verma/Shutterstock.
Chapter images: p.6 Prabhat Kumar Verma/Shutterstock; p.13 Atul Loke/Panos;
p. 14 suprabhat/Shutterstock; p. 36 Atul Loke/Panos; p.50 Mohsen Nabil/Shutterstock;
p.63 Mg Si Thu/Shutterstock; p. 64
Sundarrajan D/Shutterstock; p.75 Sylvain Cherkaoui/Panos;
p.76 Andy Johnstone/Panos; p.86 Atul Loke/Panos; p.95 Stockpexel/Shutterstock;
p.96 Prabhat Kumar Verma/Shutterstock; p.122 Jun Pinzon/Shutterstock.
Design and layout: Jason Chow
Project manager: Pamela Stedman-Edwards
Contents
PREFACE 5
Johan Swinnen and John McDermott
INTRODUCTION 7
1. COVID-19: Assessing impacts and policy responses for food and nutrition security 8
Johan Swinnen and John McDermott
FOOD SECURITY, POVERTY, AND INEQUALITY 15
162. Poverty and food
insecurity could grow dramatically as COVID-19 spreads
David Laborde, Will Martin, and Rob Vos
203. COVID-19 is exacerbating inequalities
in food security
Johan Swinnen
4. COVID-19 lockdowns have imposed substantial economic costs on
countries in Africa 23
James Thurlow
5. How China can address threats to food
and nutrition security from the COVID-19
outbreak
Kevin Chen, Yumei Zhang, Yue Zhan, Shenggen Fan, and Wei Si
26
316. Assessing the toll of COVID-19 lockdown measures on the South African economy
Channing Arndt, Sherwin Gabriel, and Sherman Robinson
337. Addressing COVID-19 impacts on agriculture, food security, and livelihoods in India
S. Mahendra Dev
DIETS AND NUTRITION 37
388. The COVID-19 nutrition crisis: What to expect and how to protect
Derek Headey and Marie Ruel
429. COVID-19 is
shifting consumption and disrupting dairy value chains in Ethiopia
Agajie Tesfaye, Yetimwork Habte, and Bart Minten
10. Survey suggests rising risk of food
and nutrition insecurity in
Addis Ababa,
Ethiopia, as COVID-19 restrictions continue
Kalle Hirvonen, Gashaw Tadesse Abate, and Alan de Brauw
46
LABOR RESTRICTIONS AND REMITTANCES 5 1
11. Lockdowns are protecting China’s rural families from COVID-19, but the economic
burden is heavy
Scott Rozelle, Heather Rahimi, Huan Wang, and Eve Dill
52
5612. Economic impact of COVID-19 on tourism and remittances: Insights from Egypt
Clemens Breisinger, Abla Abdel Latif, Mariam Raouf, and Manfred Wiebelt
6013. Significant economic impacts due to COVID-19 and falling remittances in Myanmar
Xinshen Diao and Michael Wang
FOOD TRADE 65
6614. COVID-19: Trade restrictions are worst possible response to safeguard food security
Joseph Glauber, David Laborde, Will Martin, and Rob Vos
15. COVID-19 border policies create problems for
African trade and economic pain for
communities
Antoine Bouët and David Laborde
69
7316. COVID-19 lockdowns threaten Africa’s vital informal urban food trade
Danielle Resnick
SUPPLY CHAINS 77
7817. How COVID-19 may disrupt food
supply chains in developing countries
Thomas Reardon, Marc F. Bellemare, and David Zilberman
8118. Impacts of the COVID-19 crisis on vegetable value chains in Ethiopia
Seneshaw Tamru, Kalle Hirvonen, and Bart Minten
8419. Chinese livestock farms struggle under COVID-19 restrictions
Xiaobo Zhang
GENDER 87
8820. Why gender matters in COVID-19 responses — now and
in the future
Agnes Quisumbing, Neha Kumar, Ruth Meinzen-Dick, and Claudia Ringler
21. Why gender-sensitive social protection is
critical to the COVID-19 response in low
and middle-income countries
Melissa Hidrobo, Neha Kumar, Tia Palermo, Amber Peterman, and Shalini Roy
91
POLICY RESPONSES 97
22. Fiscal and monetary responses to the COVID-19 pandemic: Some thoughts for
developing countries and the international community
Eugenio Díaz-Bonilla
98
23. Social safety nets are crucial to
the COVID-19 response: Some lessons to boost their
effectiveness
Daniel Gilligan
102
10624. How India’s food-based safety net is responding to the COVID-19 lockdown
Devesh Roy, Ruchira Boss, and Mamata Pradhan
25. IFPRI’s COVID-19 Policy Response Portal: Identifying trends and implications for food
systems
Danielle Resnick
111
11526. Water in the COVID-19 crisis: Response, recovery, and resilience
Claudia Sadoff and Mark Smith
11827. Prepare food systems for a long-haul fight against COVID-19
Maximo Torero
THE FUTURE OF PANDEMICS AND FOOD SYSTEMS 123
12428. Africa’s growing risk of
diseases that spread from animals to
people
Bernard Bett, Delia Randolph, and John McDermott
12929. COVID-19 and the promise of
food system innovation
Corinna Hawkes
13230. COVID-19 and resilience innovations in food supply chains
Thomas Reardon and Johan Swinnen
CONTRIBUTORS 137
Preface
Johan Swinnen and John McDermott
COVID-19 first emerged in China in late 2019, and the country mobilized a major epidemic response
in January 2020, with stringent lockdowns and travel restrictions. The World Health Organization
declared a global pandemic on
March 11, and many countries soon began to
impose measures to
control the spread of the
novel coronavirus. Since then, the disease has taken hundreds of
thousands
of lives and disrupted the livelihoods
of billions
of people.
The International Food Policy Research Institute (IFPRI) started a blog series on COVID-19 in February,
first looking
at the implications of the pandemic and responses in China. In March, as the enormous
reach and potential impact of
the pandemic became clearer, IFPRI researchers and guest authors
began to look at its
global repercussions on
poverty and food and nutrition security. As the
emer
gency response phase began in many low- and middle-income countries
in the following months,
we continued to use this blog series to analyze COVID-19 impacts. Entries in this series report results
from continuously updated model assessments and innovative surveys — including phone surveys
of households and firms and key informant networks — for early assessments
of changes in food and
nutrition security. At this point, there are over 40
entries in
the COVID-19 series, and that number con
tinues to grow.
IFPRI researchers have also developed a set of
tracking tools that are publicly available. At the global
level, these include trackers for staple foods, notably on price volatility and trade. In some African
and South Asian countries, a daily food price monitoring system has been established in
several local
markets. To track and measure divergence in
public policy responses, IFPRI has established a coun
try-level COVID-19 policy response tracking system, a complement to the
World Bank’s social protec
tion tracker.
This e-book compiles a selection of entries from the IFPRI blog series on COVID-19. The pieces pro
vide key insights and analysis on
how the global pandemic is
affecting global poverty and food
security and nutrition, food trade and supply chains, gender, employment, and a variety of
policy
interventions, as well as reflections on
how we can
use these lessons to better prepare for future pan
demics. These pieces draw on a combination of conceptual arguments, global and country-level
simulation models, in-country surveys, case studies, and expert opinions. Together, they present a
comprehensive picture of the
current and potential impact of
COVID-19 and the policy responses to
the pandemic on
global food and nutrition security.
This book could not have come together without the editorial guidance of Pamela Stedman-Edwards
and the design work of Jason Chow.We are grateful to Drew Sample and John McQuaid, who provided
invaluable editorial support for the blog series from which this book is drawn, and support from all of
IFPRI’s Communications and Public Affairs Division, which made this work possible.
Finally, we dedicate this book to Rajul Pandya-Lorch upon her retirement. She has been a driving force
behind many IFPRI publications and enthusiastically supported the creation of
IFPRI’s blog series on
COVID-19 and the numerous associated virtual events. We will greatly miss her forward-looking leader
ship and strong commitment to IFPRI’s work.
5
6
INTRODUCTION
7
1. COVID-19: Assessing impacts and policy
responses for food and nutrition security
Johan Swinnen and John McDermott
COVID-19 has severely disrupted our lives, jeopardized the well-being of billions of people, and
raised the specter of a global food crisis, all in just a few months. The huge impact expected on the
world’s economy and on global food security has been described in
dramatic terms. The World Bank
forecasts that the global economy will shrink by more than 5%, which would be the deepest recession
since the Second World War. IFPRI researchers estimate that, in the absence of
strong interventions in
developing countries, the number of people in extreme poverty could increase by up to
150 million.
The World Food Programme’s executive director, David Beasley, has warned that the world is
“not
only facing a global health pandemic but also a global humanitarian catastrophe,” and that, without
action, COVID-19 could lead to “multiple famines of biblical proportions.” Lawrence Haddad, exec
utive director of GAIN, lamented that the
coming food and nutrition crisis is not only biblical but “on
steroids, and across generations.”
Why such dire predictions? COVID-19 may not be as
deadly as historical plagues or, more recently,
the 1918–19 Spanish flu or
Ebola, but it is
unpredictable and highly transmissible, including by peo
ple who are asymptomatic but infected. This makes it
difficult to control. Today’s interconnected
world has allowed the virus to spread with remarkable speed. On
January 9, 2020, China officially rec
ognized the first
death from COVID-19, and by early March more than 100 countries were reporting
cases (Figure 1). The number of
officially reported cases has continued to increase, topping 10 million
at the end
of June. Over this period, the virus epicenter has shifted from China
to Europe and the
United States, and now many poor countries and regions including Africa, Latin America, and South
Asia are facing rapidly rising infection rates and deaths.
More importantly, COVID-19 is a health crisis with multiple and widespread impacts on food
systems,
social systems, and economic development. The need to change daily practices and routines, many
essential to
livelihoods, and the consequent disruption of connections at
local, regional, and global
levels make the
COVID-19 shock different from economic and climate shocks. And compared with
previous pandemics, the much greater interconnection of
trade and markets today — and the more
complex nature of food, health, and economic systems — is amplifying the potential
of COVID-19 to
aggravate poverty and disrupt food systems. As
a result, the
impacts on
well-being will be large rela
tive to disease mortality rates.
The chapters in this book look across the
broad range of
impacts of this unprecedented crisis, provid
ing forecasts, evidence, analysis, and recommendations for more effective policy responses to sup
port food security. They draw on a combination
of conceptual arguments, global and country-level
simulation models, in-country surveys, case studies, and expert opinions. Key insights from the differ
ent contributions are the following.
8 IntroductIon
The virus infections and public health responses to control COVID-19 transmission have had severe
economic consequences. In an effort to control the disease, governments have imposed lockdowns
that have shuttered many businesses, restricted travel within countries, closed borders to human traf
fic and trade in some food products, and imposed social distancing requirements and curfews that
disrupt economic activity and force businesses and schools to close. The result has been economic
recession, with
spikes in unemployment, and major disruption of
food systems and supply chains, as
labor, transport, and trade are impeded.
The combined impact of recession and disruption is
especially detrimental for the poor, who have
been acutely affected by lost or
decreased incomes and remittances as the pandemic has led to
a
severe economic recession in many countries. Simulations predicted that the
poorest groups in soci
ety would see their relative incomes fall more than wealthier social groups, and early survey results
from Ethiopia confirm these predictions. Poor people, whose main asset is
their physical labor, have
also suffered the most from the effects of lockdowns. The case studies on China (interruption of
rural-urban migration), Egypt (declining tourism), and Myanmar (interruption of
international migra
tion) confirm that the
economic and poverty effects of
the fall in remittances due to lockdowns and
travel restrictions are huge. Disruption of some of the public programs they rely
on has aggravated
the differential impacts on the
poor. At
the same time, however, many governments have responded
with the introduction of new safety net programs
and expansion of existing programs that can offset
some of the lost income.
Women are likely to suffer more adverse impacts from
the crisis. Income shocks and lockdowns have
changed household and community gender dynamics and increased the
disadvantages faced by
women. Because of
the potential for gender bias in government policies responding to COVID-19,
it is
crucial that social safety net programs explicitly account for gender effects in order to mitigate nega
tive consequences during the
emergency response period.
The severe disruption of food systems — including restrictions on labor and interruption of
transport,
processing, retailing, and input distribution — threatens the food and nutrition security of the poor.
COVID-19 has exposed fragilities in food
systems, especially in labor-intensive systems, such as
those
for fresh fruits and vegetables. The breakdown of
supply chains due to
the virus infection itself and
a variety of
policy restrictions has caused consumer prices to increase and producer prices to
fall at
the same time, increasing food insecurity for both urban and rural poor. Many poor people also suf
fered as their employment in food supply chains — transporting, marketing, and selling
food — came
to a halt. A series of country simulations of
the food and economic sector impacts of
COVID-19 (ini
tial results are available for China, Egypt, South Africa, Myanmar, and India) show that income declines
in food services and processing have been particularly strong. Impacts on
farming itself are some
what less severe, as many small farmers rely on family labor. However, it
will be important to track the
extent to
which constrained access to key farm inputs and distorted prices affects investments in next
years’ production.
Early concerns over disruptions of
global supply chains focused on the introduction of several
trade constraints, in particular export bans in rice and wheat markets, by major exporting countries.
Such export bans and trade restrictions threatened to exacerbate global food supply problems.
Several of the initially introduced export constraints have since been removed. However, many other
COVID-related government restrictions are causing unnecessary problems, both for trade between
IntroductIon 9
TotalLimitedTotalThenumbertestingconfirmedconfirmedofconfirmedmeanscasesCOVID-19thatCOVID-19is lowerthethannumberthecasesnumberofcases
confirmedoftotalcases. casesThemainisreasonlowerforthanthisis thelimitedactualtesting.number of cases.
Africa
Oceania
10 million
South America
8 million
North America
6 million
4 million Europe
2 million
Asia excl. China
0 China
Jan 5, 2020 Feb 10, 2020 Mar 21, 2020 Apr 30, 2020 Jun 9, 2020 Jul 7, 2020
Source:Source: EuropeanEuropeanCDCCentre–Situation for
DiseaseUpdateWorldwidePrevention–LastandupdatedControl,7thJuly,Situation10:45(LondonUpdatetime)Worldwide,OurWorldInData.org/coronavirus July
7, 2020. • CC BY
◀2019 2020▶ Over 100 countries report
cases of COVID-19 7–8
JAN FEB MAR
28
38 countries
report insti
tuting travel
restrictions
11 UN Crisis Management Team
is activated
31 United States declares a domestic
public health emergency
30
9
WHO declares a public health
emergency of
international concern
13–20 Thailand, Japan, and South Korea
report first imported cases
China reports first death
linked to COVID-19
31 Chinese authorities first inform WHO of
pneumonia cases with unknown cause
Timeline of global COVID-19 outbreak
Confirmed cases of COVID-19
surpass 9 million globally
22
COVID-19 cases surpass 100,000on the African continent 21–22
UN Crisis Management Team warns
against lifting lockdowns prematurely 13
22
Outbreaks in Western Europe
stabilize, upward trends continue
in Africa, Central and South
America, and Eastern Europe
China lifts its lock
downon Wuhan 8
25 India
begins
lockdown
APR MAY JUN
Total confirmed COVID-19 deaths
Limited testing and challenges in
the attribution of the cause of death mean that the number of
confirmedmaynotbeandeathsaccuratemaycount ofnotthebetrueannumberaccurateofdeathscountfromCOVID-19. of the
true number of deaths from COVID-19.
Africa
Oceania 500,000
South America
400,000
North America
300,000
200,000
Europe
100,000
Asia excl. China
0 China
Jan 11, 2020 Feb 10, 2020 Mar 21, 2020 Apr 30, 2020 Jun 9, 2020 Jul 7, 2020
Source:Source: EuropeanEuropeanCDCCentre–Situation for
DiseaseUpdateWorldwidePrevention–LastandupdatedControl,7thJuly,Situation10:45(LondonUpdatetime)Worldwide,OurWorldInData.org/coronavirus July
7, 2020. • CC BY
developing countries and food marketing inside developing countries. In some countries, blanket
policy actions, such as market and trade restrictions and curfews, are impeding food supply chains,
while other countries were able to avoid these disruptions.
COVID-19 disruptions have also had negative consequences for long-term and hard-won progress on
nutrition. Disruption of livelihoods and food
supply chains means diets have become less healthy and
nutrition programming for the poor and vulnerable has been interrupted. A simulation points to sig
nificant global declines in more nutritious but more expensive products such
as fruits and vegetables
and dairy products. Early survey results from Ethiopia on the vegetable and dairy supply chains con
firm these simulation and expert predictions. Consumption
of healthy diet ingredients has declined,
and has declined most for the
poorest groups in
society. However, nutrition experts point to some
viable options for mitigating negative nutrition consequences and for actions to hasten recovery and
a return to the long-term positive trajectory of the past
decade.
There are also other positive signs. While many food systems have been significantly disrupted, oth
ers have been more resilient, with food supplies relatively unaffected. Government responses to the
crisis have varied widely, and some responses have had more positive effects than others. Innovation
is occurring
in many social programs and in NGO activities
to overcome
the constraints created by
government regulations and health programs. Likewise, innovations and entrepreneurship in private
food supply chains are helping to overcome obstacles and make food supply chains more resilient for
the future. One
example is the use of information and communications technology and e-commerce,
which is growing at a much faster pace than expected prior to the COVID-19 outbreak. The country
studies also predict significant economic rebounds in
several countries once the lockdown measures
are removed.
Looking forward, an intriguing question is about the next pandemics. In the
recent past, epidemic/
pandemic diseases have mainly emerged from Asia, but in the future disease emergence is
likely
to become more common and more disruptive in Africa as population densities, natural resource
exploitation, and economic and social integration increase dramatically. The lessons we learn from
COVID-19 should help us to design better policies and
to build more resilient and inclusive food sys
tems that limit the impact of
future pandemics.
This collection of short essays provides a fairly comprehensive overview of where we
are and what we
know about how COVID-19 is
affecting food security and livelihoods at the six-month mark. More spe
cifically, they provide a detailed look at
policy responses across the globe and how effectively they
are working, along with
recommendations for further innovations. In the
coming months, new sur
vey data, model simulations for
more countries, and better insights on
the spread of the virus, policy
impacts, and innovations in
public and private components of
food systems will no
doubt enhance
our understanding. The IFPRI COVID-19 blog series will continue to report on new insights and on
emerging issues, such as
country policy responses and balancing their effects on
health and econo
mies; investments in short- and long-term responses to
COVID-19 and their effects; reshaping food
trade and supply chains in the recovery phase to manage continuing COVID risks; and evolving
impacts on
poor and vulnerable populations and how
these can be monitored and mitigated.
12 IntroductIon
13
14
FOOD SECURITY,
POVERTY, AND
INEQUALITY
15
2. Poverty and food insecurity could
grow dramatically as COVID-19 spreads
David Laborde, Will Martin, and Rob Vos
Cases of COVID-19 worldwide are growing exponentially, with
major impacts on
global staple food
markets and poverty and hunger. On
March 10, the number infections had just passed 110,000 with
about 4,000 deaths. In the following month, the
number of people with
COVID-19 increased 20-fold
(to over 2 million) and the number of
deaths more than 30-fold (to over 135,000). The epicenter of the
pandemic shifted from China to Europe and then to the United States. The coronavirus is now spread
ing rapidly in low- and middle-income countries, many of which lack robust health systems or strong
social safety nets that can soften the pandemic’s public health and economic impacts.
More than half of the world population is currently under some form of social distancing to con
tain the health crisis. As
a result, millions of businesses have had to close shop. The International
Labour Organization anticipates 200 million workers could be thrown into unemployment. In the
United States alone, virtually overnight, 22
million people lost their jobs in early April. Governments
in Europe and the United States have promised unprecedented fiscal and monetary stimulus mea
sures to
compensate for the
income losses of businesses and workers and to contain an
inevitable
economic crisis. But the relief responses of
low- and middle-income countries have thus far been
more limited.
With COVID-19 and its economic fallout now spreading in the poorest parts of the world,many more
people will become poor and food-insecure. In a new scenario analysis, we estimate that globally, absent
interventions, over 140 million people could fall into extreme poverty (measured against the $1.90 pov
erty line) in 2020 — an increase of 20% from present levels. This in turn would drive up food insecurity.
A global health crisis could thus cause a major food crisis — unless steps are taken to provide unprece
dented economic emergency relief.
While considerable uncertainty surrounds the outcome, the world is very likely to face a deep reces
sion in 2020 — at
least as
severe as the
one following the global financial crisis of
2008–2009. A steep
global economic downturn has already set in. Even assuming a strong rebound in the second half
of the year on the back of unprecedented economic stimulus measures in the United States and
Europe, the economic damage in
major developed countries for 2020 is likely to
exceed that of the
Great Recession.
Using IFPRI’s global model, we examined some of the
likely impacts of the downturn for poverty
worldwide and regionally.
Under the
assumptions indicated in the box below, we project a downturn in global economic growth
of 5% in 2020. This projection
is broadly similar to
the recent IMF forecast, which shows a downturn
of
the world economy from the 2% to 3% growth anticipated pre-pandemic to an
actual decline of 3%.
16 Food SecurIty, Poverty, and InequalIty
table 1 COVID-19 global economic recession in 2020
PERCENTAGE CHANGE FROMBASE YEAR VALUES
Export of
goods (value
in constant
dollars)
Agrifood
exports
(value in
constant
dollars)
Agrifood
real value
added
Household
consumptionReal GDP
World −5.0 −1.0 −20.9 −1.8 −24.8
Developed countries −6.2 −0.1 −23.5 −3.1 −23.8
Developing countries −3.6 −2.5 −18.0 +0.1 −30.5
Africa south of Sahara −8.9 −3.2 −35.2 +3.9 −20.6
South Asia −5.0 −3.7 −27.1 −2.0 −30.7
Southeast Asia −7.0 −4.2 −27.7 −2.8 −31.9
Latin America −5.9 −4.4 −30.8 −3.9 −28.5
Source: Authors, based on simulations with
MIRAGRODEP model, April 2020 IFPRI global reference scenario.
Our scenario, however, indicates that the poorest nations face significantly greater adversity. The reces
sion that has already started in Europe and the United States is projected to depress economic activ
ity across developed countries by 6%
on average in 2020, despite an expected rebound later in the
year as social distancing measures are lifted and stimulus measures take effect. This recession will spill
over to the rest of
the world through lower demand for trade and lower commodity prices. Developing
economies will be hurt by the economic fallout caused by their own social distancing measures and by
increased morbidity affecting the labor supply for farming and other business activity.
For developing countries as a group, the economic fallout would lead to a decline of their aggregate
GDP of 3.6%, but economies in Africa south of the Sahara, Southeast Asia, and Latin America would
be hit
much harder due to their relatively high dependence on trade and primary commodity exports.
The recession is expected to be less severe in
China and the rest of
East Asia, where we expect the
economic recovery to start sooner with the earlier lifting of containment measures.
We expect economies in Africa to be hit
hardest (almost a 9% decline). But agrifood sectors may be
spared and expand, as the collapse in export earnings and loss of capacity to import food push up
domestic production. Lower labor demand in urban service sectors may push workers to return to
agriculture, also contributing to greater domestic food production. With more workers in the sector,
however, individual incomes would remain low.
Food SecurIty, Poverty, and InequalIty 17
Figure 1 Impact of COVID-19 global economic crisis on extreme poverty
160 25%
23%
) 140
20%
15%
20%
P
F
O
120
100
15%
15% 15%
14%
S
N
O ILLIM
(
R
O
O
R EB
M
U
N
L
A
N
O ITID
D
A
80
ELATIVEINCREASEINTHENUMBEROFPOOR(%)
10%
60
4 0
5%
20
0 0
Totalpopulation Rural
population
WORLD
Total Rural
population population
AFRICA SOUTH OF SAHARA
Total Rural
population population
SOUTH ASIA
Increase in number of poor people (millions; PPP$1.90 poverty line) Relative increase in the number
of poor (%)
Source: Authors, based on simulations with MIRAGRODEP model.
R
Without social and economic mitigation measures such as
fiscal stimulus and expansion of social
safety nets, the impact on poverty would be devastating. (The scenario does not consider any such
responses, as
yet.) In addition to the 20% global increase in extreme poverty noted above, the scenario
indicates urban and rural populations in Africa south of the Sahara would suffer most, as 80 million
more people would join the ranks of the poor, a 23% increase. The number of poor in South Asia would
increase by 15% or 42 million.
As these estimates refer
to the extreme poor, that is, those who typically lack sufficient means to buy
enough food, we
expect a commensurate rise in
the number of food-insecure people.
Heading off
this dire outcome — a potential massive increase in
global poverty and hunger — calls for
an unprecedented policy response. High-income countries and international organizations should
work to provide low- and middle-income countries with the necessary fiscal space and import capac
ity to expand health and social protection programs, strengthen food supply chains, and ensure ade
quate and affordable food supplies. Honoring the
multiple calls for
official and commercial debt relief
would also help.
18 Food SecurIty, Poverty, and InequalIty
Key assumptions for the scenario analysis
• All countries affected by COVID-19 im
plement social distancing measures cov
ering on average 40% to 50% of the
population for between 2 and 3 months.
• While the agriculture and food sectors
have been identified as essential in
most countries, we also assume some
supply disruption caused by reduced
labor mobility (for example, for sea
sonal migrant labor) and further, that
perishable farm products suffer greater
postharvest losses of 5% due to logis
tics problems and demand fallout.
• International travel is
essentially shut
down, closing many tourism-related
activities.
• Social distancing measures allow only
essential work, such as
food production
and distribution, under normal condi
tions. We assume further that, on av
erage, one-third of
skilled workers can
continue to work effectively via
various
forms of telecommuting.
•
• The present scenario accounts for the
economic stimulus packages being im
plemented by countries in North Amer
ica and in Europe, including significant
income transfers to households. The
scenario does not consider any addi
tional international support or govern
ment stimulus in
developing countries.The containment measures cause bottle
necks and delays in international trans
port, pushing up freight costs by 3%.
But even these measures are unlikely to be enough. There should also be concerted efforts to keep
trade channels open to avoid piling an
unnecessary food price crisis on
top of
the current health and
economic disasters facing the world. We have developed a tracker to monitor these potentially dam
aging policy measures. In addition, large amounts of
fresh, additional, low-conditionality funding will
be needed to stave off a large-scale food crisis and invest in
resilient food supply chains.
Detailed results of the
scenario analysis can be found here and a detailed description of the underly
ing methodology can be found here.
Originally published April 16, 2020, and updated June 15, 2020.
Food SecurIty, Poverty, and InequalIty 19
3. COVID-19 is exacerbating inequalities
in food security
Johan Swinnen
COVID-19 is disrupting economies and food systems everywhere, but the poor will suffer the greatest
risk of food crisis. Based on model predictions, early empirical evidence, and lessons from previous
crises, it
is clear that the risk of
increased food insecurity depends on the
level of economic develop
ment. As
employment and income opportunities fall for the
poor, the gap between rich and poor is
growing. Among the poor, urban poor and women are especially vulnerable.
The poor’s food and nutrition security will be disproportionately impacted by COVID-19 because:
1. The global economic recession will have larger effects on poor people’s incomes.
2. The poor spend a larger share of their income on food.
3. Among productive assets, physical labor — poor people’s principal asset — will be most affected
by COVID-19.
4. COVID-19 will cause more disruptions in private sector value chains in poor countries.
5. COVID-19 will cause disruptions in public sector programs for
food, nutrition, health, and poverty,
which are more important for poor people.
6. The poor have less access to
sanitation facilities and healthcare.
7. Poor countries have lower economic capacities to
compensate for declining incomes.
Economic models predict that under current conditions — relatively high food stocks, good harvests,
low oil prices, and declining demand — global food prices are not going to
rise. However, logisti
cal problems in
harvesting and transport will put
upward pressure on food prices in some areas
of
the world. Paradoxically, the most important cause of
rising food prices may be hoarding behavior
by consumers and governments rather than market conditions. Despite several expert reports and
economic advice not to repeat the same errors made during the 2007–2008 food crisis, many govern
ments early on introduced trade constraints for foods (see IFPRI’s Food Export Restrictions Tracker).
Yet even absent a major rise in food prices, the food security situation
of poor people is likely
to
decline significantly around the world.
20 Food SecurIty, Poverty, and InequalIty
Falling incomes and food and nutrition security
The global recession, caused by lockdowns and other restrictions on
business activity to control
COVID-19, leads to reductions in food consumption and declines in
nutrition status — especially
among the
poor. Whether through rising food prices, falling incomes, or
both, people have less real
income to pay for their food and will adjust accordingly. This effect plays out more strongly the less
income one has, meaning more hardship for the
poor. Global models predict that for every percent
age point of
global economic slowdown, the number of
people living in poverty would increase by
2% to 3%, or about 14 to 23 million worldwide. However, health and economic impacts may be much
more pronounced in developing, rather than developed, countries with associated greater implica
tions for poverty and hunger.
An early study by Rozelle et al. (2020) confirms these effects for rural households in China. Separated
from their income sources as
COVID-19 travel restrictions prevented them from working in urban
wage jobs, workers suffered massive income losses totaling more than $100 billion. These families cut
back significantly on
nutrition. The majority of
villagers are reducing spending on
food, buying more
grains and staples in
bulk at low cost instead of more expensive goods like meat and produce.
Other early evidence confirms the disproportionate impact on the poor. Hirvonen et al. (2020) find
that significant declines in incomes were greatest among the poor in Ethiopia; and Tesfaye et
al.
(2020) find that the
decline in nutritious food in
Ethiopia was also more important among the poor.
COVID-19 impacts the poorest particularly hard because it directly affects their most important,
sometimes only, productive asset: labor, especially physical labor. Richer people typically have a port
folio of
productive assets, such as
capital and land, and their labor is typically of
a different quality.
Even while locked down inside a townhouse or
a city apartment, they can work via
computer over the
internet, spending their productive hours on
email and Zoom. This is not the case for poor people
with low skills whose only source of income is
likely to entail leaving home to do manual work.
Within the
group of “the
poor,” women and urban consumers particularly seem to suffer more.
Quisumbing et al. identify several reasons for the
gendered impact of
COVID-19. A series of recent
country studies by IFPRI researchers, summarized in
Thurlow (2020), shows how urban poor who have
lost their jobs and face the same or
higher food prices are particularly negatively affected.
Another group of poor
people that are among the hardest-hit by COVID-19 restrictions are those who
have to travel for work. Studies show large negative effects for migrant workers in
several categories:
rural-urban (as in China—see Rozelle et al. 2020), international (as in Egypt—see Breisinger et al. 2020;
and Myanmar—see Diao and Wang 2020), or rural-rural (as in India, where landless workers travel to
work in
seasonal jobs such as harvesting—see Dev 2020).
Disruption of private value chains
Harvesting may be disrupted because of a lack of workers; planting because of a lack of seed or fertilizer;
transport because of reduced transport facilities; and market exchange because of lockdowns or social
distancing. What we are witnessing is a disruption of the food system similar to what happened during
1990s-era transition processes when supply chains collapsed. Those experiences showed that impacts
were strongly heterogeneous, depending on the nature of the commodity, the resource-intensity of the
systems, and the level of economic development.
Food SecurIty, Poverty, and InequalIty 21
But in
the 1990s, the key production factor affected was capital (see Rozelle and Swinnen 2004). Today,
as noted, the disruption is mostly related to labor constraints.
As a consequence, capital-intensive food
value chains (mostly in
rich countries, or in richer parts of
poor countries) are much less affected than
labor-intensive value chains (mostly in poor countries). Reardon et
al. (2020) point out that the impacts
will be greatest in informal-sector small and medium-sized enterprises, which are labor-intensive with
high densities of
workers in small spaces. Modern retail and food-service firms face fewer problems.
Again, these differences are affecting food security among the poor disproportionately.
Disruptions in public sector programs and less access to health and
sanitation facilities
COVID-19 will cause disruptions in public sector programs for
food, nutrition, health, and poverty,
which poor
people depend on. For instance, India’s national lockdown regulations implied closing of
schools. This means that school feeding programs — one
of the country’s largest safety nets — have
been suspended. Other safety nets are also affected, including nutrition programs in community
courtyard sessions for pregnant women and lactating mothers. Key health programs, such as
child
immunization, have been disrupted as
well. And of
course, public food relief programs face the
risk of
exposing more people to the virus by attracting large crowds at
distribution points.
These disruptions affect the poor
disproportionately. They compound the problems associated with
unequal access to
sanitation facilities, including basic facilities such as
running water, which is
crucial
for protection against COVID-19, and limited access to
healthcare. Good
healthcare institutions are
less available in poor countries
in general and access
to them
is particularly limited
for the poor.
Limited government capacity to compensate
While many developed countries have responded to
the economic fallout from COVID-19 by ramp
ing up spending and using monetary policies, options for developing countries may be more limited.
Developing countries will need to
prioritize, focusing their responses on health, essential goods and
services, the domestic financial circuit in local currency, and the
foreign currency market linked to
international trade and external debt. Such a focused approach can
help finance public spending on
programs like cash transfers and safety nets for the
poor and vulnerable, and public investments to
keep firms operating. At the
same time, the
international community also has a crucial role to play in
supporting countries in their policy responses, including through international organizations like the
World Bank, United Nations, and IMF, as
well as
the multilateral development banks.
In summary, several compounding factors mean that COVID-19 is
likely to cause another major food
crisis among the poor. To avoid a food crisis, governments will need to implement policies and pro
grams that target those most impacted and help address the negative impacts.
Originally published April 10, 2020, and updated June 20, 2020.. This post also appears on the Global Alliance for Improved Nutrition
(GAIN) Nutrition Connect blog.
22 Food SecurIty, Poverty, and InequalIty
4. COVID-19 lockdowns have
imposed substantial economic
costs on countries in Africa
James Thurlow
It is too soon to assess
the full economic impacts
that COVID-19 lockdowns will have on developing
countries. But early research indicates that many African economies are significantly impacted and
that poorer households are struggling.
IFPRI is conducting a series
of country studies,
in collaboration with local and government partners,
that use economywide models to estimate the impacts of lockdowns, assess the exposure of food
systems, and identify vulnerable population groups.
This research is ongoing and the situation is evolving rapidly, but three clear findings are emerging:
• Developing countries are shouldering substantial economic costs.
• Food supply chains are exposed, despite being largely exempted from lockdowns.
• Nonpoor urban households face the
largest income losses, but poverty is rising sharply.
Developing countries are shouldering substantial economic costs
We do not yet know how long lockdowns will remain in
effect, what their full impact will be in
2020, or
how quickly African economies will recover from these shocks.
But findings from our country studies show that the
current crisis is leading
to much larger and more
rapid contractions of economic activity than seen in
previous crises, including the global food crisis of
2007–2008 and the
2009 recession. In addition, unlike in
previous crises, it
is domestic policies, rather
than global shocks, such as trade disruptions and reduced remittances, that are imposing most of
the
economic costs, at
least for
now.
Our findings are alarming: In Nigeria, Africa’s largest economy, we estimate a 38% drop in GDP
during the five-week lockdown from late March to the end of
April. South Africa appears to be expe
riencing a similar-sized shock. Impacts are also large in Ghana, where GDP fell by 28% during that
country’s three-week lockdown.
The enormous economic costs of
the lockdowns are making it
difficult for governments to maintain
support for these policies. But any easing of restrictions must balance the
economic importance of
various sectors with the risks posed to those who work in
them. IFPRI is working with governments to
understand these trade-offs and avoid disruptions to national food systems.
Food SecurIty, Poverty, and InequalIty 23
Food supply chains are exposed, despite being largely exempted
from lockdowns
Most African governments consider food
supply chains to be “essential” and have exempted them
from lockdown policies. However, while food
may be
exempt, food systems are not immune to the
effects of the
pandemic.
In Nigeria, for example, we estimate an 18% decline in agrifood GDP during its five-week lockdown,
and a 20% decline in Ghana during its
three-week lockdown. While other sectors, such as
manufactur
ing and construction, are suffering even larger declines, the food supply chain is
particularly import
ant for poor
workers and consumers.
Some impacts on the
food system are direct. The closure of hotels, restaurants, and bars was an early
and common target for most lockdown policies in
Africa. That said, while eating meals prepared
outside the home is important for many urban consumers, it comprises a small part of the overall
food economy.
Most impacts on
food systems are indirect, and mainly caused by falling incomes. Even when farmers,
food processors, and traders are exempt from lockdowns, they may still be unable to
sell products if
consumer incomes and demand for food decline.
So far, food supply chains are faring better than other parts of
the economy in most countries. But this
could change. In Nigeria, the government has closed some food markets in Lagos and restricted food
trading times in major cities to
only four hours every other day. If this prevents consumers from get
ting access to food, it could quickly overshadow other disruptions
to the food system and become a
major source of
economic costs across the
entire economy.
For now, this remains a crisis of food access driven by
income losses, rather than one of
food avail
ability. But food supplies could become more of
a concern if lockdowns
go on for longer,
if they are
applied to rural areas, or if
the movement of
rural workers is
restricted.
Nonpoor urban households face the largest income losses, but
poverty is rising sharply
It may seem counterintuitive that Africa’s nonpoor urban households are hardest hit. But manufac
turing and business services are facing the strictest lockdowns in most places, and these sectors are
often concentrated in cities and employ better-educated workers.
In Nigeria, for
example, incomes in the
top quintile are estimated to fall by 41% during the
lockdown,
while the bottom quintile’s incomes fall by 23%. There are similarly uneven distributional impacts in
Ghana and South Africa.
But higher-income households are better able to
offset such losses by drawing on
savings and other
assets. Poor and rural households are also suffering substantial losses, and for them, even a small
drop in income
can have detrimental and lasting effects.
24 Food SecurIty, Poverty, and InequalIty
More concerning is
that the number of poor people is
rising. In Nigeria and Ghana, for example, we
estimate that national poverty rates will increase by 15 and 13 percentage points, respectively — that
means 30 million more Nigerians and 4 million more Ghanaians living on
less than $1.90 per day.
As the situation evolves,
it could bring even greater losses to Africa’s poor. Tighter restrictions
on urban markets, for example, could shift more of the burden onto
poor consumers and small
holder farmers.
Reassessing priorities, while maintaining a focus on the poor
The economic losses brought by the
current crisis are much deeper and occurring more quickly than
those brought on by earlier crises. Governments are under enormous pressure to provide short-term
emergency relief while also planning and investing in economic recovery.
Financing emergency and recovery programs will be
hampered by lower tax
revenues caused by
lockdown policies, and by countries’ limited ability to borrow due to uncertainty in global markets
and large debts accumulated since the
last crisis. Some displacement of
pre-COVID-19 policies and
priorities is inevitable.
As governments reassess their policy priorities, they should
not lose focus
on the longer-term growth
and poverty reduction that have underpinned Africa’s past decade of strong economic development.
Minimizing both the economic and health impacts of
the COVID-19 pandemic will require coordi
nating both health and food
system policies, and ensuring that they work for the poor. The outbreak
of COVID-19 has confirmed the importance
of having well-functioning health and food systems —
achieving this requires sustained investment, even during times of crisis.
The work discussed in this blog post was supported by the CGIAR Research Program on Policies, Institutions, and Markets led by IFPRI.
Originally published May 8,
2020.
Food SecurIty, Poverty, and InequalIty 25
5. How China can address threats
to food and nutrition security
from the COVID-19 outbreak
Kevin Chen, Yumei Zhang, Yue Zhan, Shenggen Fan, and Wei Si
Since the outbreak of
the COVID-19 pandemic, China’s national and local governments have adopted
stringent mitigation policies, including mandatory lockdowns, suspension of public transportation, and
travel restrictions. While these measures are necessary, they could potentially lead to hiccups in food
and nutrition security. Pandemics like Ebola, Severe Acute Respiratory Syndrome (SARS), and Middle
East Respiratory Syndrome (MERS) all had negative impacts on food and nutrition security — particularly
for vulnerable populations including children, women, the elderly, and the poor. For example, when
Ebola first hit Guinea, Liberia, and Sierra Leone in 2014, rice prices in those countries increased by more
than 30%; the price of cassava, a major staple in Liberia, skyrocketed by 150%. In 2003, the SARS out
break delayed China’s winter wheat harvest by two weeks, triggering food market panics in Guangdong
and Zhejiang, though production and prices were largely unaffected in the rest of China.
Since the beginning of the outbreak in
late December, food prices have remained stable in Wuhan,
in Hubei province — and in fact, all over China. Supplies of staples, fruits, vegetables, and meats have
been adequate despite sporadic reports of
price hikes and shortages in isolated locations. But there
is no room for complacency. Media reports indicate that the poultry industry is already under stress
due to
a lack of
adequate feed supply and interruptions in the timely marketing of its
products. If
nothing is done, the poultry supply could begin tightening, and these problems could spread to other
industries — creating a food
supply hiccup and a threat to food and nutrition security for many.
The current situation
Disruptions are not expected to be
severe, as the food supply has been sufficient and the mar
ket has been basically stable, at least so far. Wuhan has been under lockdown since January 23 to
contain the spread of
the virus. Restrictions on
transportation and movement of
people have led to
some food logistics challenges. However, as the lockdown began just before the Chinese New Year
on January 25, most citizens had already stocked food, and businesses had established reserves of
goods for the holidays, so food prices have not been significantly affected. In February, China’s con
sumer price index, a gauge of
inflation, went up 5.2% year-on-year. But food prices surged 21.9%,
largely due to pork price hikes triggered by the impact of African swine fever on hog
production. On
a month-on-month basis, national consumer prices rose 0.8%, while food prices increased 4.3%, led
by an
uptick in the
prices of
fresh vegetables and meat. However, in
March, both the consumer price
index and food prices index declined on a month-on-month basis, falling 1.2% and 2.7%, respectively.
The price of
fresh vegetables has returned to normal after a surge in February, indicating a modest
impact of
COVID-19 on
China’s food market.
26 Food SecurIty, Poverty, and InequalIty
The poultry industry has suffered more adverse effects. Transportation blockages create difficul
ties for distribution of
inputs like feed, and some firms have already encountered input shortages, dif
ficulties in
product delivery, and labor shortages. The ban on the movement of
live poultry (believed
to be a potential disease risk) has stopped farmers from getting chickens and eggs to market, and
has led some to bury chicks and ducklings alive. According to
industry estimates, market input of
chickens and ducklings has decreased by about 50%. Coupled with the extended impact of
African
swine fever, supplies of meat could plunge. According to data from the
National Bureau of Statistics,
pork production dropped by 29.1% and total meat production decreased by 19.5% in
the first quarter
year-on-year.
The food system beyond agriculture has also been
significantly affected, and these impacts
will grow if processing enterprises cannot restart production
in the near future. Only 24% of
agricultural products are directly consumed by households, while 77% are used as intermediate
inputs, 41% go
to food processing enterprises, and 3% are used by restaurants. In the
wake of
the
coronavirus outbreak, many orders were canceled and many restaurants had to close their doors.
The supply of
processed foods remained relatively abundant. According to
data from the National
Bureau, production in food industries — such as
sugar, meat, and rice processing — decreased only
modestly or
maintained growth in February. But production may also be affected by a lack of
workers
and falling demand for agricultural products. One priority, then, has been allowing migrant workers
to return to these jobs.
Production of
staple food crops such as wheat, rice, and vegetables is expected to remain
sta
ble. The 2014 Ebola epidemic led to an
increase in abandoned agricultural areas and reduced fer
tilizer use in West Africa.
If staple
food production
is affected, the impact on food security could be
grave. China is seeing reassuring signs for staple foods, with spring planting going smoothly, and
recorded a 3.5% year-on-year increase in
the added value of
the country’s planting industry and had
sufficient daily food supplies.
Domestic and international trade disruptions may trigger food market panics. During the 2003
SARS outbreak, panic-buying of
food and other essentials hit many places in China. If this happens
again, it would exacerbate temporary food shortages, lead to price spikes, and disrupt markets. If not
controlled quickly, food
panics can spread and threaten broader social stability. Export
restrictions
and the potential imposition of
nontariff trade barriers, on
the premise of
safety concerns, would also
exert negative impact on food supply chains. The 2007–2008 food price crisis reminds us that export
bans can drive food prices up
and cause volatility. Unfortunately, 11 countries currently have active
binding export restrictions on food.
Restrictions on
mobility may lead to labor shortages. Many companies have given workers
extended leave in response to the outbreak; this could leave many manufacturing and service enter
prises without enough workers. Large numbers of migrant workers who returned to
their hometowns
for the New Year break were trapped there by quarantine measures. The number of migrant workers
who returned to work declined by 30% at the
end of
February in 2020 compared to the same period
in 2019. The resulting labor shortage will likely impact both domestic and global supply chains.
Food SecurIty, Poverty, and InequalIty 27
How has China responded?
Fortunately, the government has been targeting these problems since the early stage of
the out
break. China’s earlier responses to
ensure food
security are discussed in a forthcoming article for
China Agricultural Economic Review’s special section on
“Agriculture and Food Security under Novel
Coronavirus Pneumonia (NCP) Emergency” (Chen, Fan, and Zhan 2020).
On February 5, Premier Li Keqiang called on ministries to coordinate to ensure an ample supply of food
and effective logistics for delivering agricultural inputs, emphasizing the responsibility of local gover
nors. To ensure the smooth logistical operation of regional agricultural and food supply chains, China
hasopeneda “green channel” for fresh agricultural products and prohibited unauthorized roadblocks.
The Ministry of Agriculture and Rural Affairs (MARA), Ministry of Transport, and Ministry of Public Security
jointly issued a notice on January 30 urging relevant departments to coordinate to ensure effective logis
tics for agricultural products and materials. MARA issued a further emergency notice on February 4, call
ing on these departments to maintain market functions and ample supplies of meat, eggs, and milk.
To address the challenges facing the livestock sector, the National Development and Reform
Commission and MARA
jointly issued the “Notice on
Promoting Multiple Measures and Promoting
the Expansion of Production Guaranteed Supply of Poultry and Aquatic Products” to accelerate the
resumption of production. The notice recommends gradual reopening of
live poultry markets. The
government also supports the construction of centralized slaughtering points, cold chain logistics,
and other infrastructure to improve value chains. Feed production and slaughter enterprises are
required to accelerate production in
order to
restore and increase the effective supply of livestock
and poultry products. They are also being provided with production guidance and technical services
to strengthen animal and plant epidemic prevention and control. The government also introduced
financial supports for food production to prevent a decrease in the credit balances of
agriculture
related enterprises and reduce their financing costs. The Agricultural Bank of
China has strengthened
its services
to support 349 key enterprises to ensure stable production and supply of agricultural
products, with
a loan balance of
41.4 billion yuan.
The burden on farming enterprises is mitigated by reducing
or deferring their
tax payments, reduc
ing their rent, and deferring payment of their social insurance premiums. For example, the China
Banking and Insurance Regulatory Commission issued the “Circular on
Implementing Provisional
Postponement in Principal and Interest Repayment for Loans to SMEs and Micro Enterprises (No.6).”
Epidemic-hit small and medium-sized enterprises (SMEs) and micro firms, including small business
owners and individual household businesses, can apply to their banks to defer repayment of princi
pal and interest payable from January 25 to June 30, 2020; SMEs in
China’s Social Security Schemes
are exempt from making employer contributions to pension, unemployment, and work-related injury
insurance schemes between February and June 2020.
The use of e-commerce and delivery companies is another important means to
ensure the food sup
ply. As
lockdown measures led to
a huge spike in demand for home delivery of fresh groceries,
e-commerce companies in China announced
an in-app feature for contactless delivery, allowing a
courier to leave an order in a convenient spot for customer pick-up, without person-to-person inter
action. The use of these delivery platforms has helped resolve logistical challenges, while minimizing
the potential risk of
infection from visiting crowded food markets.
28 Food SecurIty, Poverty, and InequalIty
Finally, ensuring food security requires a means to
address the loss of
workers’ incomes caused by
the interruption of economic activities, as
these income effects may lead to
drastic reductions in
nutrition, especially for vulnerable groups. MARA and
the Ministry of Human Resources and Social
Security issued the “Circular on
Implementation Plan” on
March 26 for expanding local employment
of returning rural migrant workers. The plan aims to promote local employment
of migrant workers
in agricultural production, as well as to help migrant workers return to work while ensuring their safe
movement. A number of
public welfare jobs were set up for migrant workers who face difficultly find
ing jobs on the market.
Looking forward
It’s unclear how long the outbreak will last globally. As
lockdowns and social distancing measures are
implemented in
the rest of
the world, evidence and lessons from China not only have important policy
implications for China to
ensure a robust food system, but can also provide insight for other countries
to help prevent food and nutrition security crises.
Continue to closely monitor food
prices and strengthen market supervision, particularly in
Wuhan and across Hubei and nearby provinces. Transparent market information will enhance the
government’s overall management of the
food market and help to prevent the onset of panics, and
can guide farmers in making rational production decisions. Potential
for speculation remains
at every
stage of
the supply chain, so there is also a need for
sound market supervision. For processed prod
ucts, supervision is
also important to maintain food quality and safety.
Ensure smooth logistical operations of
regional agricultural and food
supply chains. China
opened a “green channel” for
fresh agricultural products and banned unauthorized roadblocks to
ensure normal function of food
supply chains. In addition, e-commerce and delivery companies can
also play key logistical roles. For example, as lockdown measures have led to a huge spike in demand
for home delivery of
fresh groceries, e-commerce companies have announced an in-app feature for
contactless delivery, allowing the courier to
leave an
order in a convenient spot for
contactless cus
tomer pick-up. Making use of these delivery platforms could address many logistical challenges
for obtaining food, while minimizing the
potential risk of
infection from visiting crowded markets to
buy groceries.
Ensure the smooth flow of trade and make full use of the international market as a vital tool
to secure food
supply and demand. After reaching the phase-one trade deal with the
United
States to buy $40 to $50 billion of US farm products annually for the next two years, China has further
announced it
is cutting tariffs on
US goods to ensure supplies and to
alleviate economic and trade
frictions. Meanwhile, increasing livestock product imports could help to buttress supply and stabilize
the prices of domestic livestock products.
Protect vulnerable groups and provide employment services to migrant workers. International
experience shows that the impacts of pandemics fall disproportionately on
vulnerable populations,
including children, pregnant women, elderly people, malnourished people, and people who are ill
or immunocompromised. If many workers are unable to earn
an income due to the disruptions
of the
outbreak, that risks an increase in poverty. As
the government manages the epidemic response, it
Food SecurIty, Poverty, and InequalIty 29
will be essential to restore the
income streams of
migrant workers and normal business operations.
Workers are encouraged to
find jobs near their homes, and migration should be managed to
priori
tize their health. Policies to match workers with
companies are being implemented. But to
work, these
policies will require close supervision.
Regulate wild
food markets to curb the source of
the disease. Many zoonotic diseases originate
from wildlife; HIV, Ebola, MERS, and SARS have all made the
leap from wildlife to humans, spawn
ing international outbreaks. On
January 26, the government announced a temporary ban on wildlife
trade from markets, restaurants, and e-commerce until the epidemic is
over. To avoid future epidem
ics, on
February 24, the government further issued the
decision to
ban the
trade and consumption of
wildlife as
food. Use of wild animals for medicine, pets, and scientific research will be subject to strict
examination and approval by relevant departments.
Originally published February 12, 2020, and updated June 10, 2020.
For more on China’s early responses to COVID-19, see Z.
Chen, S. Fan, and Y. Zhan,“COVID-19 and Food Security: Early Responses,
Impact, and Lessons from China,” China Agricultural Economic Review, 2020 (forthcoming).
30 Food SecurIty, Poverty, and InequalIty
6. Assessing the toll of COVID-19
lockdown measures on the
South African economy
Channing Arndt, Sherwin Gabriel, and Sherman Robinson
In trying to limit the spread of
COVID-19, policymakers are confronting the
difficult task of balancing
the positive health effects of
lockdowns against their economic costs — particularly the burdens
imposed on low-income and food-insecure households.
South African lockdown policies are relatively stringent, and the economic impacts are large. Figure 1
presents impacts on
the income components of
gross domestic product (GDP), based on an
analysis
using a social accounting matrix (SAM) model, a tool well-suited to assessing the impacts of
short
term shocks. The work is a collaboration between IFPRI,
the National Treasury
of South Africa,
the
South African Reserve Bank, and UNU-WIDER.
GDP can be viewed as a flow of goods and services. The lockdown has direct effects that restrict this
flow. Prominently, there is a forced reduction in
production, and final demand for goods and services
falls as businesses and households are locked down. Indirect effects follow. For example, because
many business operations, including some in
manufacturing, are reduced to operating at low levels
or not
at all, demand for electricity declines, which
in turn reduces demand for coal. Across produc
tive sectors and households, these indirect effects propagate throughout the economy. The highly
disaggregated SAM model assesses direct and indirect effects across these multiple sectors.
Once all indirect effects of
the lockdown are considered, the total flow of goods and services is
reduced by about a third (see righthand bar in
Figure 1), with
indirect effects accounting for most
of the reduction. Figure 1 also shows how this reduction
is distributed across wage earners (divided
into categories by educational attainment) and returns to
capital. These declines in earnings should
be interpreted as being due to reductions in hours worked and in the rate of
utilization of
factories,
machines, and other elements of installed capital. Note that the negative impacts on
wage earnings
are larger for less-educated workers.
In South Africa, then, COVID-19 public health responses have very large implications for economic
activity and income, with especially strong implications for households with low education levels who
depend on
wage earnings.
On their own, these negative economic shocks are sufficiently large to push many households into
food insecurity. To borrow a term from Amartya Sen, the lockdown could be characterized as
a policy
induced reduction in household “capabilities.” Increased food insecurity results principally from the
severe shock to household incomes rather than a shock to food availability such as occurs in a drought.
Food SecurIty, Poverty, and InequalIty 31
Figure 1 Lockdown impacts on wage earnings and income GDPcompo
nents in South Africa, as percentage deviation from pre-crisis levels
W&S of Primary
Educ Employed
W&S of Middle
Educ Employed
W&Sof Second W&Sof Tert
Educ Employed Educ Employed
Total Wages
& Salaries
Total Returns
to Capital GDP
0
-10
-20
-26.1
-30 -31.7
-30 -34
-38.5
-42.1 -41.7 -40
-50
Source: Social accounting matrix (SAM) model.
Note: W&S =wages and salaries.
Because the source of food insecurity is a collapse
in earnings, income transfers
via social protec
tion are highly effective in countering the economic effects of
lockdowns. In South Africa, govern
ment transfers are helping to substantially support total income of
households in the lower half of the
income distribution, blunting (but far from offsetting) the
impacts of the
crisis.
Using an income distribution and food security lens, the remarkably rapid and severe shocks imposed
because of COVID-19 illustrate the value of having channels in place to transfer income to vulnerable
households. This provides policymakers with the ability to soften the impacts of
such “black swan”
shocks on
vulnerable populations. Looking ahead, preparing for future shocks also requires that, in
good times, countries build their fiscal resources so that they can respond adequately at times of crisis.
Attention should now turn to developing a longer-run strategy for navigating the pandemic. Loosening
movement restrictions too quickly risks a rapid increase in infections that could overwhelm the health
system and cause more economic shocks as many workers become ill. South Africa’s large number of
people with HIV has resulted in a wealth of experience in infectious disease on which it can draw. HIV is
also a potential risk factor for COVID-19 complications, presenting additional public health challenges.
Overall, decisions on public finances will need to carefully consider how to address multiple spending
demands with lower tax revenues. Devising suitable responses will require that economists and epide
miologists work together to understand the mechanisms at work and balance the health dimensions of
policies to contain the pandemic and their economic fallout — especially for vulnerable groups.
Originally published May 6,
2020.
32 Food SecurIty, Poverty, and InequalIty
7. Addressing COVID-19 impacts
on agriculture, food security,
and livelihoods in India
S. Mahendra Dev
India took early action to limit the spread of
COVID-19, ordering a 21-day nationwide lockdown for its
population of
1.3 billion people starting March 25. Subsequently the lockdown was extended three
more times before May 31. The unlocking of India began June 1, except in containment zones. The
novel coronavirus has spread widely in
India and the
number of reported infections is
217,000, with
relatively few deaths, at
6,075, as of
June 4. However, as
COVID-19 cases are increasing fast, there is
great concern about the disease’s potential spread and impact. India has to be ready for a possible
surge. The government views the pattern of the spread of
COVID-19 as
similar to the 2009 H1N1 influ
enza pandemic, meaning the spread is
unlikely to be
uniform. It is
concentrated in a few big cities and
states and its
spread is less in rural areas and smaller towns and cities.
The lockdown of India for more than two months helped in
limiting the health crisis, but — as
in other
countries — the complete shutdown of all economic activities except essential services has created an
economic crisis and misery for the
poor, with massive job losses and rising food insecurity.
The economic shock has been much more severe for
India, for two reasons. First, pre-COVID-19,
the economy was already slowing down, compounding existing problems of
unemployment, low
incomes, rural distress, malnutrition, and widespread inequality. Second, India’s large informal sec
tor is
particularly vulnerable. Out of
the national total of 465 million workers, around 91% (422 million)
were informal workers in 2017–2018. Lacking regular salaries or
incomes, these agricultural, migrant,
and other informal workers would be hardest hit during the
lockdown period. Here, I focus on
the
likely impacts on
agriculture, supply chains, food and
nutrition security, and livelihoods.
Agriculture and supply chains
COVID-19 is disrupting some activities in
agriculture and supply chains. Preliminary reports show
that the
lack of available migrant labor is
interrupting some harvesting activities, particularly in north
west India where wheat and pulses were harvested. There are disruptions in
supply chains because
of transportation problems and other issues. Prices have declined for wheat, vegetables, and other
crops, yet consumers are often paying more. Media reports show that the
closure of hotels, restau
rants, sweet shops, and tea shops during the lockdown is already depressing milk sales. Meanwhile,
poultry farmers have been badly hit due to
misinformation, particularly on social media, that chickens
are carriers of COVID-19.
Food SecurIty, Poverty, and InequalIty 33
Some measures required to
keep the agricultural sector and supply chains working smoothly are
listed here:
1. The government has correctly issued lockdown guidelines that exempt farm operations and sup
ply chains. But implementation problems leading to labor shortages and falling prices should
be rectified.
2. Keeping supply chains functioning well is
crucial to food security. It should be noted that 2 million
to 3 million deaths in the
Bengal famine of
1943 were due to food
supply disruptions — not a lack
of food availability.
3. Farm populations must be protected from the coronavirus to the extent possible by testing for
the virus and practicing social distancing.
4. Farmers must have continued access to markets. This can be a mix of private markets and govern
ment procurement.
5. Small poultry and dairy farmers need more targeted help, as
their pandemic-related input supply
and market-access problems are urgent.
6. Farmers and agricultural workers should be included in the government’s assistance package and
any social protection programs addressing the crisis.
7. As
lockdown measures have increased, demand has risen for home delivery of groceries and
e-commerce. This trend should be encouraged and promoted.
8. The government should promote trade by avoiding export bans and import restrictions.
Using social safety nets as a bridge between health shock and
economic shock
The lockdown has choked off almost all economic activity. In urban areas, this has led to the
wide
spread loss of jobs and incomes for informal workers and the poor. Estimates by the Centre for
Monitoring Indian Economy show that unemployment shot up from 8.4% in mid-March to 27%
throughout April. In urban areas, unemployment was around 30% in
April. There was a loss of
122 million jobs in
April compared to the employment level in
2019. Only in the first
week of
June, the
unemployment rate declined to 23%. The shutdown has caused untold misery for informal workers
and the poor, who lead precarious lives and face hunger and malnutrition.
The best way to address this urgent need is
to use social safety nets extensively to
stabilize their lives
with food and cash.
The Indian government has responded quickly to the
crisis and announced a $22 billion relief pack
age, which includes food and cash transfers. Several state governments have announced their own
support packages.
34 Food SecurIty, Poverty, and InequalIty
The central government’s relief package, called Pradhan Mantri Garib Kalyan Yojana (Prime Minister’s
plan for well-being of the
poor), is aimed at providing safety nets for those hit hardest by
the
COVID-19 lockdown. However, it
is inadequate in the face of the
enormous scale of the
problem.
Nobel Prize economists Esther Duflo and Abhijit Banerji say that the government should have been
much bolder with the package’s social transfer schemes. The $22 billion in
spending is only 0.85%
of
India’s GDP.
In the middle of May, the central government announced a Rs. 20.9 trillion ($279 billion) package —
10% of GDP — covering, among others, agriculture, informal workers, and medium, small, and micro
enterprises (MSME). One of the
criticisms of the
package is
that many of its
measures are related to
credit availability and long-term reforms. These measures could be useful in the medium and long
term. The real fiscal stimulus is only 1% of GDP. The poor and vulnerable need immediate help.
Below are some further measures needed in
addition to the government package:
• Food and nutrition security. Government warehouses are overflowing with 71 million tons of
rice
and wheat. In order to
avoid exclusion errors, it is
better to offer universal coverage of
distribu
tion in the next few months. Nutrition programs like Integrated Child Development Services (ICDS),
mid-day meals, and Anganwadis (rural childcare centers) should continue to work as
essential ser
vices and provide rations and meals to
recipients at home. Eggs can be added to improve nutri
tion for children and women. Several state governments have started innovative programs to
help
informal workers and the poor. For example, the Kerala government is providing meals with diver
sified diets at the
doorsteps of
households.
• Cash transfers. Unemployed informal workers need cash income support. The government has
provided Rs.500 ($6.60) per month to the
bank accounts of 200 million women via the Jan Dhan
financial inclusion program. But this too is
insufficient. A minimum of
Rs.3000 ($40) per month in
cash transfers is needed for the next three months.
• Migrant workers. There are about 40 to 50 million seasonal migrant workers in
India. In recent
days, global media have broadcast images of hundreds of thousands of
these migrant workers
from several states trudging long distances on
highways; some walked more than 1,000 kilome
ters to
return to
their home villages. These workers should be given both cash transfers and nutri
tious food.
COVID-19 is an unprecedented challenge for India; its
large population and the
economy’s depen
dence on informal labor make lockdowns and other social distancing measures hugely disruptive. The
central and state governments have recognized the challenge and responded aggressively — but this
response should be just the beginning. India must be
prepared to
scale it up
as events unfold, eas
ing the economic impacts through even greater public program support and policies that keep mar
kets functioning.
Originally published April 8,
2020, and updated June 15, 2020.
Food SecurIty, Poverty, and InequalIty 35
m i l
M N
doc
w
36
DIETS AND
NUTRITION
37
8. The COVID-19 nutrition crisis:
What to expect and how to protect
Derek Headey and Marie Ruel
The COVID-19 pandemic has all the makings of
a perfect storm for global malnutrition. The crisis will
damage the nutritional status of vulnerable groups through multiple mechanisms. We can expect a
dangerous decline in
dietary quality in low- and middle-income countries (LMICs) stemming from the
income losses related to government-mandated shutdowns and de-globalization, as well as from the
freezing of food transfer schemes such as
school feeding programs and the breakdown of
food mar
kets due to both demand shocks and supply constraints. But malnutrition will also increase due to
healthcare failures, as already strained healthcare systems are forced to divert resources from a range
of nutritionally important functions — including antenatal care, immunization, micronutrient supple
mentation, and prevention and treatment of childhood diarrhea, infections, and acute malnutrition —
toward combating COVID-19.
Based on
evidence from previous crises and some limited evidence from the current pandemic, we
outline here what to expect and how to
protect the most vulnerable, especially women and chil
dren, from the effects of
this nutritional crisis. We also emphasize the critical need for high-frequency
surveillance of
vulnerable populations (for example, through phone surveys) and close coordina
tion across sectors, including health, agriculture, education, water and sanitation, social protection,
and commerce and trade. Just as
in normal times, malnutrition remains a multidimensional problem
during times of crisis and therefore requires multisectoral solutions.
COVID-19 may lead to drastic reductions in dietary quality
The COVID-19 economic crisis will affect diets primarily through declining demand for vegetables,
fruits, and animal-sourced foods, which are the main sources of essential micronutrients in diets. But
these demand shocks will also break down the value chains that supply such highly perishable foods,
further exacerbating the shift to
monotonous, nutrient-poor diets.
Income effects are likely to be dramatic for poor households in LMICs because of widespread unem
ployment resulting from COVID-19 mitigation measures. The poor
will respond by purchasing the
cheapest calories they can find to feed their families. We know from previous IFPRI research that in
poor countries calories from nutrient-rich, nonstaple foods like eggs, fruits, and vegetables are often
as much as 10 times more expensive than calories from rice, maize, wheat,
or cassava. In the face of
drastic declines in
income, vulnerable households will quickly give up
nutrient-rich foods in order to
preserve their caloric intake.
This happened during the
1998 Indonesian financial crisis, when real wages fell by 33% between
August 1997 and August 1998 due to rising unemployment and a food price crisis. Strikingly, even
38 dIetS and nutrItIon
as rice prices skyrocketed by almost 200%, rice consumption continued
to rise during this period.
A nutritional surveillance study in rural Java that collected 14 rounds of
data during 1995–1997 also
found dramatic declines in
egg, meat, and vegetable consumption. Not surprisingly, child anemia,
sometimes caused by iron and other micronutrient deficiencies, rose sharply from a baseline of 52%
to 68% at the peak of
the crisis, and children’s mean weight-for-height declined by over one-third of
a
standard deviation.
The COVID-19 economic crisis could also affect nutrition through disruptions to supply chains for
nutrient-rich foods. Most nutrient-rich foods are highly perishable, resulting in
fragile supply chains.
A breakdown in any part of the supply chain — from farms to
traders, transporters, and processors to
retailers — can
break the whole chain. IFPRI has already collected evidence of
significant disruptions
to livestock production in
China and vegetables and dairy value chain disruptions in
Ethiopia, while
Indian media are reporting a full-blown crisis in dairy marketing, which is particularly troubling in a
country where milk and milk products are key sources of
essential nutrients for young children. Public
food distribution programs are gearing up in
several countries to mitigate these types of problems,
but such programs deliver nonperishable staples, oils, and pulses, potentially compounding the ten
dency toward poor-quality diets.
In addition to the severe deterioration in household diets, there are major additional nutritional risks
for mothers and young children. Agencies like UNICEF are worried about disruptions to imports of
crucial nutritional products, including micronutrient supplements and micronutrient-fortified prod
ucts used to prevent and treat micronutrient deficiencies or severe acute malnutrition. Anecdotal
evidence from Asia also suggests that women are concerned about passing the coronavirus to their
infants through breast milk, which could result in switching to breast-milk substitutes that increase
risks of infection and malnutrition in areas with poor
water quality. And
globally, breastfeeding pro
motion and nutrition counseling usually provided by the
health sector will be severely limited due to
restrictions on
mobility, social distancing requirements, and overburdened healthcare systems.
COVID-19 threatens maternal and child health, directly and indirectly
Pregnant women and mothers with young children are obviously vulnerable to COVID-19, and espe
cially so if they have other underlying health conditions. But the indirect effects on healthcare sys
tems will likely have far greater consequences for
maternal and child health. In principle, lockdown
protocols in most countries do not prohibit health-related travel, but healthcare providers and their
clients will be less willing to travel for
non-emergency check-ups or
preventive care (such as immuni
zation, nutrition counseling, and micronutrient supplement distribution), and many maternal and child
healthcare providers have already been reassigned to COVID-19 responsibilities.
The erosion of
resources for maternal and child healthcare could easily manifest in
invisible trag
edy, characterized by drastic declines in
antenatal, neonatal, and essential maternal, infant, and child
healthcare services. Some of the most direct risks include breakdowns in
supply and/or distribution
of antenatal iron folic acid
or multiple micronutrients; child vitamin A supplementation; distribution
of
oral rehydration salts and zinc for diarrhea and therapeutic food for home treatment of
acute malnu
trition; and safe in-person treatment consultations.
dIetS and nutrItIon 39
More indirect, yet equally severe, is the
risk that diversion of
healthcare resources toward combat
ing COVID-19 will jeopardize regular but life-saving efforts to prevent and treat malaria, diarrhea,
and other infectious and tropical diseases. In much of Asia and Africa, the inevitable scaling back of
these efforts will coincide with the monsoon rains — a time when, even in normal years, the incidence
of tropical infectious diseases and of acute malnutrition rises steeply. In 2020, the perfect storm
of
eroded basic healthcare, chronic lack of
access to safe water, sanitation, and hygiene (WASH), declin
ing dietary quality, and heightened seasonal risk of infectious disease means that many millions of
children in
Asia and Africa will be in danger of
severe, life-threatening disease and malnutrition.
Poor nutrition, in turn, weakens the
immune system and can jeopardize the body’s ability to fight a
COVID-19 infection.
How can we protect vulnerable groups?
Policymakers and researchers alike are operating in
a unique state of uncertainty, and those working
on nutrition may struggle to get their voices heard
in the fog
of this war against COVID-19.
It is there
fore critical to strengthen and broaden multisectoral nutrition coalitions to
ensure that actors in differ
ent sectors work as
effectively as possible to prevent a full-blown nutritional crisis. All over the
world,
COVID-19 response committees have been formed to
address the crisis, but in many instances, we
fear, those championing food
and nutrition security are being sidelined. Yet it is
now more critical
than ever that multisectoral nutrition groups advocate and support key actions to
protect nutritionally
vulnerable groups (with many of these actions also contributing to poverty reduction). These include:
1. Keep agrifood systems functioning. Let farmers farm, traders trade, input dealers deal, and
sellers sell, even if they are informal. Implement social distancing and improve hygiene measures
along the value chain, but keep domestic and international food markets working.
2. Facilitate food system innovations. Given that social distancing and mobility restrictions may
be in
place for many months, governments, development partners, and microfinance institutions
should search for ways to stimulate innovative and
safe food delivery systems, for example, espe
cially those that create jobs.
3. Support local (or homestead) food
production to increase access to nutrient-rich vegeta
bles, fruits, and eggs
and improve diet quality. These programs are consistent with social dis
tancing, can use surplus household labor, including women, and will increase consumption of
nutrient-rich foods.
4. Find innovative ways to stimulate demand
for nutrient-rich foods. National leaders and
national media must urge their populations to keep consuming healthy diets. Mobile phone mes
saging could be used to stimulate demand for protective nutrient-rich foods and to encourage
appropriate infant and young child feeding practices, including optimal breastfeeding and diet
diversity practices.
5. Use social safety net programs
to improve dietary quality, not just quantity. Food trans
fers are often focused on
staples, and where available, should consider biofortified (micronutri
ent-rich) crops. Cash transfers or
vouchers schemes linked to innovative food delivery systems
40 dIetS and nutrItIon
should also be considered to keep the
economy going and stimulate demand for fruits and veg
etables, dairy, and other nutrient-rich foods. School feeding programs should also adopt new
modalities to safely distribute food during school closures.
6. Prevent the collapse of
basic maternal and child health services. The medical profession is
facing the most challenging crisis of the
past century. Still it must find ways to maintain basic pre
ventive and curative healthcare services, especially for mothers and young children, whether
through remote consultations and nutrition counseling (using mobile messaging or radio) or
COVID-19–safe home visits and delivery of
essential drugs and supplements. Key to meeting this
challenge is increasing access to protective equipment for all healthcare workers.
7. Invest in WASH, urgently. WASH programs
are a win-win for preventing contagion
of COVID-19
and other infectious diseases that affect maternal and child health and nutrition. Many LMICs
have increased access to hand-washing stations in communal places. Public announcements and
mobile messaging can
raise awareness and nudge individuals into more hygienic routines.
8. Ramp up support to community-based management of
acute malnutrition. With the
expected rises in
acute malnutrition, it
will be important to boost (safe) community-level screen
ing and referral of children with acute malnutrition, maintain appropriate stocks of life-saving
supplements, and ensure appropriate staffing and
availability of protective equipment. Regular
monitoring and surveillance will also be needed to
assess the emergence of
acute malnutrition
among newly vulnerable populations.
9. Protect women and children. Economic stress and social distancing will increase the
risk of
domestic violence and psychosocial stress. Social protection and other relief programs need to
prioritize women and children and explore novel ways to support individuals and communities in
the context of
prolonged social distancing.
10. Set up or
scale up food and nutrition surveillance systems. These systems help in identifying
the scope and scale of
nutritional crises, especially fast-moving crises. Innovations in phone and
web-based surveillance systems offer new tools for timely monitoring of
vulnerable populations
to improve targeting and program design in a time of unparalleled uncertainty.
Originally published April 23, 2020.
dIetS and nutrItIon 41
and9. COVID-19 is shifting consumption
disrupting dairy value chains in Ethiopia
Agajie Tesfaye, Yetimwork Habte, and Bart Minten
The COVID-19 crisis is having a range of
impacts on
food consumption and value chains everywhere —
containment measures, lost incomes, and perceptions of
disease risk are altering food availability and
consumer preferences. To understand the effects of the
COVID-19 crisis on
Ethiopia’s important dairy
sector, we conducted a qualitative appraisal of the
dairy value chain supplying Addis Ababa. Between
April 15 and May 10, we interviewed nearly 100 commercial and small dairy farmers in urban and rural
areas, dairy processors, traders, development agents, urban retailers, and consumers.
Overall, the survey indicates that the
Ethiopian dairy sector has experienced only moderate impacts —
especially compared to
the livestock sectors in China and other countries. However, certain segments
of the industry — particularly raw milk vendors and small dairy shops — have been hit hard.
Downstream: Urban retail and consumption
Data from two recent large-scale household surveys indicate that the consumption of dairy products
in Addis Ababa has decreased since the start
of the COVID-19 crisis. In January/February 2020, 56%
of residents questioned said that they consumed dairy products in the previous seven days. In May,
this number declined to 45%
of interviewed households (Figure 1). All income groups decreased their
consumption, except for the richest quintile, where the share of
consuming households changed little.
An important reason for falling consumption
is the fear
of disease risk. More than half of respondents
in the household survey said they were avoiding the consumption of animal-sourced foods (meat,
milk, yogurt, cheese) due to the perceived COVID-19 risk. This widespread perception is appar
ently linked to Ethiopian media reports at
the beginning of
the outbreak suggesting that consump
tion of
fish and animal-sourced products was associated with greater chances of infection. However,
COVID-19 transmission via food is not considered a significant problem, and the risk from dairy prod
ucts in particular is minimal; the virus typically spreads through close person-to-person contact via
airborne respiratory droplets.
While media outlets later corrected these warnings regarding dairy products, the Ministry of
Health
has warned the public to
avoid consumption of
raw foods because of the
potential risk of
contami
nation through droplets coming from food handlers. Thus the
perception of
risk from dairy products
remains — particularly from raw milk. Our
interviews indicate a significant drop in the demand for raw
milk; a steady, or
even higher, consumption of
pasteurized milk; and an
increase in
purchases of pow
dered milk, as
the latter two
are considered safer by
consumers.
42 dIetS and nutrItIon
Figure 1 Dairy consumption in Addis Ababa, Jan./Feb. and May 2020
80
S
January/February May
70
)
60
50
% (
s
dlohesuohf
o
e rah
40
30
20
10
0
Average Poorer Middle RichPoorest
quintile
Richest
quintile
Source: Wolle et
al. (2020); Hirvonen et al. (2020).
Addis Ababa’s dairy shops — where people can buy milk and yogurt, and there is also often space to
sit and eat — are estimated to distribute 11% of the
city’s liquid milk, much of it in
raw form, and more
than 25% of its
yogurt. Dairy shop owners or
managers we interviewed all complained of
a sharp
reduction in customers, largely because consumers link raw milk, or
yogurt made from raw milk, with
an increased risk of contracting the
virus.
Social distancing measures are also impacting business. Dairy shops are often located in
areas that
are now much less busy — such as near universities, whose students have gone home. Most are also
small and cannot easily accommodate orders to keep customers widely separated. Such distancing
measures are also leading to a drop in demand for milk products by coffeehouses and pastry shops,
we find, another important outlet for dairy.
We also see a decrease in activities by small informal distributors of
raw milk. Supplied by urban dairy
farms and also in part by small-scale milk collectors, they sell their product to urban residents in plas
tic jerrycans of 10 to 20 liters. They often also use public transport. The consumer-clients whom we
talked to indicated that they were scared of buying from such vendors due to
perceived COVID-19
risks. The reasons mentioned included the high number of visits such traders make to
different
houses, their lack of
health precautions, and the fear of contamination of utensils used by collectors,
milkmen, or
vendors across this raw milk marketing chain.
dIetS and nutrItIon 43
Interviews with owners of regular grocery shops — which are very important for the distribution of
dairy products in
Addis — and of
supermarkets indicate that demand was down, as
usual, during the
fasting period in March and April, and that it has since returned to normal levels,
or that
it was even
up compared to the
same period in other years. Some indicated that they were running out
of sup
plies. But dairy demand has shifted: They all indicated that the demand for powdered milk, which
normally makes up almost 10% of
the dairy expenditures of
urban households in Addis, significantly
increased. They suggested that consumers believe that the
processed product is
less risky than raw
milk and is
also appealing because it can be stored indefinitely — important given the uncertainty sur
rounding stay-at-home measures, the risk associated with going out, and the fear that food supply
chains might break down.
Midstream and upstream: Dairy processing companies, collectors,
and farmers
These changes in consumer preferences pass down through the dairy value chain — in
particular,
distributors, collectors, and rural farmers involved in
the raw milk value chain have been severely
affected by the
COVID-19 crisis. Farmers are less able to sell their milk. As
a result, more milk was pro
cessed and the butter supply rose, and butter prices fell sharply in rural areas. Some dairy house
holds reported incidences of wasted milk as they could not find buyers, and some indicated they
were increasing their own dairy consumption.
Meanwhile, prices of
liquid milk remained stable in urban retail markets and prices for producers sup
plying dairy processing plants did not change. Marketing margins did not change very much either.
On the cost side, feed prices increased 30% to 40% over several months, before dropping back to
normal levels. Wheat bran and oil-cake were the most affected. The spikes may have been due to
wheat factories receiving less supply from rural areas and/or reducing operations by placing some
workers on leave in
response to
COVID-19. Transportation problems may also have contributed. But
overall, all farmers interviewed said production has not fallen since the
start of
the COVID-19 crisis.
We also assessed access to veterinary medicines. These seem to be less available
in public phar
macies but can still be found in
private ones. However, stakeholders in
rural production areas indi
cated that prices had gone up
by 15% to 20% since the start
of the COVID-19 crisis. Retail prices often
increased because prices from distributors had increased, as their international supply channels
might have been disrupted.
Conclusion
Overall, despite the exceptions, the Ethiopian dairy sector has proven surprisingly resilient in the
face of
the pandemic, control measures, and consumer worries about food contamination. This might
be explained by the fact
that the
Ethiopian production system is much less dependent on marketed
inputs than that of some other countries. Nevertheless, our survey indicates a number of problems
remain, including the challenge of
accurately communicating the COVID-19 disease risks associated
with food to consumers. It is also important to
further monitor these developments. A new household
survey that will be fielded in the
coming weeks in Addis Ababa might provide new needed insights.
44 dIetS and nutrItIon
We thank Anne Bossuyt (IFPRI), Fantu Bachewe (IFPRI), Kaleab Baye (Addis Ababa University), and Rinus van Klinken (SNV) for com
ments on an earlier version of this post.
This work was funded in whole or part by the United States Agency for
International Development (USAID) Bureau for Food Security under
Agreement # AID-OAA-L-15-00003 as part of the Feed the Future Innovation Lab for Livestock Systems, implemented by the Institute of
Food and Agricultural Sciences of the University of Florida in partnership with the International Livestock Research Institute (ILRI).
Originally published June 1, 2020.
dIetS and nutrItIon 45
10. Survey suggests rising risk of food
and nutrition insecurity in Addis Ababa,
Ethiopia, as COVID-19 restrictions
continue
Kalle Hirvonen, Gashaw Tadesse Abate, and Alan de Brauw
As the COVID-19 pandemic has spread to virtually every corner of the world, lockdowns, supply
disruptions, and economic pain have followed in its
wake, raising alarm about food
and nutrition
security among policymakers, the
development community, and other observers. Representative sur
vey data on
households’ immediate and longer-term responses to the pandemic are necessary to
understand these impacts and their implications, and to
plan and target appropriate responses. The
need is especially urgent for urban areas, where residents may face greater public health risks and
tighter restrictions.
To cast light on how households in Addis Ababa, Ethiopia, are reacting to the crisis, IFPRI’s Ethiopia
Strategy Support Program (ESSP), with the
support of the
CGIAR Research Program on
Agriculture
for Nutrition and Health (A4NH), has begun a series of
monthly phone surveys. Initial data demon
strate that poorer households are taking a greater economic hit
than those with
higher incomes, and
that dietary diversity has declined. The results suggest the food security situation in Addis Ababa
could sharply deteriorate in
the coming weeks if disease transmission and social distancing mea
sures continue.
The phone surveys build on data collected from a representative sample of
households that par
ticipated in a randomized controlled trial in
2019, with
the endline taking place in early 2020. The
first phone survey was conducted
in early May and covered 600 households,
as will subsequent
rounds, with an
emphasis on
ensuring household respondents are spread across the Addis Ababa
income distribution.
Ethiopia confirmed its
first COVID-19 case on March 13. The Ministry of Health immediately began
contact tracing and isolating those who tested positive for the virus. Three days later, the
government
closed schools, banned all public gatherings and sporting activities, and recommended social dis
tancing. Other measures to
prevent the
spread of the
virus soon followed. Travelers from abroad were
put into a 14-day mandatory quarantine, bars were closed until further notice, and travel across land
borders was prohibited. Several regional governments imposed restrictions on
public transportation
and other vehicle movement between cities and rural areas.
While the policies were clear, as
in many other countries there was confusion, mixed implementa
tion, and a range of
economic fallout. Our
initial phone
survey, conducted between May 1 and May 6,
2020, aimed to
capture the immediate effects on
people and their knowledge of the disease. It shows
46 dIetS and nutrItIon
Figure 1 Change in income levels in April 2020 compared to usual
incomes, by household wealth quintile, Addis Ababa
Much more Somewhat more Same
Somewhat less Much less
Poorest
Poorer
Middle
Richer
Richest
0 10 20 30 40 50 60 70 80 90 100
% of households
N =600 households
Source: Authors’ calculations from Addis Ababa COVID-19 phone surveys.
that almost all households are aware of COVID-19, and
most are aware of
basic preventative measures
such as
hand-washing and social distancing. Like many people in developed countries, a relatively
large share of the sample — 35% — stated that they are “extremely stressed.”
We asked respondents to compare their household income in
April 2020 to their usual household
income at
this time of
year (Figure 1). About 37% of
respondents stated their households had “much
less income” and another 21% stated their households had “somewhat less income.” When we exam
ine reported losses by wealth quintile (defined using the survey conducted in January and February),
we find poorer households are much more likely to report much less income during April than
richer households.
How are households dealing with reduced incomes? We asked those who reported income losses
to share their primary strategy, and we find that about two-fifths report using savings, and another
one-fourth report reducing their household food
expenditures. Households do not report having
much savings on average; about two-fifths have only enough savings for up to 14 days of food expen
ditures, and only 10% of all households report having enough savings for more than a month of
food expenditures.
dIetS and nutrItIon 47
Figure 2 Changes in household reports of consumption of specific
foods between February and April 2020, Addis Ababa
Feb 81
Fruit
Apr 60
Feb 65
Meat
Apr 54
Feb 56
Dairy
Apr 45
0 20 40 60 80 100
% of households consuming in the past 7 days
N =600 households
Source: Authors’ calculations from Addis Ababa COVID-19 phone surveys.
With declining food expenditures, we observe diet changes already beginning to occur. We admin
istered a standard household dietary diversity score module, repeated from the (in-person) survey in
early 2020. We find households are less likely to report consuming fruits
(declining from 81% to 60%
of households), meat (65% to 54%), and dairy (56%
to 45%) (Figure 2). These results suggest concerns
about the declining nutrient density of diets are real: households are reducing food expenditures
by substituting away from more nutrient-dense foods to cheaper, less-nutrient-dense foods. These
results are worrisome, as there is substantial uncertainty about how long the pandemic and its eco
nomic impacts will persist, and in the
long term such dietary changes could both increase malnutri
tion and be detrimental to the food system as
a whole.
A major disruption like a pandemic has serious implications for the evolution of
food systems. When
negative shocks occur, food purchase decisions can shift from a focus on dietary diversity toward
ensuring there is enough to eat.
Our data show that many households
in Addis Ababa have done just
that, though their overall food security status is not
yet alarming. However, as personal savings dwin
dle, the likelihood that we will observe a rapid increase in food insecurity in the near future is quite
high if COVID-19 restrictions continue.
48 dIetS and nutrItIon
While these measures limit the spread of
COVID-19, they come at a high cost, particularly to the
poorest households. One policy response would be to
rapidly scale up
existing support programs
before the food insecurity and hunger situation reaches alarming levels. In
urban Ethiopia, the Urban
Productive Safety Net already provides an established framework for identifying the poorest and
most affected households. Another important response is to support the 1,000 food
banks that have
been established in Addis Ababa to curb the likely deterioration in food security. Only concerted
assistance can help to sustain a population cut off from its
income and facing fewer, and worse, food
choices as
a result. In further survey rounds, we plan to
continue tracking both how policies reach
sample households and how food and nutrition security change among these households.
Originally published May 21, 2020.
dIetS and nutrItIon 49
50
LABOR
RESTRICTIONS
AND
REMITTANCES
51
11. Lockdowns are protecting China’s
rural families from COVID-19, but
the economic burden is heavy
Scott Rozelle, Heather Rahimi, Huan Wang, and Eve Dill
In response to the COVID-19 outbreak in December 2019, China implemented a nationwide travel
blockade and quarantine policy that required all public spaces, businesses, and schools to
shut their
doors until further notice and placed restrictions on
individuals leaving their homes or
traveling.
The lockdown was also implemented across China’s vast rural areas, home to more than 700 million
people. These quarantine measures started during the
annual Spring Festival in mid-January, when
most rural residents had returned to their family homes to celebrate the Lunar New Year together.
Many were migrant workers who had expected to return to China’s urban and industrial centers to
continue working in
factories, construction sites, and service sectors.
In China’s urban hubs, local governments, school systems, and businesses made efforts to offset the
consequences of
these policies: many firms worked with
employees remotely through online plat
forms, and urban schools moved to
online learning activities. These efforts helped reduce the
fears
and economic repercussions for those who were able to
work from home and had access to high
speed internet. But what about the rest of China — the “Other China”?
Little is known about what actions were taken in rural areas as part
of the nationwide quarantine, and
even less is known about the effects of COVID-19
in China’s rural villages outside the COVID-19 epi
center during and after the
quarantine. To date, no study has empirically examined the economic and
social impacts of COVID-19 or its
countermeasures in a rural context. China’s rural residents are a rel
atively poor
subpopulation, with a meager social safety net at
best. Understanding the economic and
social effects of COVID-19 on China’s vulnerable rural population can offer urgently needed lessons
as the outbreak spreads to other middle- and low-income countries and regions around
the world.
To assess the effects of COVID-19 control measures on the
health and economy of
China’s rural popu
lation, a team of
researchers, led by the Rural Education Action Program (REAP) at
Stanford University,
conducted phone surveys with 726 randomly selected village informants across seven rural Chinese
provinces outside of Hubei, the epicenter of
the virus.1
1 The
response rate was almost 100%, since the respondents were either the mother or the
father of
a rural student who
had been
part of a study that REAP had conducted over the past year or
two. After answering the
phone, our survey enumerators identified
themselves as a team member who
had been a part of
their child’s school activities in the recent past. Parents almost summarily
agreed to
talk to us. The
schools in the original studies were randomly chosen and the
one parent of
the child from each school
was randomly chosen, meaning we
have a sample that is fairly representative of rural areas outside of
the epicenter.
52 labor reStrIctIonS and remIttanceS
Our village-level survey examined three overarching questions:
1. What disease control measures were in place?
2. How many COVID-19 infections and fatalities were there in each village? (That is, were the dra
matic quarantine measures working to
stop the
virus from spreading?)
3. What were the indirect impacts of these disease control measures on
employment, health
(beyond COVID-19 issues), and schooling?
First and foremost, our survey in mid-February found that all villages had universally implemented
extremely strict quarantine measures to
stop the
spread of the virus:
• 100% of
all villages had erected strict and high barriers to
quarantine their villages off from the rest
of China.
• 98% reported that all group gatherings (including weddings and funerals) had been temporar
ily banned.
• 97% reported that villagers could not
visit the homes of
friends or
family within the village.
• 86% reported that even their close family or
friends living outside the village were not permitted
to enter.
• 96% of informants reported that villagers were required to
wear masks to go outside (although
only 16% reported that masks were available for purchase).
• 95% reported they could leave the village to seek healthcare.
So, what was the direct impact on
the spread of
COVID-19?
This is the good news: The survey was clear that the draconian quarantine measures successfully
contained the spread of
COVID-19 in
rural villages. Only 4 village informants out of
726 reported
COVID-19 infections in
their villages, and of the
nearly 700,000 residents in these villages, only about
10 had contracted the
virus. No one in
any surveyed village reported deaths from the virus. This sug
gests that lockdown measures can
effectively minimize the spread of
the virus.
However, the question remains: what is the cost in terms of the lives and livelihoods of rural villagers?
Most notably, we found virtually no
one was working in the off-farm sector — either in a city
as a
migrant worker or in
the local township/county seat as an
off-farm laborer. Three-quarters of
infor
mants reported that villagers had stopped working because their workplaces were closed. An
even
greater share could not
work due to restrictions on
transportation or difficulty in finding housing
in the places they typically worked. This means that the employment of rural workers was essen
tially zero for a full month after the start of the
quarantine. Not surprisingly, 92% of village informants
reported that disease control measures had reduced their income levels.
labor reStrIctIonS and remIttanceS 53
Our research also found a number of other impacts from the
lockdowns on
education, nutrition, and
access to healthcare:
• 79% reported a negative impact on local children’s education.
• 63% reported that the prices of foodstuffs were higher than in 2019. Although the majority said
fruits, vegetables, and grains were all available, nearly half said the quality of
their diets fell — raising
questions about the impact on nutrition.
• 62% believed it had become more difficult to seek non-COVID-19 healthcare.
While everyone in China was feeling the
effect of the
COVID-19 outbreak after one month of
restric
tions, it is almost certain that rural residents took the brunt of the economic and social impacts. Our
analysis suggests a radical decline in employment
in China’s rural areas, due
at least
in part to restric
tions preventing migrant workers from returning to work. Whereas urban, salary-earning workers
were getting paid during the quarantine as
required by edicts issued by China’s central government,
rural workers are almost never on salary — if they don’t work, they don’t get paid. If we conservatively
assume 75% of rural migrants were confined to
their villages in February, nearly 200 million rural indi
viduals, who make an
average of
$500 every month, were not
working. On
a larger scale, this means
that after one month of
COVID-19 restrictions, China’s economy lost around $100 billion in rural
migrant worker wages alone. If we then add the lost wages of
the large rural workforce that live and
work near their home villages, the total economic loss is
significantly higher than $100 billion and
exceeds the highest estimate of the global economic impact of SARS — and
it still does not account
for all the other losses to the economy.
At the same time, however, there have been some positive developments. As in
urban areas, rural
governments have taken measures to reduce the negative effects of COVID-19 by encouraging online
schooling: 71% of
village informants reported that students were attending classes online. However,
we have yet to
determine the quality and rate of their learning in online classes. Our follow-up study
will tell us more.
Now we’re left asking, what happens after all control measures are lifted and rural residents are
forced to
try to
provide for their families with
a significant loss in income?
Our team conducted a follow-up phone call survey in mid-March, which looks predominantly at how
people reacted to
their economic losses when the quarantine policies were ending. Even with the
lift
ing of the restrictions on movement in March, at
least half — and potentially up to 60%
or 70% —
of the
rural workers, who had been working in
the previous year, were still not working. The radical decline
in employment during and after the quarantine clearly was already impacting the
livelihoods of rural
communities. Over half (53%) of the villages surveyed reported their local workers had lost approxi
mately two months’ worth of income. This represents about 17% of
their annual income. As
a result,
families have been forced to decide what essential commodities to cut down on so as to survive on
their now-limited funds. Villagers in the survey villages reduced their spending on food
(55%), edu
cation (10%), and (non-COVID-19) healthcare (9%). The prices of common goods in 2020 also were
reported to be higher than the previous year (2019)
in both February (63%) and March (66%) surveys.
In practice, this means that people are buying more grains and staples in
bulk at low cost in lieu of
54 labor reStrIctIonS and remIttanceS
more expensive goods like meat and produce. It also indicates that nutrition has declined —
at least
among a share of rural families. This is
particularly concerning for families with young children, as
REAP’s past research shows that nutritional deficiencies in early childhood can significantly inhibit
cognitive development, which is linked to
adverse outcomes in
later life.
As COVID-19 continues to spread across the globe, our findings have strong implications for other
countries that have adopted similar lockdown policies. Workers around the world are facing poten
tially huge losses of income
in the coming weeks
and months.
As governments implement COVID-19
control measures, they must also consider the needs of
economically vulnerable communities, or
face
dramatic increases in economic hardship and poverty among the
hardest hit.
Originally published March 30,
2020, and updated June 15, 2020.
labor reStrIctIonS and remIttanceS 55
12. Economic impact of COVID-19
on tourism and remittances:
Insights from Egypt
Clemens Breisinger, Abla Abdel Latif, Mariam Raouf, and Manfred Wiebelt
The economic impacts of the
COVID-19 crisis are increasingly hitting low- and middle-income coun
tries and the poor. International travel restrictions and the full or partial closure of businesses and
industries in
Asia, Europe, and North America have led to a collapse in global travel and are expected
to reduce the flows of remittances. Tourism and remittances are important sources of employment
and incomes for the
poor. This post
assesses the potential impacts of the expected reductions in
these income flows by using Egypt as
a case study.
The pandemic is
likely to have a significant economic toll. For each month that the COVID19 crisis
persists, our simulations using IFPRI’s social accounting matrix (SAM) multiplier model for Egypt sug
gest national GDP could fall by between 0.7% and 0.8% (EGP 36–41 billion or
US$2.3–$2.6 billion).
Household incomes are likely to
fall, particularly among the poor.
Egypt is a rising
star among emerging economies. Even though several reforms remain to be com
pleted, the reform program launched in 2016 has started to bear fruit: Egypt has achieved economic
growth of
over 5% in the
last two years. The tourism sector recorded its
highest revenues in 2018–19,
another sign of increased stability. Continued efforts aimed at
improving Egypt’s business climate
were expected to
lead to even stronger private sector growth and economic diversification in 2020
and beyond.
This progress will almost certainly be interrupted by the
COVID19 pandemic. While the government
is taking actions
to contain
the spread of the virus — including the suspension
of commercial interna
tional passenger flights, school and sports clubs closures, and a nationwide nighttime curfew — and
the number of
reported infections in Egypt is
currently low compared to that of many other countries,
the global economic slowdown is expected to have major knock-on effects for Egypt. International
travel restrictions are already curtailing tourism to the
country. The global slowdown is
likely reducing
payments received from the
Suez Canal and remittances from Egyptians working abroad. These three
sources together account for 14.5% of
Egypt’s GDP. Thus, any disruptions to these foreign income
sources will have far-reaching implications for Egypt’s economy and population.
Using the SAM multiplier model for Egypt, we simulate the individual and combined effects of a col
lapse in the tourism sector and reductions in Suez Canal revenues and in foreign remittances under
more and less pessimistic scenarios. SAM multiplier models are well-suited to measuring short-term
direct and indirect impacts of unanticipated, rapid-onset demand- or
supply-side economic shocks
such as
those caused by the COVID-19 pandemic. We model the demand shocks as
the anticipated
reductions in tourism, Suez Canal, and remittances revenues.
56 labor reStrIctIonS and remIttanceS
Figure 1 Estimated GDP loss per month, less pessimistic and more
pessimistic scenarios, as percentage of average 2019 monthly GDP
-0.9 -0.8 -0.7 -0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0.0
Tourism collapses
Suez Canal revenues drop 10%
Suez Canal revenues drop 15%
Remittances drop 10%
Remittances drop 15%
Combination, less pessimistic
Combination, more pessimistic
Source: Authors’ calculations.
Note: The
less pessimistic combination scenario assumes a 10% reduction in Suez Canal revenues and in
remittances. The more pes
simistic scenario assumes a 15% reduction in these payments. Both combination scenarios assume a complete absence of
interna
tional tourists. GDP
= gross somestic product.
Our results show the potential significant impact on
the economy and people for
each month that the
COVID-19 crisis persists. If the dynamic effects of
the COVID-19 shock on
the Egyptian economy are
different than those simulated, our results could be either under- or over-estimations of
the aggre
gate economic impact of the crisis. Also, effects from other channels may reinforce the effects of
the pandemic.
These expectations also assume that
there is no
change in the
current government policies in
place to combat the
crisis. This is important
to note,
as the government
is taking aggressive
action
to contain
the disease
and support
the economy
and people.
As such,
the model scenarios do
not consider
the impacts
of specific government economic policies, but are intended
to support
government decision-makers in
determining the
scale of their
support to the
economy and to
Egyptian households.
Figure 1 breaks down estimated losses in GDP, which may
hit 0.8% per month in the more pessimis
tic scenario. Lower tourist spending will affect not only hotels, restaurants, taxi
enterprises, and tour
ist guides, but also food processing and agriculture. Lower public revenues from Suez Canal fees are
likely to affect the government budget. Lower remittances income will likely reduce household con
sumption of
consumer goods and hit
sectors producing intermediate goods. We estimate that the
absence of
tourists alone may cause monthly losses of EGP 26.3 billion, or $1.5 billion. Thus,
the loss
in tourism revenues accounts for about two-thirds of
the total estimated impact.
Household incomes are estimated to decline by between EGP 153 or
$9.70 (less pessimistic sce
nario) and EGP 180 or
$11.40 (more pessimistic scenario), per person per month for each month that
the crisis continues (between 9.0% and 10.6% of
household income). The expected reduction in tour
ism has the strongest effect on
all households, making up more than half the
economic impact for all
household types in the model (Figure 2). Households are also affected directly and indirectly by lower
remittances from abroad.
labor reStrIctIonS and remIttanceS 57
Figure 2 Estimated household consumption loss per month under the
less pessimistic scenario, disaggregated by source of loss
EGP per person per month
-120 -100 -80 -60-180 -160 -140 -40 -20 0
All households
Poor rural REMIT+
SUEZ +
TOURISMPoor urban
Source: Authors’ calculations.
Note: The
less pessimistic scenario assumes a 10% reduction in Suez Canal revenues and in remittances. EGP = Egyptian pounds.
While all households are hurt by lower tourist expenditures, it is poor
households — and especially
those in
rural areas — that suffer the most from lower remittances. Due principally to the
relatively
greater decline in remittances that they experience, rural poor
households are estimated to lose in
total between EGP 104 and 130 ($6.60–$8.20) per person per month, or between 11.5% and 14.4%
of their average income, while urban poor households will see their incomes decline somewhat
less, between EGP 80 and 94 ($5–$6) per person a month, or between 9.7% and 11.5% of their aver
age income.
Policy considerations
If the crisis persists for at least three to
six months, as
many now believe likely, the cumulative loss
from these three external shocks alone could amount to between 2.1% and 4.8% of GDP in 2020.
Importantly, our simulations measure only the
effects that might result from specific impact chan
nels, namely, foreign sources of
remittances and revenues. Domestically, restrictions on
movement of
people and goods within the country and on certain productive activities may also have adverse eco
nomic impacts. On
the other hand, some sectors may benefit, such as
information and communica
tions technologies, food delivery, or
the health-related goods and services sectors.
The authorities have begun a course of decisive action to curb the
virus outbreak by allocating EGP
100 billion ($6.3 billion) and have enacted tax
breaks for industrial and tourism businesses, reducing
the cost of electricity and natural gas to
industries, and cutting interest rates. They are also consid
ering providing grants to seasonal workers. Additional measures may also be in the works, such as
increasing cash transfer payments to poor
households, increasing unemployment benefits, and pro
viding targeted support to specific sectors.
While the country’s focus currently is
rightly on
fighting the health crisis and mitigating its imme
diate impacts, planning on how to
re-open the economy should start
now. To emerge stronger
after the COVID-19 crisis, both the public and private sectors should continue to strengthen their
58 labor reStrIctIonS and remIttanceS
collaboration. The government should work to
further improve the business climate for the private
sector and continue undertaking serious reforms to overcome institutional weaknesses. The crisis
may also provide an opportunity to strengthen analytical capacity in Egypt to provide policymakers
with research-based solutions for safeguarding Egypt’s economy during future pandemics and
other crises.
Unless governments around the world take decisive action, the case of
Egypt suggests that poverty
is likely to increase in countries where tourism and remittances play a large role. It
is also a strong
reminder of the
interconnectedness of the
world and the importance of global cooperation to end
this crisis and to be better prepared for the future.
We thank Dr. Diaa Noureldin, Senior Advisor; Dr. Sahar Aboud, Principal Economist; Racha Seif Eldin, Senior Economist; and Mohamed
Hosny, Economist, all at the Egyptian Center for Economic Studies (ECES), for their inputs to this study through their excellent work on
ECES’ Views on News – Views on the Crisis series. We also are grateful to Xinshen Diao, James Thurlow, and Karl Pauw, all of IFPRI, for
their technical review and comments.
A more detailed description of the SAM multiplier model and the underlying assumptions are published as an IFPRI Policy Note.
Originally published April 1, 2020.
labor reStrIctIonS and remIttanceS 59
13. Significant economic impacts
due to COVID-19 and falling
remittances in Myanmar
Xinshen Diao and Michael Wang
The COVID-19 pandemic and government lockdown in Myanmar have led to falling exports and lost
revenue from tourism and international remittances, hitting the economy hard. In a new series of
policy notes, we examine the
economic impacts of the pandemic and restrictive measures to
mitigate
the health crisis, and offer policy recommendations to address declining incomes and other impacts.
Our analysis shows a major short-term economic contraction as
a result of the
two-week lockdown in
April — a 41% decline in GDP along with similar declines in most nonagricultural sectors in comparison
to the same period without a pandemic. This is not surprising, as Myanmar’s economy is deeply
integrated into a complex supply network both domestically and internationally, and policies affecting
certain industries have ripple effects on
other sectors through supply and demand linkages. In
addition, approximately 4 million Myanmar migrants work internationally, and their lost income due
to lockdowns in neighboring countries is expected to
impose ongoing significant burdens on
low
income households that receive remittances.
In our analysis, we
applied a social accounting matrix (SAM) multiplier model to
evaluate COVID-19’s
direct and indirect effects on Myanmar’s economy. The SAM multiplier model is a simulation tool that
describes the
economic connections between national economic actors and provides a highly disag
gregated picture of
the economy, which is
suitable for measuring the impacts of
short-term shocks.
The lockdown and subsequent restrictive measures have had direct and indirect negative impacts
on the flow
of goods and services, resulting in a decline of 41%
in national GDP during the lockdown
(Figure 1). The figure breaks down the decline further to show the different impacts of COVID-19
restrictions on
Myanmar’s various economic sectors.
We estimate that agricultural GDP fell 14% during the two-week lockdown. While agricultural activ
ities were mostly exempt from restrictions, the
linkages with sectors in the rest of the
economy led
to significant indirect impacts, including reductions in demand from non-agricultural sectors, fall
ing exports, lower consumer demand from falling remittance income, and difficulties in operat
ing agribusinesses.
On their own, these negative short-term economic shocks are sufficiently large to temporarily push
many Myanmar households into poverty and food insecurity. Moreover, our analysis shows that the
sharp decline in
remittance income is
likely to continue for at
least a year if not longer.
As a result,
many low-income households that sit just above the poverty line are expected to fall into poverty, and
the extremity of poor
households will increase (Figure 2).
60 labor reStrIctIonS and remIttanceS
Figure 1 Estimated percentage change in Myanmar’s GDP during
the April 2020 two-week lockdown period by sector, compared with a
normal situation without COVID-19 in the same period
Total GDP Agriculture Industry Manufacturing Construction Services
-10% -14%
-20%
-30%
0%
-41% -40%
-40%
n oitautis
lam
ronm
orfP
DG
n iegnPahce
gatnecre
-52% -50%
-56%
-60%
-70%
-82% -80%
-90%
Source: IFPRI social accounting matrix (SAM) model.
Figure 2 Percent declines in total income due to a 50% international
remittance shock and a 30% domestic remittance shock among poor
and low-income remittance-receiving households
Source: SAM model.
Note: Farm, nonfarm, smallholder, landless, and female-headed households are part of rural households. Includes remittance-receiving
households only.
labor reStrIctIonS and remIttanceS 61
Declines in total income from remittance shocks are consistently higher among low-income rural
households than poor rural households. However, though the shocks might result in
smaller relative
income losses for poor rural households, these households will see significant impacts because their
income levels were initially much lower. Note that negative impacts on total income are largest for
female-headed rural households.
The government recently released a comprehensive and sensible economic response package, the
Myanmar COVID-19 Economic Relief Plan (CERP), which includes unconditional cash and in-kind trans
fers to
the most vulnerable and affected households. The current analysis could be helpful in iden
tifying potential recipients among remittance-receiving households and in
determining the amount
of financial support they need. The anticipated total spending under CERP will be around 2.8 tril
lion kyat
(about US$2 billion). Considering that the
loss in national GDP estimated in our analysis is
between 6.4 trillion and 9.0 trillion kyat
by the
end of FY
2020, the size of this economic stimulus pack
age might be too modest to enable all firms, households, and the whole economy to
return to
their
pre-COVID-19 growth trajectories in
2021.
Originally published June 25, 2020.
62 labor reStrIctIonS and remIttanceS
63
( 一 )
FOOD TRADE
65
14. COVID-19: Trade restrictions
are worst possible response to
safeguard food security
Joseph Glauber, David Laborde, Will Martin, and Rob Vos
As COVID-19 spreads around
the globe, fears of a deep global recession are mounting. Some also
fear that food supplies may start
running short, especially if supply chains are disrupted. Others fear
that agricultural production may be disrupted by containment measures that restrict workers from
harvesting and handling crops.
While we should take these concerns seriously — especially for fruits and vegetables, which have com
plex supply chains, or
foods sold primarily through restaurants — they should not be overstated either,
especially not
for basic staples such as
rice, wheat, and maize. Global markets are well supplied,
stocks are healthy, production of
key staples is unlikely to be disrupted, and prices have remained rel
atively stable. Trade is allowing production to move from areas
of surplus to areas
of shortage, avoid
ing the drastic shortages and food insecurity associated with reliance only on local production.
But there will be serious threats to poor people’s access to food as
a consequence of lost income
from lockdowns and other restrictions. These should be addressed through measures that help main
tain access to food, rather than through policies like export bans that may further threaten that access.
The food price crisis of
2007–2008 shows, however, that policy concerns about food availability can
easily turn into a serious price crisis. At the
time, some grain-exporting countries responded by
imposing export restrictions, which pushed up world market prices of staples, leading other grain
producers to also limit exports in efforts to insulate their consumers from the initial food price rises.
Food-importing countries, worried about the higher cost of
food, in
turn lowered import tariffs on
food, supporting demand but keeping upward pressure on world prices. As
a result, instead of con
taining price increases, these policy responses only drove world market prices higher. In the case of
rice, these policy responses contributed almost half of
the world price surge in
2007–2008.
Unfortunately, once again several countries responded by implementing export restrictions, though
fortunately many of these were temporary. See our online tracker. Kazakhstan, for instance, sus
pended exports of
several cereal products, as
well as
oilseeds and vegetables, until June 30. Viet
Nam halted granting rice export certificates through the end of
March, but has since begun granting
them again. These restrictions, even if temporary, seem entirely unnecessary. Both countries produce
far more than they consume and have ample stocks. An export ban by two key exporters would limit
global supply and will certainly push up
world prices of staple foods if others follow suit.
How does the present situation compare with 2007–2008? Will we see a repeat of
the same pol
icy mistakes?
66 Food trade
Figure 1 Staple crop stock-to-use ratios, 2008 and 2019
25%
20% 22.3%Median 2000–2019
17.6% 17.5% 15%
14.5%
10%
5%
0%
2008 2019 2008 2019
WheatRice
Source: Authors’ computation using USDA-PSD data.
Some key facts
There is no shortage of
staple food inventories. The stock-to-use ratio is a critical indicator of
the
vulnerability of world food markets to shocks. Excluding China, the current global stock-to-use ratios
are close to their “normal value” (the median level of the last two decades), and substantially higher than
in 2008 (Figure 1), when markets were tight. The sufficiency of inventories explains in good part the
relative price stability in the markets for staples. The underlying situation is better than suggested by
these statistics when also considering China’s inventories of rice and wheat, which are sufficient for 10 to
13 months of domestic consumption.
Harvests are expected to be good.
The US Department of Agriculture projects an increase in
global wheat production of
5%, while rice production is projected
to remain about
the same as
in
2019. Production of these key staples is unlikely to suffer disruptions from the
COVID-19 crisis — at
least in major producing countries — since much of it is
mechanized, requiring relatively little labor
input, and takes place in areas with dispersed, already socially distanced, rural populations. Similarly,
there is low probability of disruptions to
international transport and distribution of these key staples
which, being dry bulk commodities, can be loaded, shipped, and discharged with minimum human
to-human interaction.
Food trade 67
World exports are heavily concentrated. Russia, the European Union, the United States, Canada,
and Ukraine together are likely to
account for 75% of
all wheat exports in
2019–2020. It therefore
matters a great deal what governments of
these countries do. So far, only Kazakhstan, which has a
3% share in global wheat exports, has announced export restrictions. However, Russia is now also
reportedly considering a ban on
wheat exports. The rice market is
equally concentrated, with 75%
of exports coming from the largest five exporters, and nearly a quarter from India alone. Viet Nam’s
world market share is 16%, and
as noted above
it has suspended new export licenses. India’s stock
to-use ratio for rice, however, stands at
an historic high of 34% and prospects for the 2020 harvest
are good, such that it should have no reason to consider export restrictions, although some concerns
have been expressed about difficulties moving products domestically.
What should be done?
The present outlook for staple food markets is much brighter than it was during the 2007–2008 price
spike. Hence, imposing trade restrictions now would be even more misguided than it was in 2008.
Rather, such policies could become the problem if Viet Nam and Kazakhstan maintain barriers and
other countries follow in
their footsteps. If they do, it could trigger food price spikes and speculative
behavior in agricultural commodity markets. The world’s poor would be the ones bearing the brunt.
Instead, trade channels should be kept open so that international markets can
play an
instrumental
role in in avoiding food
shortages and mitigating the
inevitable global economic downturn.
Major exporters and importers of staple foods should agree to desist from imposing trade barriers in
response to the
COVID-19 pandemic. Rather, as we
wrote in a previous blog post,
the focus should be
on measures that will help stave
off a global recession and minimize a further rise
in food insecurity
that way. For this, governments will need to
provide fiscal stimulus, including resources to
contain the
spread of the disease and ensure adequate healthcare is
available, as
well as
additional social protec
tion to
compensate workers and families affected by the virus and by containment measures.
Originally published March 27, 2020.
68 Food trade
15. COVID-19 border policies create
problems for African trade and
economic pain for communities
Antoine Bouët and David Laborde
The COVID-19 pandemic has triggered a range of
border controls in countries around the world to
curb the spread of the disease. In Africa, these moves have interrupted progress toward economic
integration. The African Continental Free Trade Area (AfCFTA), for example, was supposed to
estab
lish continentwide free movement of goods starting on
July 1. Now, the African Union Commission
has proposed postponing the launch until January 1, 2021. In addition, trade restrictions imple
mented in Africa and elsewhere in response to the pandemic are fueling fears of a new food crisis on
the continent (see IFPRI’s tracking of
export restrictions).
Across Africa, pandemic-related border controls are having many economic impacts, large and
small. Here, we examine these impacts and suggest ways to soften the
blow to
affected people
and communities.
Most African countries have closed land borders to
travelers, while still allowing freight to pass under
tighter controls, which sometimes allows the movement of
only agricultural and food products. Over
one 11-day period in March, 24 African countries imposed such measures on land borders (Figure 1).
Almost all these countries have also suspended the arrival of international flights, at
least from coun
tries particularly affected by the virus. Many governments have also imposed curfews.
The Democratic Republic of the Congo, Kenya, Liberia, and Namibia chose a different path: the entry
of people at border posts
is subject to temperature control and testing, followed by hospitalization
and/or quarantine if necessary.
These measures have been adopted to protect public health, but their economic consequences
could be significant. Stricter sanitary border controls on the
transport of products are likely to slow
intra-African trade. In addition, prohibiting people from crossing borders stops one means of informal
trade, widely practiced in Africa and often the
main source of income for a family. Informal trade
accounts for a significant share of recorded trade: for example, between 15% and 30% of
official
exports in Uganda.
The consequences of these measures for intracontinental trade are still unclear due to a lack of recent
data. Thus far, statistics compiled by the Food Security and Nutrition Working Group (weekly data
collected at border posts in East Africa — the only data available through the end of
March) do not
indicate a decrease in cross-border agricultural trade. Most of the border closures took place in the
second half of March, so it is too early to tell if data capture any effects. And only five countries (Djibouti,
Ethiopia, Rwanda, Sudan, Uganda) implemented border closures in East Africa during this period.
Food trade 69
Figure 1 Closure of land borders in Africa, March 2020
25
20
Zimbabwe
Botswana
Uganda
Gambia
Ethiopia
s e i
Sierra Leone
r t n u
Rwanda
Ghana
o c Republic of the Congo
Côte d'Ivoire
n a c i r f
A f
Gabon
Angola
Senegal
Mali
Eswatini
o r e b
5
15
10
Djibouti
m u
N
Guinea-Bissau
Cameroon
Benin
Algeria
Tunisia
Sudan
South Africa
0 Libya
13 14 15 16 17 18 19 20 21 22 23 24
Date in March 2020
Source: Authors’ elaboration from websites of US embassies in Africa and from al Jazeera.
Problems with border policies
Most border closures have been imposed with little clear knowledge of
what is happening on
the
ground. For example, in West Africa, because of
daytime heat, fresh produce, meat, and other perish
able products are usually transported at
night. Yet curfews make this practice impossible. Mandating
more thorough health checks without adding necessary personnel also increases transport times.
Health check delays and curfews are likely to cause significant waste and loss of
products in West
Africa, according to an interview with Brahima Cissé, a trade analyst with the
Permanent Interstate
Committee for Drought Control in the Sahel (CILSS).
Border restrictions on
travel can be particularly costly for livestock producers practicing transhu
mance — seasonally moving livestock between grazing grounds. This occurs between Sahelian coun
tries including Burkina Faso, Mali, and others to coastal countries such as Benin and Côte d’Ivoire; and
between Kenya and Uganda. Beyond their immediate economic costs, these measures threaten the
basic mode of
operation of pastoral agriculture.
70 Food trade
Travel restrictions can also make access to
inputs such as fertilizers or
pesticides more difficult.
The introduction of
exceptional measures provides a breeding ground for the abuse of
power. In
many parts of
Africa, it is
common practice for law enforcement officials to
set up checkpoints along
trade corridors to collect bribes. As recent measures have slowed road transport in West Africa, this
predatory behavior has increased in intensity: according to Cissé, bribe collection has increased by
30% per truck along these corridors since March.
Most of these measures were imposed with little warning, taking local populations by surprise and
leaving them to contend with the fallout. With informal trade interrupted, many people have had little
opportunity to find alternative livelihoods. For many families, the absence of income for even several
consecutive days can have devastating effects on
poverty and food security.
There has also been little international or regional coordination of
these border-related decisions.
For example, curfew times often vary between neighboring countries, compounding their eco
nomic impacts.
Finally, such measures may interrupt international technical assistance (health and/or food aid),
imposing significant economic, public health, and other costs.
Potential solutions
To address these hardships, governments should provide ample safety nets to those affected, for
example, informal traders making their living from cross-border trade. But safety nets are costly and
difficult to
design. How to
set up
these transfers in a period of
confinement (especially in the
absence
of possible digitalization of payments in some countries)? How
can measures be
put in place that take
into account the specific vulnerability and role of women?
The World Health Organization (WHO) has often expressed reservations about the border crossing
bans and their role in
protecting public health. They increase the likelihood that people will cross bor
ders through places not covered by customs authorities and evade health checks. TheWHO is also
concerned that governments might avoid publicly acknowledging an outbreak in order to avoid hav
ing their citizens targeted by other countries’ trade and travel restrictions.
Border checkpoints should be set up to
provide health checks and screening, possibly followed by
quarantine and/or hospitalization for the
infected. Such a system can provide important health infor
mation to the population and improve the distribution of
protective equipment, soap and disinfection
equipment, and access to water. In the East African Community (EAC: Burundi, Kenya, Rwanda, South
Sudan, Tanzania, Uganda), nine mobile laboratories have recently been deployed to provide system
atic testing, particularly along the
northern border between Uganda and Kenya.
Physical distancing requirements at
border crossings may also reduce the spread of the virus. But this
of course requires supplementing
the teams
of customs officers working
at border stations, so as not
to slow down cross-border trade too much.
Food trade 71
To reduce the
costs for farmers and transporters of
agricultural and food products, governments
should reconsider curfews, which hurt the transport of
perishable products. In terms of intra-Afri-
can trade policy, import taxes on agricultural and food products should be reduced to compen
sate for higher transport costs. A suspension of
export bans on
these same products should also
be considered.
New border restriction measures should be announced in advance in
order to
allow people to adapt
as best
as possible. Countries should also coordinate their policies to allow for exchanges
of informa
tion on
the spread of the
virus and responses. TheWHO Africa Regional Office and the Inter-African
Bureau for Animal Resources can help in
this regard. Regional Economic Communities can also play
an important role. In addition to
the EAC, the
Economic Community of West African States (ECOWAS)
is studying a plan
of action including the lifting of all land border and port restrictions on the free
movement of
agricultural inputs, including fertilizers and pesticides, and the promotion of social
safety net projects for
food and nutrition.
Finally, countries should not let the pandemic stop progress toward economic integration. The need
for the AfCFTA has been reaffirmed by influential figures such as Presidents Paul Kagame of Rwanda
and Cyril Ramaphosa of South Africa, as it
can provide not
only a solid basis for long-term economic
development, but also a means of
effectively fighting future pandemics by facilitating the cross-bor-
der trade of food
and medical goods. Virtual negotiations could begin in the coming days to set a
new start date, possibly before January 1.
Defining coherent policies in health and economic terms in
the face of a pandemic such as COVID-19
is a particularly complicated exercise. It already seems to be very difficult in rich countries with sig-
nificant financial resources and strong institutions. It is
obviously even more difficult in poor
coun
tries, where financial resources are very limited and institutions are sometimes weak. Policies adapted
for countries with strong institutions can
be inappropriate, or
even harmful, in countries with weaker
ones. For example, as we have seen, imposing stricter health controls along trade corridors
can
increase the predatory behavior of
local control authorities and make the situation worse. The inter
national community must therefore help these countries to take into account the
institutional environ
ment when implementing these policies.
Originally published May 12, 2020.
72 Food trade
16. COVID-19 lockdowns threaten
Africa’s vital informal urban food trade
Danielle Resnick
As COVID-19 begins
its spread across Africa, concerns are growing about how the pandemic will
affect the
region’s already fragile food systems, especially in densely packed cities.
Much of the region’s urban population works in the informal sector — many in wet markets and as
street vendors — and depends on it
for food, so lockdowns and other social distancing measures
could pose major problems both for consumers and workers.
Traders often migrate daily to city centers on
minibuses and via
other forms of public transportation,
work in
very close proximity to each other, and do not
have the ability to take off
work if they feel sick.
National lockdowns, such as those in Rwanda, South Africa, and Zimbabwe, and city lockdowns in
Benin, Côte d’Ivoire, Democratic Republic of
the Congo, Ghana, Nigeria, and Uganda, could prove
disastrous, since such traders provide the majority of
food to Africa’s urban poor. How food
traders
are managed could have substantial ripple effects on
the nutrition and income prospects of many
across Africa.
How will governments respond as
the pandemic continues to
spread? The record is worrying.
First, African governments have a history of
cracking down on
informal traders, especially during
public health crises. When the Zambian government used the military to close down markets during
Lusaka’s 2018 cholera outbreak, farmers who sold their fresh produce to informal traders lost a signifi
cant amount of income.
Second, as the
trend of
government decentralization has widened in Africa, many of these markets
and street vending activities have fallen under the mandates of
local governments. Thus they now
generate significant tax
revenue — not only for critical public services to combat COVID-19, such as
water, health clinics, and waste collection, but also to
pay the salaries of local government bureau
crats. Shutting them down would therefore have negative effects on
the broader urban politi
cal economy.
Third, during the food price crisis of 2007–2008, African cities were major sites of
unrest, and this
could reoccur if prolonged market lockdowns cause a large spike in food prices. There are already
some early signs of price increases for food staples in Rwanda and in
Kinshasa. Spiking food prices
can spark protests, which would present yet another public health problem: in a region with relatively
low levels of
state capacity, it could be difficult for governments to peacefully discourage group pro
tests to avoid the spread of
infection.
Food trade 73
To manage this potential looming crisis in urban centers, local political leaders should be commu
nicating now with market leaders about how to best handle a possible shutdown. Despite outward
appearances of
disorderliness, many markets are actually well-governed by cooperatives or
associ
ations organized along product lines. Their leaders could identify what supplies traders need to
stay
safe, where to set up hand-washing stations, and ways to
reduce density by alternating the days trad
ers come.
To both discourage travel to markets and still provide traders with some income, city
governments
could also consider temporarily relaxing bylaws that prevent citizens from selling outside their homes.
Based on
India’s experience with a nationwide lockdown thus far, some other feasible options include
opening markets every other day and sanitizing on the off
days, and allowing for trading around the
clock to reduce consumer congestion.
In the longer term, crises represent critical junctures for essential reforms and innovations. Every year,
thousands die due to cholera outbreaks in African cities because of unsafe water and sanitation, and
markets can
be major sites of infection. At the extreme, Zimbabwe’s capital, Harare, shut down its
main waterworks in late 2019 due to
a lack of
foreign exchange to
import treatment chemicals, deep
ening an ongoing national water crisis. If washing hands with clean water and soap are the main way
to prevent the spread of
COVID-19, perhaps the pandemic will finally lead to larger investments in
this
crucial area.
Similarly, like their counterparts elsewhere in the world, informal food traders in Africa have long
been excluded from traditional safety nets enjoyed by those in
the formal sector, including sick leave
and pensions. Due to their diverse backgrounds and
volatile incomes, they can
also be insufficiently
targeted by cash transfer programs that rely on
means or
proxy-testing. Instead, traders usually rely
on rotating credit groups and neighborhood and funeral associations to offer support in the event
of idiosyncratic shocks. With a systemic shock like COVID-19, such ad
hoc social coping mechanisms
are likely to be strained. Thus, it’s key to find ways to make social protection systems more inclusive of
diverse sets of urban traders. In this regard, South Africa’s promise to create a safety net for informal
workers in response to this crisis should be closely watched.
Informal food
traders in Africa are the heartbeat of
their food systems, providing income for farmers,
nutrition for poor consumers, and resources for essential urban services. It is
imperative that African
governments account for
them in
their COVID-19 responses, and not
further relegate them to the
shadows of the economy.
Originally published March 31, 2020.
74 Food trade
1.
F A R A N S A R E E K
INOM 10AR A M A R I E N
Fly
Emirate
75
76
SUPPLY CHAINS
77
17. How COVID-19 may disrupt food
supply chains in developing countries
Thomas Reardon, Marc F. Bellemare, and David Zilberman
COVID-19 is spreading through the developing world. Many low- and middle-income countries are
now reporting growing numbers of
cases and imposing rigorous lockdown regulations in response,
which impact all aspects of
the economy. How will COVID-19 affect food supply chains (FSCs) in
developing countries?
The evidence suggests that the
impacts will be felt widely, but unevenly. Farm operations may be
spared the worst, while small and medium-sized enterprises (SMEs) in urban areas will face significant
problems. Governments will have to develop policies to respond to these varied impacts to avoid
supply chain disruptions, higher food prices, and severe economic fallout for millions of
employees.
For context, here is what the
literature tells us about FSCs in developing countries (see also Table 1):
• Most urban and rural consumers now depend on
markets, in
contrast to 30 to 40
years ago when a
large share of
rural populations lived “off the grid” in
subsistence agriculture. Consumers purchase
80% of all food consumed in
Africa and Asia, and thus FSCs provide 80% of
all food consumed
(Reardon et al. 2019).
• Modern FSCs (dominated by large processing firms and supermarkets, capital-intensive, with
rela
tively low labor-intensity of
operations) constitute roughly 30%-50% of the food systems in
China,
Latin America, and Southeast Asia, and 20% of the
food systems in
Africa and South Asia.
• Transitional FSCs (stretching from rural to
urban areas, fragmented and dominated by thousands
of labor-intensive SMEs) dominate food systems, constituting 50%-80%
of the food economies of
developing Asia and Africa. SMEs in
transitional FSCs in developing countries tend to be found in
clusters such as dense sets of food processing SMEs, scores of
meal vendors at
truck stops, and
dense masses of wholesalers and retailers in
public wholesale markets and wet markets. Each of
these clusters could have numerous SMEs. In these venues, large numbers of
clients gather in
dense crowds.
What might happen to food supply chains
Here are seven hypotheses, based on what we know so far, about the
likely effects of COVID-19
on
FSCs in developing regions:
1. Direct impacts will overwhelmingly be felt
post-farm. Namely, in the
“midstream” (e.g., whole
sale, logistics, and processing) and “downstream,” in
food-service enterprises.
78 SuPPly chaInS
table 1 The three stages of food supply chains and their prevalence in
the food economy
TRADITIONAL
FSC
TRANSITIONAL
FSC
MODERN
FSC
10% 70% 20%
Approximate prevalence in
Africa & South Asia as share of
food economy
Approximate prevalence in
Southeast Asia&Latin America
as share of
food economy
5% 50% 45%
Main enterprise type Home
microenterprise SMEs, wet markets
Supermarkets,
large processors
Length Short, local Long, rural-urban Long, rural-urban,
international
Use of arrangements No contracts,
no standards
No contracts,
public standards
Emerging contracts,
private standards
Technology Labor-intensive Labor-intensive Capital-intensive
Source: Authors.
Note: FSC =food supply chains. SME= small and medium-sized enterprises.
2. The impacts are likely to be
largest in dense urban and rural peri-urban areas. Given
the
properties of the
novel coronavirus, which is transmitted most easily via human contact, greater
population densities tend to facilitate its
spread.
3. Effects will be
strongest in
the downstream segments of
retail and food service. These
downstream firms are mostly informal-sector SMEs, and are thus labor-intensive with high densi
ties of
workers in
small spaces. They have little control over the hygiene practices of
their product
suppliers or
their customers’ habits.
4. Retail and food
service firms in modern FSCs face fewer problems. They are
far less vulnera
ble to mandatory business closures, and also face a lower risk of
clients and employees contract
ing the disease. The least affected are likely to be supermarket chains. Their stores can enforce
the flow of entering customers and social distancing measures. Supermarkets and fast-food
chains also have more control over the food safety and hygienic practices of their FSCs, as
they
typically vertically coordinate with contracts and private standards (Swinnen and Maertens 2007).
5. Direct impacts
on farm populations and farm production
will be much smaller than
on the
FSC downstream and midstream. This is because most small farmers in developing countries
SuPPly chaInS 79
rely on family labor. The farm sector, however, will be affected indirectly by COVID-19 through the
disruption of
input supply chains, and of consumer demand due to lost income and other eco
nomic impacts of
the pandemic.
6. COVID-19 is
likely to increase food prices, both
as a cause and consequence of
food short
ages. Restrictions on FSC logistics will increase transaction costs and thus consumer prices.
Speculative hoarding may occur and trigger price increases. Higher food
prices are, in turn, likely
to signal impending shortages. These effects can
compound each other in a vicious cycle likely to
cause social unrest (Bellemare 2015).
7. COVID-19 responses will create economic hardship. Enforcing social distancing and lim
its on internal and external logistics in FSCs will transform health-risk problems into income and
employment risks and political risks.
Implications, strategies, policies
Clearly, the segments of FSCs in the developing world most vulnerable to
COVID-19 impacts are the
midstream and downstream segments. This will present significant challenges for the people working
in them and likely lead to broader economic and operational changes going forward.
As most of these FSCs are in the “transitional” stage, they are composed mostly
of informal sector
SMEs, with employees lacking formal registration and
safety nets such as
unemployment insurance.
In the short term, millions of these businesses will face lower foot traffic, lower incomes, and substan
tial unemployment.
In the medium term, COVID-19 impacts on these segments may be like episodes of
avian flu in
Southeast Asia in the 2000s, which induced rapid concentration, leading to the rise of large process
ing firms and supermarkets.
How should governments respond to minimize supply chain disruptions and fallout from lockdowns
and other restrictions? The general strategy must be
two-pronged: implement robust public health
measures to slow the spread of
disease; and address food security impacts, particularly the
poten
tially enormous effects on income and employment.
This strategy presents significant challenges for developing countries. Addressing the FSC issues will
require three complementary policy paths. In the short run, implement new, broad safety nets for
SMEs and workers in the midstream and downstream segments of
FSCs; for example, governments
could use cash-for-work schemes to employ workers to
distribute emergency food rations, upgrade
sanitation in
wholesale markets and wet markets, and
maintain essential operations in
their own
enterprises so that the latter are there when the
crisis passes. In the short and medium term, mon
itor and regulate wholesale markets, retail wet markets, and processing clusters more strictly, and
redesign their sites for improved health practices. Finally, make long-term investments to help SMEs
change hygiene practices and improve site design to
help them remain competitive.
Originally published April 2,
2020.
80 SuPPly chaInS
18. Impacts of the COVID-19 crisis on
vegetable value chains in Ethiopia
Seneshaw Tamru, Kalle Hirvonen, and Bart Minten
On March 13, the
first COVID-19 case was confirmed
in Ethiopia. Three days later, the government
closed schools, banned all public gatherings and sporting activities, and recommended social
distancing. Other measures to
contain the spread of
the virus soon followed. Travelers from abroad
were put
into a 14-day mandatory quarantine, bars were closed until further notice, and travel
through land borders was prohibited. Several regional governments banned all public transportation
and imposed restrictions on
other vehicle movement between cities and rural areas.
While these actions are expected to slow the
spread of the disease, they are likely to
have substantial
effects on food value chains, and thus on the livelihoods of farmers and other workers, and
on consumption.
To understand these effects, we conducted a qualitative and rapid appraisal of
the vegetable value
chain. Building on
a large value chain survey that IFPRI undertook in
February 2020, we conducted
phone interviews (March 23–April 2) with key stakeholders along the
vegetable value chain from
the main producing areas in
the Central Rift
Valley to
Addis Ababa. Small-scale farmers, large-scale
investors, brokers, agro-input dealers, and developmental agents were interviewed. Given that this
assessment was based on
a limited and nonrepresentative number of
interviews, caution is war
ranted for extrapolation of our observations. They should be seen more as
hypotheses of impacts on
these value chains. (We intend to substantiate these findings with more representative surveys in the
near future.)
Effects downstream and midstream in the vegetable value chain
1. Vegetable trade and consumption are reduced. There is
less trading activity in
Addis’s vegeta
ble wholesale market (Atkilt Tera) since the start
of the COVID-19 crisis, despite this period being
the fasting season when vegetable consumption is
usually higher. Based on our interviews, this
seems to be linked to four factors:
• There is a presumption among some urban residents that consuming raw vegetables increases
the likelihood of contracting and spreading the
virus, reducing demand for certain vegetables.
• Some — especially larger and wealthier — traders are taking precautionary measures to
avoid
exposing themselves to the virus. These measures appear to have reduced their vegetable trad
ing activity.
• The travel bans have reduced the volume and frequency of
trucks coming to Addis Ababa.
SuPPly chaInS 81
• Restaurants and other eateries have experienced a slowdown in
business, and are opting to
reduce vegetable purchases, among other responses.
2. Urban retail prices are not significantly affected so far. Both supply and demand appear to be
impacted simultaneously: the
lower urban demand that typically leads to a reduction in
vegetable
prices is balanced by a declining vegetable supply
to Addis Ababa.
Effects on farmers
1. Producer prices for
vegetables are on
the decline. Fewer traders are traveling to rural areas
because of the
travel ban, the social distancing policy, and fear of
infection. Combined with
reduced urban demand and oversupply, producer prices are rapidly declining. For example, a
quintal (100 kg) of head cabbage that sold for about 300 birr ($9) about two weeks earlier sold
for only 100 birr ($3) at the end of March. Similarly, onions that sold for
15–17 birr ($0.50) per kg
about two weeks earlier were selling for about 9–10 birr ($0.30) per kg at
the end of March, a 40%
decline. (A few key informants in
these rural areas linked the price declines to a seasonal pat
tern, however.)
2. Farm losses seem to be
increasing. A number of
farmers we contacted indicated that they had
to leave some vegetables in the field to rot due to the lack of buyers.
3. There is a shortage of
farm inputs and their prices are increasing. Prices of important inputs
crucial to
vegetable production — including fungicides, insecticides, herbicides, fertilizers, and
improved seeds — are increasing due to shortages. These seem to be linked to land border clos
ings, which have blocked (sometimes illegal) imports from neighboring countries, and to
reduced
imports from China.
4. Labor is becoming scarce. Vegetable production is labor intensive and the Central Rift Valley,
where most commercial production occurs, usually attracts a large number of
daily laborers
from across southern Ethiopia. These laborers often gather in
set locations in
rural towns to be
picked up by vegetable producers. However, in response to
restrictions on travel and gather
ings (informally imposed by the regional police), these workers are increasingly returning to their
home areas.
Conclusions and implications
The COVID-19 pandemic is beginning to
disrupt food value chains in
Ethiopia and elsewhere, impact
ing the livelihoods of farmers and the diets of
rural and urban households. These effects are likely
to hit
the poorest and most vulnerable farmers and consumers the
hardest, but they are not
yet well
understood. More evidence is needed to guide the government and other organizations in devising
responses. While not
representative of the whole value chain, our interviews with
vegetable produc
tion stakeholders have a number of potential policy implications.
82 SuPPly chaInS
First, urban demand for fruits and vegetables — high-value, nutritionally rich foods — is declining. It is
possible that this is driven by misinformation regarding the risk of
contracting COVID-19 from pro
duce. If so, there is a need
for widespread and effective information campaigns.
Second, trade is affected by travel bans, as
well as
reduced competition, because traders are less will
ing to travel to
production areas. Making sure that travel bans do not
negatively affect food trade is
paramount. To reduce the
need for travel, enhanced trading through smartphones, virtual purchas
ing, and e-payments could be considered so that only truck drivers who pick up
loads would need to
travel, and traders and brokers would not need to travel.
Third, farmers are apparently hit in two ways. Producer prices are lower, and input prices are up or
inputs are not available. Farmers will thus have less incentive to produce these crops, likely leading to
lower yields and production in
the near future. To avoid further disruptions to the food supply, ensur
ing the availability of
agricultural inputs to
farmers at
low prices and assuring incentives for produc
tion should be a priority for
the government in the next few months.
Ethiopia Strategy Support Program senior research fellow Alemayehu Seyoum Taffesse and IFPRI senior technical and policy advisor
Anne Bossuyt also contributed to this post.
Originally published April 13, 2020.
SuPPly chaInS 83
19. Chinese livestock farms struggle
under COVID-19 restrictions
Xiaobo Zhang
After the COVID-19 outbreak began in December in Hubei Province, many Chinese villages were
locked down to control the spread of the
disease. As
the epidemic has eased, China has only begun
to lift some restrictions. The lockdowns have had a significant — and still not well-understood — impact
on the agriculture sector. The effective supply of agricultural products forms the foundation for a
sta
ble, functioning economy and safeguards people’s livelihoods. Thus, keeping agricultural enterprises
running is an indispensable economic component
in the ongoing battle against the epidemic — yet
discussions of the outbreak have thus far devoted very little attention to the challenges they face.
There are two key problems now.
First, livestock farmers face severe pressure from supply and market disruptions, since animals need
to eat every day and production cycles are short — daily for
dairy, six weeks for chickens, and three
months for
pigs. In addition, the pork industry is still reeling from the 2019 outbreak of
African swine
fever that reduced the country’s pig herd by more than 40% and drove up prices.
Second, the arrival of the spring plowing season is putting crop farmers in a bind. They urgently need
to return to work. But the outbreak and ongoing control measures present many challenges. While
manufacturing and service enterprises can flexibly adjust their production schedules to mitigate
losses arising from the epidemic, the agriculture sector waits for no
one. The normal phase of
spring
plowing includes the provision of labor, seed, fertilizer, pesticide, and agricultural machinery, all
within a set timeframe. Once smallholder farms miss the
necessary services, such as plowing and pol
lination, during the
critical farming season, their income for
the entire year will fall.
To understand the operational situation and demands of
small, medium, and micro enterprises
impacted by the epidemic, the Enterprise Survey for
Innovation and Entrepreneurship in China
(ESIEC) project team conducted telephone and online follow-up interviews in February with enter
prises surveyed over the past three years, which include some in the
agriculture sector. The survey
probed their work resumption and production situation, the main difficulties they face, their efforts to
adapt, demands for appropriate policies, and other issues.
Most Chinese farms are household smallholders and not registered as
enterprises. Therefore, our
survey does not capture the direct impact on crop farms. But other types of
agribusinesses, such as
mechanization services, pollination services, fertilizer dealers, and livestock farms, are covered in our
sample and provide a broad picture of
the impacts. As of
February 10, only 24.6% of
agricultural busi
nesses had resumed production. Since these businesses provide key inputs or
services, interruptions
in their services may negatively impact agricultural production.
84 SuPPly chaInS
In our analysis, we
found that the main issue agricultural enterprises face is disruption of
logistics,
especially shortages of
raw materials and delivery problems. The stress is
particularly acute for live
stock farmers: 38.5% of them list “logistics disruption” as
the biggest challenge, compared to 35.6%
of all agricultural enterprises, 19.7%
of non-agricultural enterprises, and 18.9%
of the service sector.
Shortages of raw materials — in particular an
inadequate supply of feed to livestock farmers — are
the main result of these disruptions. While about 60% of
the agricultural enterprises surveyed have
encountered such shortages, they are most severe in the livestock farming sector — where feed short
ages mean that animals and poultry may starve to death. With the preexisting problems and lin
gering high prices from the swine fever outbreak, the industry faces a crisis that could lead to more
price spikes.
Overall, respondents’ two most common complaints were that feed could not be delivered to
the
farms, and that trucks could not
enter villages to collect their products.
The results can be dire. On
February 13, for
instance, a beekeeper in Sichuan Province committed
suicide after his bees starved to death because his truck of beehives was not allowed to travel across
regions to
provide pollination services as
scheduled. The lack of
pollination services may lead to
lower yields for many crops.
What policies are needed to address these problems? More than other industries, agricultural enter
prises and particularly those in the livestock farming sector say they prefer rent reductions, financing
support, and especially force majeure certification.
Our survey makes it clear that, apart from the above options, a simpler and more direct demand often
expressed by the entrepreneurs is
that the lockdown be ended. The Chinese government has already
rolled out
a series of
pertinent measures, including opening a “green channel” for feed, in order to
effectively stabilize agricultural production. However, this has not yet been implemented in all areas.
While all relief efforts are important, it is
even more urgent that these measures be implemented at
the grassroots level. While maintaining effective control of the
epidemic, it should be of the greatest
importance to encourage enterprises in
rural areas to return to work.
Given that other countries and regions around the world have also adopted lockdown policies, the
survey results suggest that as spring arrives, agricultural enterprises in many places face serious logis
tics problems, and that livestock farming also faces challenges similar to
China’s — problems that may
require government intervention to avert shortages or
price spikes.
Originally published March 26, 2020.
SuPPly chaInS 85
86
GENDER
87
20. Why gender matters in COVID-19
responses — now and in the future
Agnes Quisumbing, Neha Kumar, Ruth Meinzen-Dick, and Claudia Ringler
To contain the spread of
COVID-19, health ministries and the World Health Organization (WHO) are
advising everyone to keep up to
date on
latest developments, wash hands frequently, stay at home,
and practice physical distancing when outside the home.1 These recommendations are inconve
niences for most people in Europe or
the United States, but for many in
developing countries, even
these basic precautions will be difficult to implement.
Here are some ways these public health recommendations affect women and men differently in
developing countries, particularly in
rural areas — and
some ideas for how to address the
disparities.
Stay informed
WHOrecommends that everyone keep up to date on the latest information on COVID-19. This is a par
ticular challenge for rural women, who have lower literacy and numeracy rates and less access to mod
ern information and communications technologies. Mobile phones are seemingly ubiquitous, yet out of
more than 2 billion people in low- and middle-income countries, only 82% of womenown one —mean
ing 393 million are excluded, mostly in rural South Asia and Africa. Even women with access may not
have their own phones, andtend to use a smaller range of services.
Key barriers for women include affordability; literacy and skills needed to use the device; safety and
security (including personal safety) when using the device; and lack of
family approval. The gen
der gap tends to be particularly high in
rural areas. To address these disparities, IFPRI, together with
partners in Kenya (Groots Kenya), India (Self-Employed Women’s Association–SEWA), and Uganda’s
extension service, is
testing alternative ways to
reach women farmers with information, including
WhatsApp, posters, and videos. Some countries and organizations are providing free cellphones or
airtime to women to
support them during the
crisis.
Hand-washing
Frequent hand-washing with soap is a key measure
in the fight against COVID-19 — but
out of
reach for
many households. In 2017, 3 billion people still lacked basic hand-washing facilities at
home: 1.6 billion had limited facilities lacking soap or
water and 1.4 billion had no
facility at all.
1 Other recommendations include respiratory hygiene and to
avoid touching eyes and mouth as well as to
seek medical help early if
needed. The
reference was last accessed June 4,
2020, and it
is frequently updated.
88 Gender
Unsurprisingly, this deprivation falls mostly on the poor; nearly three-quarters of the population of
least developed countries lacked hand-washing facilities with soap and water.
The task of
procuring water for hand-washing and other domestic uses falls disproportionately on
women and girls. Strict lockdown rules in many countries, including curfews and limits on congregat
ing at common water distribution points, further compound these problems.
There are, however, promising interventions. In Bangladesh and Uganda, for
example, the
“tippy tap”
— a simple, low-water-usage device — has been promoted to improve hand-washing, and combined
with behavior change communication (BCC) targeted to women. IFPRI, under the CGIAR Research
Program on Water, Land and Ecosystems, has supported cost-effective social learning interventions
to change sanitation behavior, with lessons for COVID-19.
Stay at home
“Stay-at-home” recommendations and the strict lockdowns in many countries have left both men and
women jobless. Many migrant workers also lost their jobs and had to return to rural homes. In many
contexts (for example in Middle Eastern and North African countries, India, Nepal, and Tanzania),
women whose husbands migrate gain autonomy in decision-making, which is often cherished despite
the increase in
responsibilities. As
male migrants return home, women suddenly lose this autonomy
and their role as the de facto household head.
On top
of the financial stress
to individuals and families, confinement can lead to mental stress. For
men, who are typically seen as
and consider themselves to be their families’ breadwinners, loss of
employment and income may result in mental health problems and/or domestic violence as
an outlet.
Men may also lose contact with their peers, exacerbating stress.
For women and children, quarantine conditions thus increase tension and exposure to
potential per
petrators. Overburdened health services — often the
first point of
contact for women experiencing
domestic violence — may be unable to respond. A comprehensive review by Peterman et
al. (2020)
identifies potential direct and indirect pathways between pandemics and violence against women
and girls — including effects on
economic insecurity and poverty-related stress, increased exposure
to exploitative relationships as
household structure and composition change, and the inability of
women to temporarily escape abusive partners.
Stay-at-home orders also make it
difficult for many women to procure food for cooking, one of their
key responsibilities directly affected by COVID-19. Women may have to prioritize the limited amount
of time permitted outside the home among a number of tasks, choosing between foregoing procur
ing safe water or food or
fuel for
their children and families. And food
insecurity may affect women
more than men, as seen in previous work on
the food price crisis of
2007–2008.
Gender 89
Physical distancing
Yet we should not underestimate the resilience of
women’s groups. PRADAN, one of India’s largest
NGOs, is using these groups as a platform for community kitchens, providing meals to
those in need
(especially migrants returning from urban centers). SEWA is developing risk communication and com
munity engagement plans using grassroots leaders and WhatsApp to educate members about pro
tecting their families’ health. Thus, while conditions are more difficult, existing women’s collectives
are proving a valuable asset in the pandemic response, and may take on potential new roles such as
testing and contact tracing. Gender-sensitive programming could also look into supporting men in
their care-giving roles as
well as
providing psychological support.
Other consequences of the pandemic: Illness, death, and loss of
schooling
Our previous work in Bangladesh and Uganda shows that shocks like illness and death affect men
and women differently. The burden of caring for the sick falls disproportionately on women’s shoul
ders, so in the short term, their exposure to sick individuals may increase their risk of
contracting the
virus. Moreover, women’s assets may be sold first to cope with illness; in
the longer term, such losses
may leave them more vulnerable to
future shocks. Emerging evidence seems to
indicate that men are
dying of
COVID-19 at
higher rates than women, possibly due to a combination of
biological and social
factors. The death of
an income earner may severely affect women, depending on
inheritance pat
terns and practices upon marital dissolution (whether through death or divorce).
As their small businesses collapse and their informal work arrangements are cancelled, women will
lose financial independence, affecting their empowerment in the short term, with potential longer-term
impacts on
children’s schooling (particularly for girls). This, in turn, could affect female labor-force
participation in the next generation.
Strengthening women’s assets should be a key priority in pandemic response and recovery. Because
women’s assets are often the first sold in economic crises, protecting them to
the extent feasible and
rebuilding them following COVID-19 will be crucial. Such efforts also support women’s empower
ment. Rebuilding the social capital embedded in women’s groups may also empower women to be
more aware of and
to avail themselves
of public services, and to provide the leadership their commu
nities need.
While WHO’s COVID-19 guidelines are essential for
everyone’s health, it is
clear that women face chal
lenges in implementing them that are quite different from those faced by men. Women need support
from governments and international health and women’s organizations — now and in the future — to
ensure that the pandemic does not
wipe out
decades of gains in women’s empowerment and family
well-being.
The CGIAR Research Program on Policies, Institutions, and Markets (PIM) provided support to IFPRI research cited in this post.
Originally published April 22, 2020.
90 Gender
21. Why gender-sensitive social
protection is critical to the COVID-19
response in low- and middle-income
countries
Melissa Hidrobo, Neha Kumar, Tia Palermo, Amber Peterman,
and Shalini Roy
Many governments are using social protection programs to respond to the economic crisis and
health risk induced by COVID-19. As of
April 17, 133 countries had adapted or introduced 564 social
protection initiatives, according to the World Bank. With the focus on rapid assistance, gender con
siderations have understandably not been at
the forefront of
these efforts. A rapid assessment
of initial COVID-19 social protection responses indicates that only 11% show some (albeit limited)
gender-sensitivity.
This is unsurprising — most existing social protection programs in low- and middle-income countries
(LMICs) are either gender-blind or
neutral at
best — but it
is worrying. The COVID-19 crisis has the
potential to widen gender inequalities, including those related to loss of
livelihoods, reproductive
health risks, disproportionate burden of care, and violence against women and children. Social pro
tection that does not take gender into account can reinforce these inequalities.
General guidelines for COVID-19 social protection responses are available, but how can
governments
address gender inequalities? Designing gender-sensitive programming is not always straightforward,
but evidence suggests simple design and implementation adaptations can make programming more
gender-sensitive. While there is no
one-size-fits-all approach, in a new brief summarized below, we
provide key lessons, considerations, and guidance across five areas.
1. Adapting existing schemes and choosing the forms of
social protection
Adapting existing schemes to be contagion-safe is a likely first step for governments, and these
adaptations can
have gender implications. Relaxing existing conditions (for example, those tied to
work, health, or schooling) can simultaneously reduce viral spread and benefit women who are often
responsible for fulfilling conditions, may be mobility-constrained, and may have fewer social or
infor
mation networks.
Gender 91
Expanding access to healthcare via fee waivers or
providing automatic health insurance
enrollment can
support women in
continuing to seek care for
critical, routine maternal and child
health and reproductive health services. Cash benefits (via e-payments) are widely recommended;
cash can also improve household economic security and emotional well-being, which directly ben
efit women and can contribute to reducing intimate partner violence. However, the feasibility of
safely providing additional in-kind transfers (including food or soap) should be considered as
well,
as women and children are often the first to reduce
food consumption in response
to food insecu
rity, and women may be responsible for daily shopping, exposing them to
potential infection. In-kind
transfers should be considered where mobility is restricted, markets are limited, food prices spike, or
COVID-19 restrictions induce supply chain closures.
When social distancing restrictions are relaxed, implementers of
public works programs should
ensure dignified work with fair wages where women can
safely participate, with exemptions for lac
tating and pregnant women. When schools reopen, implementers should pay particular attention to
re-enrollment of adolescent girls and relax economic constraints with appropriate policy instruments.
2. Targeting
How to
target households and individuals are critical considerations. Retaining the original individ
ual-level targeting of many existing programs may
be most straightforward; however, such target
ing can exclude vulnerable populations. For example, unemployment insurance typically does not
cover informal workers, including the
majority of women who primarily work
in the informal economy.
Providing universal household-level transfers can reach more vulnerable people, but who the house
hold’s “named recipient” is may also have gender implications. Although broader evidence
is mixed, a
few studies from LMICs indicate that naming female recipients may improve women’s empowerment.
We believe the
evidence supports considering women as named recipients — while recognizing that
particularly acute periods of the crisis (such as
lockdowns) may intensify household tensions.
Therefore, in settings where existing analysis shows the feasibility and acceptability of targeting
women, we see gains in
continuing during the COVID-19 crisis. But in
settings where targeting women
was previously deemed infeasible, we do not recommend starting during the crisis and explicitly
challenging norms during a time when tensions are high. Nonetheless, even in
the latter case, minor
tweaks in
operationalizing targeting — including authorizing multiple household members to make
transactions, ensuring information reaches both men and women, and providing messaging that ben
efits are for the
entire family — could contribute to greater gender equity.
3. Benefit levels and frequency
Benefits in response to COVID-19 should be quick and lumpy, ensuring sufficient support before sup
ply chains are overwhelmed — and to
avoid health risks from more frequent payment distributions
and contact. While qualitative studies indicate that women may be able to retain control of smaller
transfers, large randomized studies suggest larger cash transfer values result in
higher benefits for
households and women specifically. In addition, no
studies we are aware of show that larger transfers
to women induce adverse effects.
92 Gender
Therefore, we believe programs should provide sufficiently high benefit levels to cover the dura
tion of
the COVID-19 economic crisis, understanding that programming during this time may be a
full income replacement, rather than supplement. In addition, “top ups” should be considered for
households caring for sick members or children to address disproportionate care burdens. Finally,
it is important
to consider that female-headed households are often smaller — and thus may appear
better-off in a direct per capita poverty measure — yet may still be more disadvantaged for numerous
reasons (for example, discrimination or
access to services).
4. Delivery mechanisms and operation features
Programs generally employ the most logistically feasible delivery mechanisms and operational fea
tures in
crisis conditions, but seemingly simple choices may have gender implications. Accessible
grievance mechanisms should be set up, and implementation and management staffing should
include women. Delivery mechanisms for benefits and information should be practical and accessible
to both men and women.
While e-payments may not
be an
option for many settings, in the longer term, national programs
should invest in
these. Extending the network of
e-payments may increase financial inclusion, includ
ing among women, who have lower inclusion rates. Responses should consider that in many settings
women are less likely to have access to mobile phones; existing programs have sometimes provided
them for
this reason. While mobile phones are a promising platform for providing information, it is
important to keep in mind that improving access alone may not
be sufficient; women also have lower
literacy, lower ability to pay for services, and multiple constraints on their time. Thus, mobile phone
based platforms should be complemented by other platforms such as
internet, television, and radio;
and when possible in
mobile platforms, voice messages or
speaking directly to an expert are pre
ferred to
text messaging. Women’s groups or
other peer support groups may be leveraged as
net
works for more efficient communication and delivery of
essential services.
5. Complementary programming
Complementary programming remains relevant for women during COVID-19, especially on
topics
related to food and nutrition, including ways to
access or
grow nutritious foods when markets and
supply chains are down; water and sanitation, as information about hygiene and social distancing
is critical for reducing COVID-19 spread; maternal health including antenatal care,
as travel may be
restricted and health centers overburdened and a potential infection risk; sexual and reproductive
health, including family planning and menstrual hygiene management; parenting and learning for
children as
many schools are closed; mental health for both men and women, given that many may
experience depression related to isolation or
loss of
livelihoods; and access to referrals for violence
related services.
All of
these comprehensive services will rarely be available, particularly during the pandemic, but
social protection platforms can at
a minimum explore integrating light-touch information campaigns
with delivery taking into account the
gender considerations outlined above and linkages to services.
Gender 93
Concluding thoughts
The COVID-19 pandemic presents an opportunity to
address existing gender inequalities through
social protection. Program designs should be adjusted to account for gender, in a manner informed
by existing analysis, while taking a long-term approach. Related issues of
political economy, coor
dination, and financing that have gender considerations should be explored in
future guidance.
Because these are complex issues and unintended consequences of programming are possible, more
research is needed on
intersections of social protection, gender, and pandemics, where ethically fea
sible. At a minimum, monitoring statistics should be sex- and age-disaggregated and, where possi
ble, data should be collected to ensure risks to beneficiaries do not increase. Taken together, these
policy adjustments and new evidence can
lay the groundwork for more gender-sensitive social pro
tection systems in LMICs both during the crisis and beyond.
This work was undertaken in collaboration with the Transfer Project and as
part of the CGIAR Research Program on Policies, Institutions,
and Markets (PIM) led by IFPRI.
Originally published April 28, 2020.
94 Gender
AC
bis
95
ASE
FALL
96
POLICY
RESPONSES
97
22. Fiscal and monetary responses to the
COVID-19 pandemic: Some thoughts for
developing countries and the international
community
Eugenio Díaz-Bonilla
Most developed countries have implemented massive economic responses to the COVID-19 pan
demic, ramping up spending and using monetary policy to cushion the blow of
lockdowns and other
measures that have shut down businesses and left huge numbers unemployed. But for developing
countries, which are now starting to respond to the crisis more aggressively, such options may be
more limited. Here I discuss some ideas for how these countries may address the economic fallout,
and how international organizations can help.
Addressing the crisis in developing countries
Developing countries should start by implementing a national response plan focusing on these four
interrelated spheres: health; the supply anddemand of essential goods and services; the domestic finan
cial circuit in local currency; and the foreign currency market, linked to international trade and external
debt. Such a plan requires a centralized crisis-management office led by the president, prime minister, or
equivalent, with participation of the relevant public and private sector representatives. This is easier said
than done, but it
is the only way to avoid uncoordinated actions and working at cross purposes.
Here I will focus on the
latter three spheres, acknowledging that there are interactions with
health
measures, as
well as
short-term trade-offs between health controls and economic activity.
Supply and demand of essential goods and services
Governments must address basic supply and demand issues to prevent shortages, price spikes, and
economic disruptions in the short term. It is essential to ensure the production and distribution of
food and medicines, which in
turn requires keeping transportation and basic public services (water,
energy, and communications) up and running. The crisis-management office must establish commit
tees with the private sector and operators in
key areas to monitor daily the flow of
crucial goods and
services, and the health of workers and critical personnel. Bottlenecks, as
well as
hoarding and unfair
trade practices, must be monitored and energetically addressed.
Regarding demand, governments must enact initiatives to support employment and income, includ
ing expanding safety nets with a food component. Central banks can play a key role, pursuing
98 PolIcy reSPonSeS
unconventional monetary policies that establish various channels to inject liquidity into the economy
(I discussed several options in Díaz-Bonilla 2016 and 2018, for a different context). Of
course, develop
ing countries with a very strong fiscal position pre-COVID-19 may be able to borrow in domestic and
foreign currency, without immediately resorting to the approaches discussed. What follows assumes
that such is not the case in most developing countries.
The domestic financial circuit in local currency
Supporting supply and demand for basic goods and services will require an expansion of the
money
supply (see Díaz-Bonilla 2015). Central banks must dust off
the instruments they used when they were
called “developmental central banks.” This means taking steps that exceed recent monetary interven
tions, and which may raise objections.
The recent expansion of
the “quantitative easing” approach to
increase money supply has nonethe
less remained more limited in scope and impact than past options, in developed
as well
as in devel
oping countries (see a general discussion in Epstein 2005; the specific case of the
US Federal Reserve
is in Fettig 2008). In fact, the process of creating “modern” central banks has mostly involved restrict
ing monetary instruments, mainly because of concerns about their past use (and abuse) leading to
high inflation in many developing countries; because they may amount to picking winners and losers;
and, perhaps, because of distributive effects. The latter two effects are unavoidable with any mone
tary mechanism, however indirect (see Coibion
et al. 2012).
Nevertheless, central banks must expand their options for lending to the private sector and to
the government.
Part of the
private sector support can be offered through rediscount credit lines to banks so that they,
in turn, may maintain soft lines of
credit for
the working capital of companies, especially small and
medium-sized enterprises (SMEs), including small and
family farms. Those soft rediscount lines (or
even outright grants, using a non-bank channel) should require businesses to keep employees on the
payroll. In particular, these lines of credit could be crucial to support operators in food systems (espe
cially family farmers), the health sector, and other crucial activities.
Central banks can also finance the public sector directly, with the objective of expanding food pro
grams and safety nets (including considering some form of universal income), supporting the opera
tion of
the health system, financing other basic services, and investing in public works. These initiatives
will definitely expand the money supply. That in turn requires eliminating or reducing other sources of
money creation, on the one hand, and trying to align the supply and demand for local currency, on
the
other. The latter is necessary to avoid a spike in inflation and/or a currency run (discussed below).
If the supply of basic goods and services is ensured, as
discussed above, inflation risks will be
reduced. Also, the economic deceleration or recession from the
pandemic shock, and the increase in
what economists call the need for “precautionary balances” or more savings by households and indi
viduals, would work against an inflationary shock.
PolIcy reSPonSeS 99
During this process, the banking system must be monitored continuously to ensure its
proper func
tioning. There will be need of some flexibility for debtors, but also for the banks when they are evalu
ated and audited by the central bank or
equivalent authority.
Supply and demand for foreign currency
To avoid a run on the domestic currency from the expanded money supply, governments will most likely
have to establish controls on
transactions in foreign currency. The government must be able to manage
foreign reserves, calculating the cash flow needed to finance the imports of food, medicines, energy,
and other basic materials for at least six months, while considering the net flows of external debt.
One crucial consideration: avoiding an
overvalued official exchange rate. Many developing coun
tries’ exports will decline in
price and quantity due to
lower world demand, and remittances will also
be affected. Addressing that shock requires maintaining an
official exchange rate valuation that does
not discourage exports needed to finance crucial imports and other external flows. Also, developing
countries may reduce import taxes for critical goods (to alleviate inflationary pressures), while refrain
ing from export bans on
food and other basic products.
The role of international organizations
During the 2008–2009 crisis, the G20 suggested a variety of domestic and international measures
to confront the global recession. Domestically, it called for strong monetary and fiscal stimulus.
Internationally, it expanded the capital base and operations of the international financial organizations.
Now that developed countries are taking stronger and more unconventional monetary approaches, the
G20 and the United Nations (UN) should respond vigorously on behalf of developing countries.
International organizations must call for further rounds of
“unconventional monetary policies” coordi
nated with
fiscal stimulus in developing countries, as
discussed above, allowing them the policy space
to decide how to do this (in many countries, this would most likely mean separating the local and for
eign currency markets). They should also encourage leaders in developing countries to
establish a
central crisis management office as outlined above.
Those domestic responses must be supported by international action from the UN and the
G20:
• Increases in
capital at the International Monetary Fund (IMF) and multilateral development
banks (MDBs) (at least the same amount as in
2008–2009). This will take time to negotiate, so the
MDBs can be asked to
adjust their financial policies to be able to increase their loans/equity ratios
(say, up to 5 or
somewhat more). This will require establishing the regulatory mechanisms and dia
logue with credit rating agencies to adjust their criteria for risk rating, so these changes do not
lead to
downgrades of
ratings of the MDBs, which would constrain their lending capabilities just
in the middle
of the recession. The additional lending capacity
in MDBs should focus mainly
on
financing the health budget of developing countries; strengthening safety nets; financing food
supply and distribution; and financing working capital for SMEs.
100 PolIcy reSPonSeS
• An
additional allocation of
special drawing rights (SDRs) to
about double the amount of
2008–2009.
• Establishing a mechanism of
debt resolution for developing countries focusing, at
least, on
the debt coming due in the next two years. At a minimum, it is
necessary to
ensure neutral capi
tal flows with MDBs and bilateral financial agencies, along with
the rollover of private debt coming
due in that period. Many developing countries will need further support due to
larger trade defi
cits and declining remittances.
• Directing MDBs to
enter into conversations with
private sector banks and investors to
establish different mechanisms of
co-lending (such as
what are called A/B loans, selling part of
the developmental portfolio, and similar options).
• Directing the UN
agencies and the MDBs to set
up mechanisms to advise and support devel
oping countries in their policy responses within the health sphere and in the real-economy
sphere, particularly food, medicines and health equipment, energy, and basic public services.
It would also help if expanded liquidity swaps (as done in 2008–2009) could be established by central
banks across a larger number of developed and developing countries. Initial movements in that direc
tion are underway.
Conclusion
These historically unprecedented times require unconventional responses. Yes, there are several
examples of
countries that in the
past have abused “unconventional monetary approaches,” lead
ing to high bouts of
inflation, strong devaluations, balance of payment crises, and corruption. Yet,
with prudence, these approaches should now be used to finance specific public expenditures, such
as cash transfers and safety nets for the poor and vulnerable, and certain public investments, and
to keep firms operating. In any case, money always enters into the economy through specific actors
(at present, mainly the owners of the assets being bought by the central banks), and not by equally
endowing each citizen with the
same amount of
currency (as in Milton Friedman’s parable of
“heli
copter money”). A universal income would do the latter, and some of the
recent rescue packages in
developed countries moved in that direction. The methods suggested here would ultimately make
the channels through which an
expanded money supply gets into the economy more democratic.
The international community must also step up its
response as
outlined above.
The situation is very complicated, and the world will not be the same after this crisis. It is
in our hands
to limit the global damage and to establish the foundations for
a strong rebound afterward.
Some of these ideas appeared in an article in Clarín (Buenos Aires).
Originally published April 5,
2020.
PolIcy reSPonSeS 101
23. Social safety nets are crucial
to the COVID-19 response: Some
lessons to boost their effectiveness
Daniel Gilligan
The twin health and economic shocks of the COVID-19 pandemic are staggering in their breadth and
scale. While the
disease arrived later and has spread more slowly in many low- and middle-income
countries, COVID-19 is threatening the lives and long-term livelihoods of
millions of
poor people, and
could push an
additional 140 million into extreme poverty.
We know from past crises that while an economic shock’s impacts may vary across the income distri
bution, the poor face a multitude of vulnerabilities to the pandemic’s effects. In many places, the poor
are more likely to have underlying or untreated health conditions (such as hypertension, diabetes,
and vitamin D deficiency) which raises the risk of serious illness if they are exposed. Poor households are
also more likely to cope with income loss by selling productive assets or
undertaking work that is
either
inherently riskier (for example, construction or sex work) or increases their risk of coronavirus exposure.
Their children may also be less likely to return to schools upon reopening, permanently reducing their
earning potential. These factors leave the poor even more vulnerable to additional impending shocks,
like desert locusts in the Horn of Africa or cyclones in South Asia.
Targeted social safety nets for the poor
are central to
the effort to
stifle these negative impacts and
protect the substantial gains made globally in the
fight against poverty, food insecurity, and malnutri
tion in
this century. Why are social safety nets important to the
pandemic response, what challenges
do they face, and what lessons can we glean from past research into social protection programs to
craft effective responses over the
long term?
Social safety nets have played a major role in the
response to the
COVID-19 pandemic in the
last
three months. According to an effort by Ugo Gentilini of the World Bank to track social protection
responses during the
crisis, 190 countries have implemented, adapted, or planned over 900 social
protection measures during the
crisis, often in the form
of cash transfers. This response has included
an expansion in the number of
social protection beneficiaries by roughly 15% in South Asia and East
Asia and the Pacific, but by only 2% in the Africa region. Several countries have offered a temporary
sharp increase in
the benefit amount for current beneficiaries.
Why social safety nets during a health crisis?
Three factors explain why social safety nets have been central to the
COVID-19 response. First, two
decades of
extensive, rigorous research on social protection programs has documented their effec
tiveness at protecting food security, assets, and human capital, including in a crisis. Safety nets can
102 PolIcy reSPonSeS
also improve health, including for newborns, through improved nutrition when combined with com
plementary nutrition programs, a high policy priority during the pandemic.
Second, large-scale transfers help to replace lost income for credit-constrained poor households and
counter the
economic drag of the
pandemic by providing a fiscal stimulus that, under certain con
ditions, may generate positive multiplier effects during the recovery. A temporary increase in
cash
transfers during the pandemic can also make moral and political sense, protecting those most in
need and building trust in government.
Third, the infrastructure of a social safety net was already in place, to
varying degrees, in most coun
tries. Over the last two decades, social protection, and
particularly social assistance, has grown in
popularity as
a leading response to poverty. Many poor
countries developed targeted in-kind and
cash transfer programs, expanding their roles and improving their efficiency. Many safety net pro
grams are designed to be “shock responsive”: During a 2011 drought, Ethiopia increased benefits for
85% of the 7.6 million beneficiaries in the Productive Safety Net Program (PSNP) and provided tempo
rary benefits to an additional 3.1 million people. As the
COVID-19 pandemic hit
earlier this year, many
countries had the payment mechanisms, poverty registries, and local selection committees in
place
to quickly expand benefits and renew program targeting.
Challenges ahead
For countries that have had initial successes using social safety nets to respond to the
pandemic,
significant challenges remain. For most, the
fiscal cost is the greatest of these; continuing transfers
beyond a few months will be difficult. Yet the pandemic and its
economic consequences may drag on,
or return later this year after a failed reopening. Social distancing measures pose obstacles to target
ing new beneficiaries, as this typically involves in-person interviews or
local committees meeting to
screen applicants. Delivering cash or in-kind transfers can
also increase the risk of
coronavirus trans
mission, and most programs still deliver benefits in ways requiring person-to-person contact.
How should social safety nets be designed for the pandemic?
Evidence from past research on the
design, implementation, and effectiveness of social assistance
programs during an
economic crisis provides guidance on
handling some of
these challenges:
1. When safety net programs are disrupted, maintain transfers by
adopting alternative deliv
ery methods. At the
start of
the pandemic, many school feeding programs ceased operating as
countries closed schools. These are one of
the most
popular forms of
social assistance, reaching
more than 270 million children in 89 countries in one World Bank estimate. In India, many school
systems replaced on-site meals with
rations delivered to homes or available for pick-up
at schools.
As they reopen, schools should consider maintaining take-home rations initially,
to reduce
the risk
of coronavirus transmission when students eat together; in Uganda, fortified take-home rations
were as
effective as
equivalent on-site school meals for improving school participation and
attainment, and for reducing anemia prevalence for adolescent girls.
PolIcy reSPonSeS 103
2. Eliminate conditions on
assistance temporarily. Reassess their importance and effectiveness
during the recovery. Cash transfers are often conditioned on child school participation or
adult
work requirements. These should be suspended during the
pandemic. Unconditional cash trans
fers can
also improve school attendance. In Ethiopia, PSNP work requirements were temporar
ily suspended for beneficiaries because it was
no longer possible to bring work teams together
safely. Payments to public works beneficiaries continued, and were even accelerated in case it
became impossible to make payments for some time. When work can resume, programs should
identify work activities that bolster the
COVID-19 response, such as
building or
renovating health
clinics or
supplying hand-washing stations.
3. Strengthen and expand targeting. Safety nets often exclude a high proportion of
the poorest
households and fail to reach the most vulnerable groups. They should expand coverage in poor
areas and make efforts to
target migrants, orphans, and the
urban unemployed, who face sub
stantial livelihood risks and have limited social support. Social assistance programs should also be
used as platforms to
identify the newly poor. For
example, community health systems and local
government can be used to
target new beneficiaries. In areas that are particularly hard-hit with a
collapse in employment, programs should consider providing universal transfers temporarily.
4. The form of
assistance matters, but distributing it quickly
is the priority. Food, vouchers,
or cash assistance can all increase household consumption and improve calorie intakes, though
vouchers may perform better than food
transfers or
cash at
improving measures of dietary diver
sity and thus quality. However, setting up a voucher system involves coordination with food retail
ers and thus may be challenging to establish during the
pandemic. Cash transfers have many of
the advantages of voucher programs — they work well where people have access to
markets and
as long
as prices do not escalate — and they are usually cheaper to deliver. Still, all
of these trans
fer modalities can be beneficial, so following a “no regrets policy” is best: Prioritize speed in
scal
ing up transfers with whatever method works the fastest.
5. Respond to the crisis with the future in
mind. Many acknowledge the need to “build back bet
ter” following the
pandemic to improve safety net systems. Here are some priorities:
• Strengthen mental health services for beneficiaries. Anxiety and depression increase with
poverty and, in women, are associated with worse development outcomes for their children.
The pandemic is an
opportunity to bring mental health out
of the shadows. Programs should
build a cadre of community health workers to provide mental health services and screening.
• Design new programs or features to be gender-sensitive. Most social assistance programs are
not designed with the specific needs of women beneficiaries in mind, a wasted opportunity
that can widen gender inequality. As
my colleagues Melissa Hidrobo, Neha Kumar, Tia Palermo,
Amber Peterman, and Shalini Roy emphasize, social protection programs designed to be gen
der-sensitive during the pandemic have the potential to protect women’s livelihoods and assets,
reduce unequal burdens of care, improve women’s empowerment, and reduce intimate part
ner violence.
• Strengthen nutrition-sensitive social assistance. An
ever-growing body of
evidence shows that
critical investments in health and nutrition for the poor can be better achieved by combining
104 PolIcy reSPonSeS
cash transfers with information campaigns and
access to
services. These investments in child
human capital will have large economic returns as these individuals enter the labor market and
begin their own families.
• Invest more in mobile payments. Contactless mobile payments have a clear advantage during
the pandemic. Though the poor continue to
have less access to mobile phones, it is
important
to provide transfers through mobile phones when possible — or
better yet, to
steeply subsidize
mobile phone ownership for the
poor. Many will benefit from the
new access to social networks
and information. Even where literacy is
low, household heads often have a family member who
can support the phone use.
6. Strengthen fiscal support for
the social assistance response. The global slowdown in eco
nomic activity and lockdowns have ravaged economies of low- and middle-income countries at
a time when many face a debt crisis. With public health costs growing enormously, governments
will need aid to finance a robust social safety net response.
As they
try to contain the pandemic, countries must also confront a rise
in extreme poverty and the
suffering that goes along with it.
But they have many tools to combat this problem. Extensive research
on social assistance programs provides a firm foundation for approaches to strengthen safety net
designs and adapt responses to fit
changing circumstances. These actions can improve social safety
nets and help to
counter some of the worst effects of the COVID-19 pandemic.
Originally published June 18, 2020.
PolIcy reSPonSeS 105
24. How India’s food-based safety net is
responding to the COVID-19 lockdown
Devesh Roy, Ruchira Boss, and Mamata Pradhan
India’s huge population, its
density, and very large numbers of poor present an extraordinary
challenge for
the country’s COVID-19 response, and the Indian government imposed the largest
lockdown in history: 1.3 billion people ordered to
shelter in place for 21 days as a part of “lock
down 1.0” which began March 25. Even China, where the disease originated, ordered a total lock
down in
just one area, Hubei Province (while imposing other restrictions throughout the country).
Implementing a lockdown in a country of
India’s size has been socially, economically, institutionally,
and politically very demanding and disproportionately affects the poor, daily wage earners, and other
marginalized groups.
Thus COVID-19 exposes a harsh reality: an inadequate and uneven safety net may leave many from
these economically vulnerable groups without access to food and other services. This struggle is
particularly acute for large numbers of informal sector workers — including self-employed, subcon
tracted laborers, small farmers, and landless workers. India’s informal sector employs 303 million; the
workforces of Uttar Pradesh and Bihar states are more than 80% informal, while even in advanced
states like Maharashtra, that share is 70%. COVID-19 may push this group and their families into tran
sient poverty.
The nature of
the COVID-19 pandemic is unique. Shutting down many business operations, which
leaves people without work, is an integral part of efforts to “flatten the curve”
of disease progression.
Laid-off workers, particularly daily wage workers who are largely seasonal migrants, will struggle to
find employment even as the
lockdown eases. Some 9 million workers are estimated to move annu
ally, though their total number was as
high as 139 million in 2011. Coronavirus-related layoffs will dis
proportionately hit service workers in low-paying jobs as restaurants, malls, cafes, and shops shut
their doors indefinitely.
For informal sector workers and rural poor, missing even a day’s earnings can
make it
difficult to
buy
basic food items, and joblessness extended over several days can mean economic ruin. As
India wit
nesses large-scale reverse migration, with desperate migrants leaving cities amid lockdown and
walking hundreds of
miles toward their home villages, the prospect of
economic devastation and a
growing population of
rural poor
— internal COVID-19 refugees — looms large.
Yet compared to
those of other countries at a similar income level, India’s social safety net is exten
sive. An elaborate array of
programs exists to assist the poor, including the world’s largest food
based social program, the Public Distribution System (PDS), covering 800
million people. To respond
quickly, India is
utilizing these existing schemes and reshaping them to address the unique challenges
of COVID-19.
106 PolIcy reSPonSeS
The food-based safety net and COVID-19
On March 26, the government announced a $22.6 billion relief package
with a major food compo
nent. PDS has played a key role, providing 5 kg of
either rice or
wheat and 1 kg of
preferred pulses
per month free, offered in two installments. (This is
in addition to the
preexisting entitlement of 5 kg
of low-cost wheat/rice per person per month.) The relief package cereal allotment should meet most
families’ cereal requirements, but the pulses allocation is likely inadequate, given that per month con
sumption is 4 to 5 kg. Several states, meanwhile, have announced their own relief packages (Table 1).
Supplying these relief efforts should not be a problem. Rice, wheat, and pulses stocks are adequate
to feed the country for now, and the harvest of rabi crops is around
the corner. This emergency
food
support is happening
at a propitious time.
Implementation challenges
Implementing the
relief package is
fraught with challenges that must be addressed, or
the entire
effort could be undermined:
• PDS coverage in urban areas is low (about 50%), thus leaving out many urban poor. In response to
the pandemic, responsible agencies should quickly expand the list of
eligible households. If neces
sary, the broader coverage could be rolled back after COVID-19 subsides. In the initial phase of the
lockdown, only the
Delhi government had announced that people without ration cards could also
get rations. The central government made a similar announcement of free distribution of 5 kg each
of wheat and rice and 1 kg of pulses per family
to 80 million migrant workers without ration cards
almost a month and a half following the first
lockdown. Bihar announced use of direct cash trans
fers, depositing funds to the bank accounts of ration-card holders.
• With commodity prices expected to rise, and the small amount of
pulses in the relief package,
ensuring access to
adequate diets is problematic. Indeed, some states are offering a food
kit via
PDS (see Table 1 for food kit intervention).
• Given the stresses of the emergency, there is a high likelihood the program will have both exclu
sion and inclusion errors.
• PDS ration cards are neither portable across locations nor can rations be divided to allow fam
ily members to pick up
portions at different locations; this makes them potentially useless for sea
sonal migrant laborers. The government’s new One
Nation, One Ration Card (ONORC) program
will be rolled out in all states and Union Territories only by March 2021. Even if implemented then,
the program has no provision for divisibility.
• Food quality, not just quantity, must be maintained. India’s supply chain must gear up
to deal with
the transportation, storage, and distribution of
large volumes of
food in short timeframes during
the lockdown to
avoid spoilage and contamination.
• The extra grains pumped into the system are likely to depress prices; in
the long run this
may affect small farmers and small businesses — another impact on
those most vulnerable to
COVID-19 restrictions.
PolIcy reSPonSeS 107
table 1 State
governments’ food-based
relief measures during COVID-19 lockdown
DURATION(MONTHS) INSTALL
MENTS ADDITIONAL INFORMATION
1 1,000 food canteens for subsidized meals at Rs. 20. Open com
munity kitchen to be formed at the panchayat level will operate
across the state: a telephone number will be given for people to
reach out and ask for food. Passengers stranded in the state will
be given special accommodation and food.
Dealer may introduce a token
system to avoid
crowding of card
holders. Volunteers and ward members may be needed help in
door delivery of grains for the elderly and bed-ridden who are
unable to reach the retail outlets.
Lunch and dinner free for night shelters. 1
1 Doorstep delivery. The state Food Supplies Department has
issued a
list of 22 items under the PDS, adding masks, sanitizers,
and gloves (no
information on the list of items).
2 Door-to-door delivery of essential commodities apart from the
e-commerce companies and supermarkets
that will use their
own workforce for the home delivery of essentials; community
kitchens to distribute food packets to the poor; mobile vans,
e-rickshaws, thelas (carts),
and other vehicles being arranged in
various districts for door-to-door
delivery of essential items.
2 1 (April)
1 Doorstep delivery by village and ward volunteers.
1
1 In addition to food grains, Rs.
1000 DBT for food to
1.8 million
ration-card-holding households.
Rs. 1,000
DBT to state residents stranded outside Bihar (about
0.2 million people)
because of the lockdown.
SUBSIDY/
FREESTATES TOTAL BENEFICIARIES QUANTITY (PER MONTH)
Kerala NFSA ration-card
holders/people
under quarantine/passengers
stranded in the state
Free(canteen BPL families to get 30 kg
of rice along with
the kit/ those entitled to 2 kg of rice will
mealssubsidized) get free 15 kg
rice/hh & food kit (sunflower
oil - 1 kg; coconut oil - 1/2 kg; salt - 1 kg;
wheat flour - 2kg; rava - 1 kg; green gram -
1 kg; black chana - 1 kg; tur dal - 1/4 kg;
mustard - 100 gm; fenugreek - 100 gm;
coriander - 100 gm; urad dal - 1 kg; chilli
powder - 100 gm; sugar - 1 kg; tea - 250
gm)
Delhi Free7.2 million (including people with
out ration cards who need to apply
online and rations to be disbursed
on that basis)
NSFA ration with 50% more quantity
(7.5 kg rice/wheat instead of
5 kg)
Haryana NFSA ration-card holders Free NFSA wheat
& rice,* mustard oil
& 1 kg
sugar/hh
FreeUttar
Pradesh
20 kg wheat/hh & 10
kg rice/hh
16.5 million construction
workers,
AAY card holders (poorest), desti
tute old-age pension holders, PWD
pensioners, daily wage laborers
Karnataka 38.3 million Free 5 kg rice
& 2 kg wheat per person
FreeAndhra
Pradesh
14.2 million
(beneficiaries already
identified under the YSRCP last year)
1 kg tur dal,
4 kg rice per person, oil
& salt
Telangana Free 12 kg
rice/person
(double the monthly supply)
8.75 million white ration-card hold
ers, BPL, unorganized sector (ben
eficiaries were chosen based on a
“comprehensive household survey”
held last year)
Bihar 16.8 million Free NFSA wheat & rice*
Maharashtra NFSA ration-card holders Free 5 kg wheat
& rice
1
Table 1 continued
SUBSIDY/
FREE
DURATION(MONTHS) INSTALL
MENTS ADDITIONAL INFORMATIONSTATES TOTAL BENEFICIARIES QUANTITY (PER MONTH)
Tamil Nadu NFSA ration-card holders Free 15 kg rice,
1 kg dal
& 1 kg cooking oil/hh
1 Through
token system at an appointed day and time.
Tamil Nadu
follows Universal Public Distribution System.
Punjab 1 million (daily wagers and
laborers) Free 10 kg wheat,
2 kg dal
& 2 kg sugar
1 Doorstep
delivery.
NFSA beneficiaries can collect
6 months
advance ration at one
go.
79 million Free 5 kg rice
& 5 kg wheat per person
6West
Bengal
Jharkhand NFSA ration-card holders Free 2 months ration in advance 2 1 (April) 600 dal bhat Kendra (Rice-dal
centres), 2,000 food kits (2 kg
crushed rice, 1/2 kg jaggery, 1/2
kg gram).
Rajasthan 48 million NFSA ration-card holders Free Wheat 2 PDS food grains distribution will be carried out in phased man
ner to prevent crowding at these shops. Distribution of ration
packs (wheat,
pulses, rice, oil, and other essential commodities
for urban poor not included in NFSA list).
Free NFSA rice 2Chhattisgarh NFSA ration-card holders, disabled,
single destitute, and Annapurna
ration-card holders
Gujarat 6 million Free 3.5 kg
wheat/person, 1.5 kg
rice/person,
1 kg pulses/hh,
1 kg sugar/hh,
1 kg salt/hh
1 Distribution will be carried out in phased manner to prevent
crowding at these shops.
0.16 million NFSA ration-card holders Free NFSA rice and wheat 2Jammu and
Kashmir
1 (April) Doorstep delivery of PDS ration and other essential
commodities.
Odisha Free 3 kg rice,
2 kg
wheat/person, oil
332.6 million NFSA ration-card hold
ers and 0.45 million State Food
Security Scheme beneficiaries
Three months of PDS food grains without any biometric verifica
tion. Doorstep delivery for elderly.
Uttarakhand 2.3 million Free NFSA wheat & rice* 3
Mizoram NFSA ration-card holders Free NFSA wheat & rice* 1
Manipur NFSA card holders Free 3 kg rice,
2 kg
wheat/person 1
Source: Authors’ compilation from newspaper sources through March 28, 2020.
Note: *National Food Security Act (NFSA) wheat & rice:
the total quantity to be distributed per month is unclear,
though the center has directed the states to allow beneficiaries
to pick up 6 months’ rations
at one go. The center has also announced that the monthly quota of subsidized foodgrains is to be increased by 2 kg
to 7 kg per person
(earlier it was
5 kg per
person) through ration shops for 80 crore
NFSA beneficiaries. Across most of the states, there is no clarity on eligibility list of the
beneficiaries. AAY/BPL/APL = Antyodaya Anna
Yojana (poorest of the poor)/Below Poverty
Line/Above Poverty Line.
YSRCP = Youth, Labour and Farmers Congress
Party.
The way forward: Getting markets to function
Past experience shows that states with more universalized coverage have lower leakages and better
success at
reaching the poor. The current COVID-19 context suggests that a universal transfer may be
at least as effective or better than targeted transfers, as the crisis is likely to create a vast new pool of
near-poor or
poor households.
While social safety nets are needed, and critical to ensure food security, they cannot supersede the
market, even now. Food demand comprises a variety of food products, and only cereals and some
pulses are to be provided via the PDS. Many other essential commodities including edible oil, sugar,
milk, salt, and pulses are needed. In addition, even if a household gets wheat,
if the local millers who
convert it into flour are not working, the benefit might prove useless.
The government should ensure markets keep functioning, especially by safeguarding against price
gouging. The lockdown has left millions of
small farmers vulnerable; they are depending on supply
ing fresh produce and on
returns from the impending rabi harvest. Many wholesale markets (agri
cultural produce market committees or APMCs) initially shut down and are just beginning to open
partially; many traders have been unwilling to operate, fearing infection.
It is imperative now that food move seamlessly across state borders, which can happen only if the
states work together. However, the
interstate transport of goods faces many problems. Truck drivers
are being frisked at lockdown checkpoints, and casual laborers for loading and unloading are in short
supply. In many cases, farm products are not reaching the mills. Even before the lockdown, millers
had started depleting stocks of
raw materials. As the
wheat harvest is imminent, uncertainty looms
for
both farmers and traders on the status of
the government’s wheat procurement operations.
Disbursing aggregately, that is, providing several months’ rations at once, could be the preferred
mode from a social-distancing perspective. Similarly, doorstep delivery will help minimize exposure,
particularly for high-risk groups such as
the elderly. To the degree that the movement of
food may
spread the disease, moving to
direct cash transfers may have public health benefits. Cash transfers
may also have multiplier effects on the
economy and
thus provide a source of much-needed stimulus
(Handa et
al. 2018 or
Egger et
al. 2019).
The food relief program can
also be used as
a medium to communicate key messages about the epi
demic, including on
social distancing and other public health and safety measures. COVID-19 may
be with us
for a year or more; India’s relief package is only the beginning. Going forward, the govern
ment needs a contingency plan focusing on how much, and for what length of time, the food system
can continue to
supply the social safety net in its
current configuration. The lives and livelihoods of
hundreds of millions depend on it.
Originally published April 6,
2020.
110 PolIcy reSPonSeS
25. IFPRI’s COVID-19 Policy Response
Portal: Identifying trends and implications
for food systems
Danielle Resnick
Developing countries have employed a wide range of
policies to control COVID-19 and relieve eco
nomic stress. These responses continue to
evolve, and
different actions targeting the same problem
vary widely in approach and impact. For instance, to maintain food supplies, some countries have
provided direct support to farmers, some have imposed food export bans, and some do both. In
addition, many responses overlap and interact, so their cumulative impacts can be difficult to
inter
pret in isolation. For example, borders may be kept open for transporting food, but stringent screen
ing and quarantine measures may create significant delays that deter truckers from making the
trip. Providing inputs to farmers may do little for
food accessibility if markets are shut down
or have
severely limited operating hours.
The COVID-19 Policy Response Portal (CPR) tracks these actions systematically across many differ
ent domains, enabling governments, donors, and researchers to compare policy commonalities
and differences.
The CPR focuses on nine distinct types of
policy responses, providing information about cross
government institutional coordination, levels of pandemic foreign aid, and citizen compliance with
control measures. As
some governments gradually begin to
ease their lockdowns, the CPR is also
tracking where policy measures have been extended or phased out. It
also highlights innovations
aimed at
keeping food
systems and livelihoods resilient.
The CPR currently includes data from 18 countries in
Africa, Asia, and Europe, and its
scope will be
regularly expanded as new data is added.
Thus far, it reveals several important trends, including five that may significantly impact food security:
1. Major restrictions on urban food traders
2. Widespread support for contactless payments
3. Targeted support to consumer livelihoods
4. Less support for agriculture than for other forms of economic assistance
5. Exclusion of
agriculture ministries in many COVID-19 national response units
PolIcy reSPonSeS 111
Urban food traders hit hard
Urban food traders have encountered some of the most
severe pandemic restrictions. Closures
of open air and wet markets for extended periods,
or reductions
in operating hours, have been
extremely common; meanwhile, many cities have banned street vendors or moved them to station
ary locations. In some settings, however, authorities have disinfected markets and allowed them to
continue operating, or permitted them to open every other day. In Burkina Faso, where many markets
were shuttered for three weeks, food aid distributions have even been specifically targeted to infor
mal traders. Keeping these markets open in some form
is critical for maintaining traders’ incomes and
preventing them from sliding into poverty, and for the
food security of
the many urban residents who
rely on them.
Support for contactless payments
Innovations in contactless forms of
payment and food sourcing are proving a major advantage in
coping with the pandemic, especially for traders who would otherwise need to deal with lots of
cash every day. The CPR shows that many countries are reducing or
eliminating fees associated with
mobile money and increasing allowable transaction amounts. In Senegal, the Ministry of Trade has
even launched #JaaymaMburu (“Sell me bread” in
Wolof), which allows customers to order bread via
an online platform and get free delivery during the
month of Ramadan in
order to
limit queuing in
front of bakeries.
Protecting consumer livelihoods
The data also show that governments are concentrating most heavily on
protecting consumer liveli
hoods. One
set of mechanisms includes fixing food prices, especially for cereals. For instance, Egypt
set flour and bran prices at EGP 3,600 ($229) per ton; Mali set price limits
on rice, bread, cooking oil,
and sugar. Rwanda also has set fixed shop prices on
staple foods. Because they focus on staples,
these price controls (which bear some resemblance to those imposed during the food price cri
sis of
2007–2008) do less to
cushion the
cost of
diets comprised of
healthier and more diverse food
options. Papua New Guinea is an
exception, with mandated price controls for cereals and for eggs
and fresh produce.
Agricultural support is secondary
The CPR shows that policies directly aimed at
supporting agricultural production are rare com
pared to
other forms of economic assistance. Where implemented, approaches include expanding
the provision of inputs and animal feed, removing price floors placed on
agricultural exports, and
postponing debt payments owed by farmers. Lower visibility but higher return investments, such as
agricultural research and development or
extension, will likely continue to be sidelined in a time of
scarce resources. In
the long run, this could erode the
resilience of the sector to cope with challenges
such as
climate change and dietary diversity.
112 PolIcy reSPonSeS
table 1 COVID-19 policy response categories and other governance categories
POLICY RESPONSES EXAMPLES OF ACTIONS IN EACH POLICY CATEGORY (NON-EXCLUSIVE)
Restrictions onpopu
lation movements
Travel bans, curfews, lockdowns at home, bans on gatherings, public transport
limited, schools and religious institutions shut
Business policies
Restrictions on
formal and informal markets, bans on
street vending, closures of
restaurants, restrictions on
mining, restrictions on manufacturing, restrictions on
agricultural activities, restrictions on tourism sector
Health-specific
policies
Increased spending on
health system, importation of test kits, drugs, ventilators,
creation of new facilities for testing, increased hiring of healthcare workers
Social protection
interventions
Food aid, expanded cash transfer/unemployment programs, food subsidies,
expanded credit options, wage support, mandated grace period of
utility bill
payments, mandated grace period of rental payments
Broad fiscal policies
Nonfood price controls, support for private companies, VAT waivers for
businesses, reduction of consumer taxes (e.g., sales/VAT)
Farm fiscal policies
Food price controls through procurement, food price controls through regulation,
farm input subsidies, targeted rural income support
Trade policies Export bans, export quotas, import tariffs, quantitative restrictions, quality controls
Monetary &
financial policies
Exchange rate shifts, lowered interest rates, debt restructuring
Governance
restrictions
Postponement of elections, state of emergency, limiting access to information,
bans on political rallies, restrictions on social media platforms
OTHER CATEGORIES DESCRIPTION
Price responses
Major price shifts that may occur as markets adjust to
domestic and external
policy changes
Citizen reactions
Protests/riots, non-compliance with
population restriction measures,
violent treatment of healthcare workers, destruction of health infrastructure
Institutional
coordination
Government actors and agencies that are tasked with overseeing
COVID-19 responses
Foreign aid Donor commitments and actual disbursements specifically in response to COVID-19
PolIcy reSPonSeS 113
Agriculture ministries excluded from cross-government COVID-19
response units
Finally, a unique feature of
the CPR is that it shows
the range
of government actors involved in coor
dinating national responses to COVID-19. In most countries, these committees and task forces consist
of health ministries working with a range of others, including commerce, industry, foreign affairs, and
urban development. However, agriculture ministries are conspicuously absent. This could be due to
the perception that the spread of COVID-19 is concentrated
in cities and high-density areas, and that
agricultural activities in
rural settings are relatively safe. But this seems to be a missed opportunity to
include a key sector whose reach is hardly confined to rural areas. The risk is
that COVID-19 responses
for other sectors may not consider possible impacts on
agriculture and agrifood systems.
While policy responses to COVID-19 in some countries reflect a “copy and paste” bias, borrowing
what other governments have done or
resorting to common tools used in the past,
other countries
are charting their own course. By systematically tracking these varied responses, at both the national
and subnational levels, the CPR is a resource for better understanding comparative policy processes
and, in
the long-term, for analyzing the combination of decisions that are most effective at
protecting
jobs, incomes, poverty, and food accessibility during times of
crisis.
The CPR is led by IFPRI’s country and regional programs and supported by Michigan State University’s country programs, as well as by
national institutions across the world. Funding is provided by the U.S.
Agency for International Development (USAID) and the IFPRI-led
CGIAR Research Program on Policies, Institutions, and Markets (PIM).
Originally published May 20, 2020.
114 PolIcy reSPonSeS
26. Water in the COVID-19 crisis:
Response, recovery, and resilience
Claudia Sadoff and Mark Smith
COVID-19 has, like nothing that has gone before, revealed the “systems wiring” of the
modern, glo
balized world, and how destructive disturbances to those systems can be. Water is a connector across
these systems, and thus has critical implications both for the
effectiveness of COVID-19 response
efforts and for promoting growth and building resilience in a post-pandemic world.
Water in response
COVID-19 is shining a harsh spotlight on
the inequalities, hardships, and global health risks that result
from the collective failure to uphold the human right to water and sanitation. In many communities
around the world, a lack of water supply and sanitation deprives people of their most basic protec
tions against the spread of
the virus.
Improving water, sanitation, and hygiene has the potential to
prevent at
least 9.1% of the global dis
ease burden and 6.3% of
all deaths, according to the
World Health Organization (WHO) report
Safer Water, Better Health, released before the pandemic. Nevertheless, 4.2 billion go without safe
sanitation services and 3 billion lack basic hand-washing facilities. In addition, diarrheal diseases
caused by waterborne pathogens and poor
hygiene inhibit nutrient absorption, so that even those
with access to
adequate nutrition may face malnutrition. This means that where hand-washing is lim
ited and waterborne illness is already common, not only will COVID-19 spread more easily, its
lethality
could be amplified.
We should also be cognizant of the gender implications. In many parts of the
world, women and girls
spend hours each day fetching water or waiting in crowded queues for water vendors, potentially
increasing their risk of
exposure to the virus. If they struggle with these tasks because they are ill,have to care for the sick, their health and food security could be further compromised. Compounding
the issue still further, restrictions on movement may lessen the
ability to access water at
all.
or
How can
we respond to these problems? In the
short term, governments and international organiza
tions should work to
ensure access to safe and reliable water supplies and sanitation. This includes
emergency provision for underserved communities and taking care to protect women and girls
responsible for fetching water from exposure. To address potential supply disruptions, we also need a
clear understanding of
where and how municipal or
rural water infrastructure is coping with pandem
ic-related spikes in demand. In Ethiopia, the International Water Management Institute has research
underway now to assess the implications of
mitigation measures in
rural communities.
PolIcy reSPonSeS 115
Water in recovery
Recovery from the
pandemic will require effective water management that reinforces the stability
of disrupted food systems. In some areas, lockdowns have impacted agricultural cycles — interrupt
ing supplies of
inputs, depressing demand, and keeping workers away from fields and factories.
When farming activities resume, demand for irrigation water may rise quickly if dry season cropping
expands to counter food supply deficits. Thus, a critical priority will be preparing for potentially sig
nificant unplanned irrigation withdrawals, making sure they do not undermine basic domestic water
needs or overdraw aquifers, lakes, and rivers.
The risk of natural disasters — including drought, extreme weather, and flooding — occurring during
the pandemic is another significant problem that threatens water security and long-term recovery.
People displaced by disasters are typically relocated to densely populated camps or
shelters where
authorities may struggle to meet basic water, sanitation, and hygiene needs — and now, where the
novel coronavirus could spread rapidly.
The prospect of
overlapping shocks is yet another serious concern. The World Economic Forum 2020
Global Risks Report, published in January, ranked risks from water crises higher than either infectious
diseases or food crises. In 2020, there will likely be places where we
see all three at
once.
To address such risks, countries will need to
reinforce water governance to ensure the reliable deliv
ery of water for priority uses, enhance water storage and irrigation capacity to head off potential
crop failures and compensate for disruptions to rainfed agricultural cycles, and reduce unmanaged
competition for water.
This also means better preparation for droughts or floods to mitigate the multiple shocks they can
deliver to food systems. Fortunately, we
can now monitor and forecast water-related risks and author
ities can
use those data to
reduce risks of
water-related setbacks to
recovery, and introduce services
like index-based weather insurance that will support the
livelihoods of
the poorest and most vulnera
ble people if floods or droughts strike.
Water in resilience
In the post-pandemic world, we must use what we are learning about the
dynamics of
these intercon
nected systems to “build back better.” Investments in
water should be used to build greater resilience
to climate, health, and food system shocks, and more effective management of
water-related risks.
Building back better means constructing more resilient water, sanitation, and hygiene systems that
will deliver these fundamental services despite the hydrological uncertainties of climate change and
growing water scarcity and pollution. It means building more “circular” water systems that secure
supplies and better capture, clean, and reuse water resources in ways that protect human and eco
system health. It means reimagining our “waste streams” as
“resource streams”: instead of releasing
80% of the world’s wastewater back into the environment untreated, we should invest in wastewater
treatment that will provide the
double win of protecting communities and ecosystems against bio
logical hazards while safely recycling water, energy, and nutrient resources. While there is
currently
116 PolIcy reSPonSeS
no evidence that COVID-19 can be spread through water or
wastewater, we do know that historically
many epidemics have spread this way, and that untreated wastewater remains a health hazard in
too
many communities today.
It also means ensuring that food production and trading systems are more resilient to water chal
lenges. To bolster domestic food supplies from COVID-19 disruptions, some countries have restricted
exports and/or changed patterns of agricultural production. In addition to potential impacts on
global prices, poverty, and hunger, such moves can
affect water availability and undermine the resil
ience of
food systems. Water availability and how it
is allocated to multiple uses must be accounted
for in food system transformations in different locations
with varying geographies. Appropriate
accounting for water in agricultural trade and production policies and investments is critical to sus
tainability. Water-scarce regions can
import water-intensive crops (and their “virtual” water) from
water-rich regions, where their production is sustainable and does not
compete for drinking water or
ecosystem requirements.
As governments and international organizations work
to address these complex, overlapping chal
lenges, systems thinking is crucial. Water connects health, food systems, climate change, nature,
energy, and finance. The fabric of water security is created by weaving together effective gover
nance, knowledge, and skills, connectivity across systems, and investment in and application of
infra
structure, technologies, and services from ecosystems. The COVID-19 pandemic is stressing all of
these, forcing a reckoning with many underlying problems in
the process. But it
is also an opportu
nity to
expand our understanding of how these systems work and how we can build back better in a
post-pandemic world.
Originally published June 4,
2020.
PolIcy reSPonSeS 117
27. Prepare food systems for a long
haul fight against COVID-19
Maximo Torero
With a devastating one-two punch, a supply shock followed by a demand shock, the COVID-19 pan
demic has knocked out
the world economy. The first
blow was the Great Lockdown; the second, the
worst recession since the Great Depression. No
modern economy has experienced anything like this.
As the spread of the novel coronavirus debilitates people’s ability to harvest and buy and sell food,
food systems are under threat as never before.
It’s thanks to
producers and workers across the food supply chain that food
continues to move from
where it is
produced to
where it
is needed, logistical delays notwithstanding. Countries have shown
restraint, too, as
most of them didn’t jump to restrict food exports. In fact, the number of pandemic
related export restrictions has decreased from 18 to
7, representing less than 1% of
the share of
global food trade.
But the lockdowns have triggered a steep recession. The World Bank projects the
global econ
omy will shrink 5.2% this year. The IMF’s latest projection is –4.9%. The OECD
is forecasting a 7.6%
contraction, given a second wave of
infections before the year’s end, and a very slow recovery of 2.8%
in 2021. In both rich and poor
countries public debt is soaring and is expected
to exceed the
post
World War II peak.
A collapse in demand for food due to
lack of
income and disruptions to local food markets indicates
important vulnerabilities, as shown in
Figure 1, and could prompt a global food crisis. Hunger and
malnutrition were significant global problems even before the pandemic. More than 2 billion peo
ple didn’t have regular access to
safe, nutritious, and sufficient food
last year. Some 704 million of
them went to sleep on empty stomachs; this included 135 million people who were on
the edge
of starvation.
At FAO, we
estimate that a 5% to 10% drop in GDP growth would mean
an additional 38.2 to
80.3 million people in poor
countries that rely on food
imports falling into the
hunger trap. At a global
scale, this means the number of
hungry people would jump by between 74 million and 120 million.
The effects of COVID-19 are even more pronounced in Africa south
of the Sahara and small island
developing states (SIDS). The virus has shuttered tourism, leaving SIDS such as Fiji, the Maldives,
and Mauritius scrambling for economic survival. The World Bank expects to see a sharp 20% drop in
global remittances.
Africa is bracing for the worst. The epic oil price crash has led to a global financial bust. For
the con
tinent’s exporters, such as
Nigeria, Chad, Libya, and Algeria, it has wiped out their principal source
of revenue. A catastrophic locust outbreak
in East Africa was — pre-pandemic — projected
to force
25 million people in Ethiopia, Kenya, Somalia, Sudan, and Uganda to go hungry. A swarm covering
118 PolIcy reSPonSeS
Figure 1 Structural vulnerability and known food insecurity hotspots
Structural vulnerability
Very high
High
Intermediate high
Intermediate
Intermediate low
IPC 3/CH and above (2019)
>10 million
5–9.99 million
3–4.99 million
1–2.99 million
<1 million
IPC 3/CH
In Ecuador and Colombia: Venezuelan migrants
In Turkey
and Lebanon: Syrian refugees
Source: FAO/Hand-in-Hand, Integrated Phase Classification.
Note: IPC/CH (Integrated Phase Classification/Cadre Harmonisé) provides a scale for classifying the severity and magnitude of food insecurity
and malnutrition. Phase 3 (IPC 3) indicates crisis-level food insecurity.
Figure 2 Formal jobs at risk in food systems
15.38% 21.26%Jobs
(in millions)
Livelihoods
(in millions)Where in value chain 26.38%
Primary production 716.77 2,023.80
26.42%
Food processing 200.73 484.54
Food services 168.97 339.44
Primary productionFood processing
Food services
Distribution services
Transportation services
Machinery
Inputs
60.00%
60.00%
39.99%
Distribution services 96.34 241.48
Transportation services 41.61 101.05
R&D
Machinery 6.51 13.18 60.01%
Inputs 4.89 11.06
R&D 0.13 0.29
Total 1,280.93 3,214.84
Source: FAO/IFPRI unpublished estimates, based on
ILO 2020 — ILO extrapolation scenario. Not annualized.
Jobs represent formal employment; livelihoods cover
a broad array of self-employed, informal, migrant, and
seasonal labor. Total at risk due to COVID-19 451.64 1,090.89
PolIcy reSPonSeS 119
one square kilometer contains 80
million insects that consume more food in 24 hours than 35,000
people. Africa south of the
Sahara faces its
first recession in 25 years and is
especially vulnerable to
the impact of COVID-19.
Food systems, which directly employ over a billion people, are about to
lose more than 451 million
jobs or 35% of formal employment, according to an unpublished FAO/IFPRI estimate. The jobs most
at risk are in food processing, services, and distribution, disproportionately affecting female workers.
Countries must respond by deploying the
full power of
fiscal and monetary policies. I cannot over
emphasize the
importance of expanding social protection for vulnerable people who can’t afford
basic nutrition. Governments should use cash transfers and mobilize food banks. Parallel to
this, they
should increase food production, reduce food
losses, and create employment. Public works projects
throughout agrifood systems can
provide people with livelihoods. It is important that the rural poor,
especially the
women among them, benefit from this policy combination.
Food supply chains must keep moving. This means protecting the health of
all supply chain workers.
Economic recovery cannot come at the
expense of health, as
seen in meat processing plants
in the
United States and Germany, and wholesale markets in Mexico, Peru, and Brazil. Health is a precondi
tion for economic recovery; and food is a precondition for health. Similarly, there is a need to increase
testing capacity at ports
to allow vessel crews to disembark without the
need to self-quarantine and
minimize disruption to maritime transportation.
It is
equally critical that smallholder farmers and micro, small, and medium-sized enterprises (MSMEs)
keep operating. In poorer countries, they play a crucial role in supplying food to poor
consum
ers. Supply chain disruptions have hit
MSMEs hard, and they need access to finance to stay afloat
during the drawn-out period between recession and
an upturn in a U-shaped recovery. Central
banks or
international financial institutions should provide warranties, so that banks can help MSMEs
with highly concessional emergency loans, business continuity grants, and moratoriums on
loan
repayments, as
well as
short-term stimulus packages that support sales, cash flow, and working
capital. Banks should set lending targets for smallholder producers and engage in
inclusive agricul
tural investment.
If small enterprises in
agricultural value chains shut down, the problems of
food access and food avail
ability could intersect, creating a nightmare scenario the world is ill-equipped to handle.
Finally, countries have to accelerate intraregional trade. Exports can mitigate losses in revenues. And
imports can improve food availability and stabilize local food prices. In both exporting and importing
countries, access to
various markets can boost producers’ productivity and income.
For Africa, trade within the continent is especially important, because the region can create demand
to compensate the weak demand from Europe. African countries should develop food safety stan
dards across the value chain and ramp up access to infrastructure. The first is vital, as it would reduce
nontariff trade barriers and prevent governments from
imposing blanket import restrictions.
COVID-19 has amplified the voices of
antiglobalization. It is setting off
calls for
food self-sufficiency
as well. It’s understandable, but pursuing food self-sufficiency
is the worst move countries can make
120 PolIcy reSPonSeS
right now. No country has all the natural resources to
produce the food it
needs in the variety it
needs. Facilitating global trade, not promoting self-sufficiency, is key to boosting food security. The
pandemic has also given us an
opportunity to make investments that will lay the foundation to
reset
food systems and whose returns will accrue far
into the future.
The world is
in a grueling 12-round fight against the coronavirus. In every round, there’s a risk of
another lockdown. But the above policy recommendations will prevent millions of
people from facing
outright starvation. They will make it easier for countries to bounce back from the recession and go
the distance.
Originally published July 2, 2020.
PolIcy reSPonSeS 121
122
THE FUTURE OF
PANDEMICS AND
FOOD SYSTEMS
123
28. Africa’s growing risk of diseases
that spread from animals to people
Bernard Bett, Delia Randolph, and John McDermott
Three-quarters of
emerging human infectious disease outbreaks are “zoonotic,” meaning they orig
inate from viruses and other pathogens infecting animals that then “jump” species to infect people.
This “species jump” by pathogens is not new —
it has occurred throughout pre- and recorded his
tory. But in the
last half of the
last century, with the
widespread use of
antibiotics and vaccines, many
had begun to
believe that the
era of
infectious disease was ending. The story of
epidemics, however,
is always evolving.
As we see clearly now with the ongoing COVID-19 pandemic, which
is believed
to have originated from virus-infected meat or
live animals sold in a traditional “wet” food market
in Wuhan, China, our hopes for the end
of infectious disease were badly misplaced. Over
the last
100 years, in fact, there has been growing evidence of
not less but more frequent emergence and
greater spread of zoonotic pathogens in humans and
animals. In recent decades, most of these zoo
notic pathogens were reported in Europe and
the United States. More recently still, Asia, Africa, and
South America appear to be growing in importance as
origins of
zoonotic pathogens.
For centuries, East and Southeast Asia have been the
hotspots of
influenza and other emerging zoo
notic diseases with
pandemic potential, but in this century the
region has also been the origin of
novel coronaviruses causing both the 2002–2003 epidemic of
severe acute respiratory syndrome
(SARS) and the 2019 coronavirus disease dubbed COVID-19. A major cause of the emergence of new
influenzas is the increasing densities of
people and their domestic animals. Greater human popula
tions are also increasing human interactions with wild animals, which is speeding the acquisition
of
disease infections among people.
Africa is now catching
up to Asia as
an infectious disease hotspot. Africa now has the fastest-grow-
ing and youngest human population of
any region in the
world. In 1900, Africa south of
the Sahara
had around 100 million inhabitants; the population now stands at 1 billion and by 2100 is projected
to grow to around 4 billion people. With increasing human populations and increasing demand for
milk, meat, and eggs due to
rising urbanization and incomes, the
densities of humans and domestic
animals are also increasing — particularly in coastal West Africa and North Africa and the highlands
of East Africa. Figure 1 compares the current human, poultry, pig, and ruminant populations across
Africa and Asia. Some regions of
Africa are now approaching the high density levels seen in Asia.
In past
centuries in
Africa, animal pathogens jumping to humans almost always caused limited
outbreaks — reflecting the
comparatively low densities of
people and animals and their relative
isolation. However, this pattern is changing,
with increases in both frequency
of emergence
and
expanded spread in human populations. Here, we highlight key changes in human, animal, and
environmental health drivers contributing to more frequent emergence and greater spread
of
emerging zoonoses in Africa, now
and in the future. Understanding these changes is
critical in
developing preventive and
rapid response strategies and capacities to mitigate the
increasing risk
of epidemics
of emerging diseases
in Africa.
124 the Future oF PandemIcS and Food SyStemS
Figure 1 Population densities of humans, poultry, pigs, and ruminants in
Africa and Asia
Humans Poultry
Country boundary
People/1kmgrid(2020)
0
13,130
26,260
39,390
52,520 0 750 1,500km
Countryboundary
Birds/8kmgrid(2010)
0
422,800
845,600
1,268,400
1,691,200 0 750 1,500km
Pigs Ruminants
Country boundary
Pigs/8kmgrid(2010)
0
2,270
4,550
6,820
9,100 0 750 1,500km
Countryboundary
Animals/8kmgrid (2010)
0
25,390
50,770
76,150
101,530 0 750 1,500km
Source: Human population data were obtained from World Pop; livestock data were obtained from the
Gridded Livestock of the
World database, composed by
Fred Otieno, ILRI.
Note: Regions that have high human populations in Africa include East and West Africa; in Asia, relatively high human populations occur
in southeast China and India. In general, areas with high human populations also have high poultry and other livestock populations.
Emergence and spread of zoonotic pathogens follow different patterns
While there are commonalities, each outbreak, epidemic, and pandemic has its own unique features.
Tracing pathogen emergence from one host species to another has been greatly aided by the advent
of genomic tools and improved but still limited sampling
of the host species. These methods have
helped us
better understand the movement of
pathogens from primates (HIV-AIDS), bats (Ebola), and
rats (Lassa fever) to humans. Zoonotic pathogens can
directly jump from an
animal species to infect
humans (HIV-AIDS from primates) or through other animal species that either act as an
intermedi
ate connector host or
bridge (SARS-coronavirus and SARS-coronavirus 2 that causes COVID-19, from
bats through other wildlife species then to humans) or as
amplifier hosts of pathogens transmitted to
humans (Nipah virus from bats, multiplied in pigs; influenza viruses mixing between human, pig, and
poultry populations in East and Southeast Asia). While many new diseases originate in wildlife, for
some of
the most serious, livestock have been a connector or
amplifier host.
Prevention or, failing that, rapid initial containment before an exponential growth of cases is the health
goal. Low population density and stable societies serve as natural preventive measures. In Africa in
the Future oF PandemIcS and Food SyStemS 125
past centuries, infectious pathogens jumping from animals to humans almost always caused limited
outbreaks or “burned out.” For example, simian immunodeficiency viruses have likely been transmit
ted from primates to humans from prehistoric times, but did not cause serious epidemics until the late
20th century. But the dramatic social, demographic, and health changes that began in late 19th century
Africa helped to transform these occasional pathogenic wildlife-human spillovers into pandemics of
human-to-human disease transmission, such as the human immunodeficiency virus (HIV).
This new pattern of
disease emergence is
unfortunately likely to become increasingly common, given
the dramatic rise in Africa’s human population.
table 1 Important examples of recent epidemic zoonoses
not previously known
EMERGING
ZOONOSIS
PRIMARY
ANIMAL HOST
AMPLIFYINGANIMAL HOST GEOGRAPHICALIMPACT APPROXIMATE
DATES
HIV-AIDS Primates
Global with
major burden in
Africa
Late 1970s to
present
Ebola Bats* ? Africa (Central,
East, West)
Varied out
breaks; major
epidemic in 2015
Nipah Bats Pigs SE Asia
Severe acute
respiratory syndrome
(SARS)
Bats Civets
Origin in China
to multiple other
countries
2003
Middle East
respiratory syndrome
(MERS)
Bats Camels Middle East and
East Africa 2008 to present
Covid-19 Bats tbd Origin in China
to global
December 2019
to present
Avian flu (H5N1) Wild birds Poultry
East/Southeast
Asia to global
(Americas
relatively spared)
2005 to 2010
Swine flu (H1N1) Pigs Global 2009
Source: Authors’ notes.
Note: *Bat transmission of Ebola is assumed but not confirmed.
126 the Future oF PandemIcS and Food SyStemS
What might change regarding the frequency of pathogen emergence
in primary animal hosts and subsequent transmission to humans and
domestic animals?
This zoonotic pathogen and human disease pattern continues to
evolve and change. Infectious zoo
noses producing severe clinical illness and high mortality, such as Ebola and HIV-AIDS, are the
most
highly visible signs of
emerging zoonoses in
Africa. As
in Asia, increasing changes in land use, includ
ing the expansion of human settlements and agricultural lands, are increasing contacts between
humans and wild animal host species. That human disease outbreaks of yellow fever and other hem
orrhagic fevers are associated with exposure to new pathogens through human incursions into forests
has been well known for two centuries. But the
routine exploitation of
forests for
mining and other
resource extraction purposes in recent decades has created new opportunities for viral transmission.
Rising human populations in parts of
Africa are accelerating the
use of forests for hunting bushmeat
for consumption and use in traditional medicines and
trade. As
in China, wet markets for bushmeat
are also found in
Africa and there is
also considerable illegal international trade.
Closer interfaces between dense human settlements and forests continue to
expand. Many wildlife
species — most worryingly, from a pathogen emergence perspective, bats — are increasingly adapting
to peri-urban living. Accra, the capital of
Ghana, is home to more than a million fruit bats and hunting
and sales are important economic activities. One
critical question is whether bat pathogens, includ
ing a range of bat coronaviruses, are also evolving to become more adapted
to multiple animal hosts,
including humans. Analyses of
bat coronaviruses, including SARS-Cov-2, indicate that they may more
easily mutate to infect humans than in
the past.
What might change in the frequency of zoonotic pathogen
emergence and spread from intermediate or amplifier animal
species?
For some emerging zoonoses, the spread of
infections in domestic animal species is the key factor.
For both Nipah and MERS (Middle East respiratory syndrome, caused by a coronavirus), the spread
from bats to intermediate domestic animal hosts was important in the subsequent emergence of
the
disease in humans. These zoonoses are among those that continue to exist and could “re-emerge” at
higher rates in humans with increasing human densities and poor management and hygiene
of their
main amplifier species — pigs for Nipah and camels for MERS.
Influenza viruses have been responsible for many epidemics over the past
centuries, including the flu
pandemic of
1918–19 that killed more people than any other documented pandemic — one-third of
the world was infected and around 50 million people died. Interestingly, in the H5N1 (avian flu) epi
demic of
2006–2011 that raised global animal and human health concerns, H5N1 infections became
endemic in Indonesia but were relatively quickly eliminated following their introduction in West
Africa, perhaps because Indonesia at
that time had much greater poultry densities than West Africa.
But West African poultry density is now catching up
to Asia’s.
the Future oF PandemIcS and Food SyStemS 127
What is changing in human societies that facilitates the spread of
emerging zoonotic pathogens?
Increasing human populations, urbanization, and rising incomes are changing Africa in
fundamental
ways. One
major change is a dramatic increase in air travel between Africa and the rest of the world.
While traditionally most African travel connections have been through Europe or the Middle East, in
the past
decade the number of
African connections to Asia has been rising. The first “African” case of
COVID-19 was diagnosed in Nigeria in a traveler coming from Italy.
As in other developing regions, Africa’s health and social support systems to serve the growing and
more mobile human populations have lagged. This emerged as a critical issue in the AIDS epidemic
in Africa. With regard to COVID-19, Marius Gilbert and
colleagues combined data on
Chinese air
travel connections with available indices on
health preparedness and infectious disease vulnerability
indices to
rank country risk. As
noted above, Ebola outbreaks in
Africa have usually been contained
locally; the 2015 West Africa Ebola epidemic spread through countries with very weak health systems.
In 2019, an Ebola outbreak in the
Democratic Republic of the Congo persisted as it
occurred in a con
flict zone. The combination of Africa’s weak health systems, the expanding health needs of its
grow
ing populations, and its
ongoing conflicts are a great concern for the continent’s emerging zoonoses
preparedness and response.
Implications and opportunities for controlling emerging infectious
diseases in Africa
The rising risk of emergence and spread of
zoonoses in
Africa has significant consequences for the
continent and the rest of
the world. Epidemics in
recent decades have varied in both their causes and
effects and there are no
common guidelines for the prevention or
early control of
zoonotic diseases.
To increase Africa’s resilience to the threat of emerging zoonoses, regional and global cooperation are
essential. The continent’s disease control capacity and preparedness programs should be increased
and scarce resources should be transferred to where they are needed most. These require strength
ening regional human (WHO regional office for Africa) and animal health (African Union–InterAfrican
Bureau for Animal Resources) bodies. Governments and organizations should also adopt a coordinated
One Health response across human, animal, and environmental health. Bringing these three disciplines
together is essential to respond to the increasing threat of emerging zoonoses in Africa.
The record thus far on COVID-19 and on past disease outbreaks shows that early, effective, and sus
tained response is essential to winning the battle over these diseases. Innovative use of information and
communication tools and platforms and engagement of local communities are crucial to improved dis
ease surveillance and effective response. Building these systems requires demand from the public and
commitment from policymakers and investors. COVID-19 is a game-changer. It has shocked the world
and continues to disrupt the daily lives of billions of people. Its eventual impacts on Africa are not yet
fully apparent but may be enormous. But it
will also provide important lessons in disease prevention
and early response, the kind of lessons routinely ignored in the past, and point the way to combining
effective disease-fighting practices linking human, animal, and environmental health.
Originally published April 7, 2020.
128 the Future oF PandemIcS and Food SyStemS
29. COVID-19 and the promise
of food system innovation
Corinna Hawkes
One of the silver linings of any crisis is the innovation
it produces.
And when
it comes to food,
COVID-19 is no
exception.
The evidence, anecdotal as it
is, shows that lockdowns around the world have had a profound impact
on the markets, transport, and labor supply needed
to produce, distribute, and sell nutritious foods.
With reports of
vegetables rotting in the fields and milk being thrown away while people go
without,
a clear mismatch has emerged between supply and demand.
But as
things have closed down, new spaces have opened up. Innovations driven by government,
business, and communities targeting production, distribution, markets, and consumers have prolifer
ated to enable food to get to people who need it in new ways. Crisis often necessitates new actions
for short-term solutions. But given the longer-term problem of
undernutrition and overweight around
the world, and the ongoing conversation about how food
systems need to change, it’s worth asking:
do these innovations tell us
anything about what is possible and beneficial for
food systems transfor
mation toward nutritious, healthy diets for all?
Let’s look first at
the innovations themselves. Digital innovations have been noteworthy in
enabling
producers to conduct their businesses in new ways. In China, where
the pandemic began,
the
Chinese Agricultural Product Market Association has
been working with e-commerce businesses and
mobile chat groups to provide online platforms to help supply meet demand; suppliers post
infor
mation about what foods they have and buyers do likewise about what they need. Government has
also simplified registration procedures and provided training on
sales and consumer-oriented mar
keting to make it easier for farmers to set up e-enterprises for their products. In India, the National
Informatics Centre created the Kisan Rath mobile app to help farmers and traders find vehicles to
move their fruits and vegetables to market. In Malawi, farmers are reportedly adding value to prod
ucts otherwise lost — tomatoes into pastes, for example — and using online advertising platforms to
get the word out. In Oman, the Ministry of
Agriculture and Fisheries has established an online auc
tioning platform to enable electronic bidding for fish.
Innovations in distribution have likewise been driven by government, as
well as
by communities them
selves. In India, an
amendment to the
Agriculture Produce Market Committee Acts now allows farm
ers to sell their harvests from multiple locations and to any buyer, rather than just in
designated
markets. In Fiji, the
Agriculture Marketing Authority stepped in to
buy fresh foods direct from suppli
ers unable to travel to
market, selling them on
at no
added cost to market vendors. In Nepal, commu
nities established “agri-ambulances” to get vegetables from farm to
market.
the Future oF PandemIcS and Food SyStemS 129
Elsewhere, there have been innovations in point-of-sale. In Quito, Ecuador, sales from the city’s exten
sive network of
urban and peri-urban agriculture have been diversified to
include third-party trans
actions and basket sales direct from the
gardens. In Addis Ababa, Ethiopia, the government has
provided a renovated stationary bus as
a venue for urban farmers to provide direct market access to
local people.
For people going short on food, new methods are likewise being used to
supply food, vouchers, and
meals. Innovations at
the urban level are of particular note. From the food
deliveries in
Lima, Peru, to
the community kitchens in
Freetown, Sierra Leone, and Masiphumelele, South Africa, communities,
governments, private enterprise, and funders are finding new ways to feed people. Other examples
include vouchers for families formerly supported by the nationwide free school meals program in São
Paulo, Brazil, and repurposed buses being used to
deliver food in Wuhan, China. At
the national
level, it is
reported that governments in the Pacific Islands and Sri Lanka are distributing seeds to
encourage households to grow their own. Much more dominant are new social protection measures:
the World Bank reports that as of
June 12, 2020, 173 countries had enacted 621 new social protection
measures, including cash transfers and in-kind food and voucher schemes — a vital lifeline to enable
people in
poverty to
afford nutritious foods. Some have also taken measures to stabilize prices. Sri
Lanka, for instance, is reported to have fixed
the wholesale price
of vegetables. New finance
measures have been taken with potential to support small food enterprises and food production.
Needless to say, it’s not known if these innovations are working. Doubtless, some are not. Others will be
mired in political conflict; plenty more will not go far enough. Others may even be inappropriate — such
as reports of junk food in delivery schemes — or misplaced. Elsewhere, doors to novel ideas remain firmly
shut. So this is not a case of championing innovations for innovations’ sake, and endorsing them without
a critical eye. Rather, it is a case of assessing what can be learned from them about what is possible and
beneficial for food systems change.
Here are three ways these innovations show the way forward. There are likely more.
First, food systems solutions to ensure the right kind of
food gets to those most vulnerable are pos
sible. During COVID-19, the
bureaucratic, financial, logistical, and technological reasons that always
seemed to make actions impossible or improbable have fallen away. This shows, at
its heart, that
it is a
political choice of whether to act or not.
When there is a will, change is possible.
Second, concerted, creative, and cross-sectoral intervention is needed
to get food systems working
for better diets. It’s not something that can simply be
left to happen without a clear plan. Important as
government is
in these interventions, innovation also needs to
involve communities, businesses, and
partnerships. Creative thinking is needed to find
the right solution from the diversity of possible inno
vations; this is not
the time
to fall back into pre-held assumptions about how food systems ought to
work. Solutions can come in the form of
hard regulation, for example, as well as
business-driven solu
tions, through local markets as well as global ones.
Third, innovation is a huge opportunity to build evidence for the way forward. COVID-19 has pro
vided a real-life innovation lab, a testing ground for big ideas. Test, fail, succeed, learn, change. What
is working (or not) and why? What
can we learn from this
to redesign
food systems? Experimenting
our way to the future can and should be a way forward. A next step should be to assess what can be
130 the Future oF PandemIcS and Food SyStemS
learned about what works (and what does not) and which innovations show most promise in
effecting
food systems change at
different levels.
COVID-19 has disrupted food systems everywhere. But it has also provided
an unprecedented oppor
tunity for
innovation, a space in
time when immediate needs have spurred responses never seen
before, a base on
which to redesign food
systems for the better.
Originally published June 18, 2020.
the Future oF PandemIcS and Food SyStemS 131
30. COVID-19 and resilience
innovations in food supply chains
Thomas Reardon and Johan Swinnen
The COVID-19 pandemic has triggered intense discussions about the
vulnerability of the world’s food
systems and food supply chains (FSCs) and about the
roles of
different types of
supply chains, such as
local vs. global, in
providing food security. We know that the
spread of the novel coronavirus and gov
ernment-imposed lockdowns and other restrictions have had a range of
impacts on FSCs, and trig
gered a variety of creative innovations to keep supply chains running.
To guide government policy responses going forward, and to facilitate a shift to more resilient FSCs in
the long run, we
need to understand several things: the role of various types of
supply chains in food
security; how resilient they have — or have not
— been to
the pandemic’s impacts; and what innova
tions are now emerging to improve their resilience.
Here, we distinguish between global chains (where the food or agricultural raw material is produced
in one country and consumed in
another) and domestic chains (where food is produced and con
sumed in the same country). Within domestic chains, it is useful to distinguish between those relying
on small and medium-sized enterprises (SMEs) in logistics, trade, processing, and retailing; and those
dominated by large-scale enterprises, including fast
food chains, supermarkets, large processors, and
big logistics firms.
While there are obviously important differences across commodities and countries, available data
suggest that domestic supply chains, especially those dominated by SMEs, are by far
the most
important for supplying food to consumers in developing countries. Rough estimates suggest that,
on average
for South Asia and Africa south of the Sahara, domestic chains account for between 75%
and 90% of food consumed, of
which the vast
majority comes through SME–dominated chains and up
to 20% through large-scale enterprises. Global chains account roughly for 15% to 20% of
food con
sumption in
these regions, with a positive correlation between GDP and their share.1
Pandemic-related disruptions in supply chains are concentrated in
their labor-intensive segments. In
general, supply chains in rich countries have been more resilient because they are more capital- and
knowledge-intensive. Notable exceptions are harvesting that depends on
migrant labor; labor-dense
processing such as in meat processing in the United States; and obviously restaurants and other
food-service sector firms.
Still, there are important differences among FSCs in
developing countries. Global FSCs have been
more resilient because trade is mostly undertaken by large enterprises in coordinated and capi
tal-intensive supply chains that can mostly adjust to disruptions geographically and temporally, and
somewhat in product composition. While there is much concern about COVID-19 affecting trade in
1 Barrett, C., T. Reardon, J.Swinnen, and D. Zilberman, 2020, “Agrifood Value Chains Revolutions in Low and Middle Income
Countries,” unpublished manuscript. See appendix.
132 the Future oF PandemIcS and Food SyStemS
perishables, most extraregional trade is organized through large capital-intensive firms.2 These large
trading companies can reduce risk and adjust to shocks as
they are more flexible in
switching global
sourcing and destination regions and in
diversifying and shifting stocks to manage risk — as
they
already do to manage risks from climate shocks (Reardon and Zilberman 2018).
Within domestic FSCs, COVID-19 and lockdowns have mixed effects. Large-scale companies are gen
erally less labor intensive but rely more on
hired labor (affected especially by lockdowns), while SMEs
are more labor intensive, but use more family labor. Wholesaling and logistics operations, such as
third-party logistics firms (3PLS) in
trucking and transport, which are very important for food transport
in Africa south of the
Sahara, are disrupted by mobility restrictions and wholesale market restrictions.
These also affect farm input distribution in
rural areas. These differences matter for processing, trade,
and logistics, and also apply to
the farm sector. Larger mechanized farms are less affected by pan
demic restrictions, but those that depend on
hired labor have felt an
impact. Hired farm labor is rela
tively rare in Africa south of
the Sahara, except for labor-intensive poultry and horticulture operations,
compared to India, for example, where farms depend much more on
hired labor (Reardon et
al. 2020).
Supermarkets and large processors in
developing countries depend largely on
SME wholesalers, but
the largest companies — such as
Future Group, a leading supermarket chain in India — tend to have
their own logistics and procurement units. This allows them more control and coordination to maxi
mize their sourcing in the face of
constraints. SMEs have to take what they can get.
Innovations and food chain resilience
Supply chain participants have introduced a series of innovations in response to
COVID-19 and
restrictions. So far, there is
little systematic data available on
these entrepreneurial and creative insti
tutional responses. Anecdotal information suggests that these innovations are important and could
have a major impact on the future of FSCs in developing countries — in particular buttressing their
resilience. Entrepreneurs are telling us that “what we
thought would only be possible over the next
two decades is now being introduced in a few months.”
There are several kinds of
mutually supporting innovations:
Social innovations. Labor interactions in value chains are being reorganized to reduce shortfalls of
access to
labor, while guaranteeing worker safety. This involves:
• Increased flexibility of
labor sourcing and timing, including facilitating the
movement and safety
of workers. For example,
in Nigeria large chicken processors are busing workers to plants and
increasing the number of shifts so there are fewer workers in
the plant at one time.
• Increased flexibility by replacing workers with machines. This is easier for
large farms and large
firms, as
they are more mechanized to
begin with.
This of
course implies a challenge of
reduced
employment both in the
short and long term.
2 For example, Bakhresa, the
biggest food processor in
East Africa, imports wheat that then goes to big mills; or
see activities of
companies like Charoen Pokhphand Food in
Asia (see AGRA 2019 and Reardon and Zilberman 2018).
the Future oF PandemIcS and Food SyStemS 133
Business strategy innovations in
systems of
input procurement and output or service market
ing. The business adjusts its
systems to
mitigate risks such as
a rapid drop in demand among its
usual
clientele, or a sudden blockage to its
sourcing a key input. The changes are parallel to
those made
for labor:
• Increased flexibility in
marketing by diversifying the customer base and ways to
reach consum
ers. For example, restaurants quickly moved from on-site service to
delivery (as we discuss more
below). Likewise, a supplier might have previously targeted only food service and then shifted to
retail or direct sales to consumers.
• Increased flexibility in
sourcing by diversifying logistics; diversifying input types to
get what’s avail
able; and diversifying geographic sources to reduce risk. The latter resembles actions firms were
taking pre-pandemic to address climate risk (Reardon and Zilberman 2018).
Technological innovations. Introducing technologies that improve hygiene while requiring fewer
personal interactions between workers, and between the firm and customers. Examples include con
tactless delivery and e-commerce for customers.
Financial resilience innovations. Large companies are also creating financial resilience innova
tions for SMEs. In India, Swiggy, a fast-growing food delivery app
and logistics company, delivers
for 40,000 restaurant partners, helping them with its
“jumpstart package” to recover sales, while the
Swiggy Capital Assist Programme helps pay for hygiene and distancing upgrades. In Singapore,
Unilever Foods Solutions partnered with e-commerce platform Carousell to
launch #SupportLocal,
enabling 180,000 food and beverage firms in
Southest Asia to connect online with local diners.
Unilever also shifted to advance payments to
small farmers and credit to small retailers to
support
their resilience over the
past three months.
Growth of e-commerce
E-commerce is a particularly vibrant example
of innovation. While the use of e-commerce in most
developing countries has generally been low, in some it was growing rapidly even before COVID-19.
For example, in China — with more than a billion people now online — e-commerce was increasingly
widespread, even in
rural areas.
Apart from COVID-19, the demand-side drivers of e-commerce are similar to
those of the “super
market revolution”: increasing opportunity costs of time for shopping, magnified by traffic time
with urban congestion, enhances the benefits of one-stop-shopping at
supermarkets — and now
e-commerce.
The supply-side drivers are (1) rapid diffusion of
digital technologies, internet, computers, and mobile
phones; (2) intense competition and investments in the
past decade by e-commerce multinationals
(first Amazon, then also Alibaba) joined by e-commerce domestic firms (such as
Flipkart in India and
Jumia in
Nigeria); (3) e-commerce by supermarket chains (such as the
Walmart–Flipkart joint venture
in India); and (4) complementary investments by logistics firms (such as
FedEx and local counterparts),
delivery firms (such as
Instacart and Deliveroo), and mobile money firms.
134 the Future oF PandemIcS and Food SyStemS
COVID-19 has accelerated the first wave of e-commerce diffusion already underway led by large com
panies, and — encouraged by governments and NGOs
facilitating e-commerce platforms — created a
second wave into the
realm of SMEs in trade, logistics and delivery, and mobile money firms.
E-commerce is growing fastest
in Asia, but is increasingly spreading
in Africa too. Large e-commerce
companies are rapidly developing both retail services and intermediation services to
help SMEs. In
response to
COVID-19, Alibaba has scaled up local deliveries of fresh produce to Chinese consumers.
It adapted its
online shopping site Taobao to provide deliveries in “one hour” with “hyperlocal fulfill
ment” including from SME retailers and independent chains (Song 2019; Chou and So 2020). In India,
Flipkart is growing fast during the COVID-19 crisis
and developed a “hyperlocal delivery” grocery ser
vice linking SME suppliers with domestic supermarket chains like Vishal Mega Mart with its e-com
merce operations (Economic Times 2020, 2020). In Nigeria, Jumia has seen its
year-on-year sales
quadruple with COVID-19 (Kazeem 2020).
SMEs are also starting their own e-commerce services to cope
with COVID-19. In Thailand, SMEs are
selling food directly to
consumers via Facebook and local delivery apps over mobile networks (Leesa
Nguansuk 2020). Malaysia-based MyFishman.com provides fresh seafood subscriptions and delivery
services to local fishermen (Harper 2020).
Business associations and governments are also facilitating e-commerce during COVID-19. In China,
the China Agricultural Wholesale Market Association began working with
e-commerce and mobile
chat groups to link suppliers and buyers (Fei and Ni 2020). In Myanmar, the Myanmar Pulses, Beans &
Sesame Seeds Merchants Association started an
e-platform to
link domestic suppliers and proces
sors and exporters.3 In India, the
National Informatics Centre created the Kisan Rath mobile app to
help farmers and traders find vehicles to move their fruits and vegetables to
market (Financial Express
Online 2020).
Lessons and recommendations
The resilience of domestic supply chains is
crucial to food security in developing countries. They
are dominated by SMEs that have been particularly vulnerable to pandemic-related impacts, and
to a lesser degree by emerging large enterprises and global value chains, both somewhat better
equipped to
weather COVID-19 shocks. Domestic FSCs have been particularly disrupted downstream
in food service and retail, moderately in processing, and much less so in farming, except where hired
labor is important.
Steps by the private sector — both large firms and SMEs — include introduction of flexibility in labor
access, in product procurement, in marketing, in technology, and in
financial resilience. In many cases
the innovations by large firms, such as with e-platforms and credit, have made SMEs‘ suppliers and
retailers more resilient. The expansion of e-commerce has accelerated, and we
expect that to con
tinue post-pandemic. E-commerce has helped SMEs deliver food to
consumers under lockdowns and
other constraints, and added to the
resilience of
the supply chains in developing regions.
3 We are grateful to Curtis Slover of UNOPS for this field observation.
the Future oF PandemIcS and Food SyStemS 135
Many government officials and donors have worried that the pandemic would simply stop the
opera
tion of
supply chains — requiring them to
step in and replace the market. This would be neither possi
ble, given the
massive scale of
the market and food demand, nor necessary in many cases, given the
steps supply chain actors are taking to adapt and build resilience. Of
course, these efforts have not
been universally successful — there is obvious evidence of real dips in business activity and demand,
with accompanying employment losses. But the many cases of
innovation we identify paint a picture
of a private sector, as well
as associations and governments, keen and able to innovate. Governments
and development partners would do well to support that innovation with investments in
hard and soft
infrastructure and an
enabling business and commerce environment for both SMEs and large compa
nies eager to
play their part in resilience for food security during the pandemic and recovery — and in
rebuilding for the future.
Originally published July 6,
2020.
136 the Future oF PandemIcS and Food SyStemS
Contributors
Johan Swinnen is director general of IFPRI,
Washington, DC, USA.
Eugenio Díaz-Bonilla is head of IFPRI’s Latin
American and Caribbean Program, Washington,
DC, USA.
John McDermott is the director of the CGIAR
Research Program on
Agriculture for Nutrition
and Health (A4NH), Washington, DC, USA.
Eve Dill is a social science research professional
with the Rural Education Action Program (REAP)
in the Freeman Spogli Institute for International
Studies at Stanford University, Stanford, CA, USA.Channing Arndt is director of IFPRI’s
Environment and Production Technology
Division, Washington, DC, USA. Xinshen Diao is the deputy director and a senior
research fellow in IFPRI’s Development Strategy
and Governance Division, Washington, DC, USA.Marc F. Bellemare is a professor in the
Department of Applied Economics at the
University of Minnesota, St. Paul, MN, USA. Shenggen Fan is a chair professor at China
Agricultural University, Beijing, China, and
former director general of IFPRI.Bernard Bett is a senior scientist, Animal and
Human Health, at the International Livestock
Research Institute (ILRI), Nairobi, Kenya. Sherwin Gabriel is an IFPRI research collaborator,
Pretoria, South Africa.
Ruchira Boss is a research analyst for the CGIAR
Research Program on Agriculture for Nutrition
and Health (A4NH), New Delhi, India.
Daniel Gilligan is deputy director of IFPRI’s
Poverty, Health, and Nutrition Division,
Washington, DC, USA.
Antoine Bouët is a senior research fellow in
IFPRI’s Markets, Trade, and Institutions Division,
Washington, DC, USA.
Joseph Glauber is a senior research fellow in
IFPRI’s Markets, Trade, and Institutions Division,
Washington, DC, USA.
Clemens Breisinger is a senior research fellow
in IFPRI’s Development Strategy and Governance
Division and head of IFPRI’s Egypt Strategy
Support Program (ESSP), Cairo, Egypt.
Yetimwork Habte is a research officer with
IFPRI’s Ethiopia Strategy Support Program
and the
Policy Studies Institute, Addis
Ababa, Ethiopia.
S. Mahendra Dev is vice chancellor of the Indira
Gandhi Institute of Development Research,
Mumbai, India.
Corinna Hawkes is director of the Centre for
Food Policy at
City, University of London, UK.
Alan de Brauw is a senior research fellow in
IFPRI’s Markets, Trade, and Institutions Division,
Washington, DC, USA.
Derek Headey is a senior research fellow in
IFPRI’s Poverty, Health, and Nutrition Division,
Washington, DC, USA.
Kevin Chen is a senior research fellow with IFPRI’s
East and Central Asia Office in Beijing and chair
professor at Zhejiang University, Beijing, China.
Melissa Hidrobo is a senior research fellow in
IFPRI’s Poverty, Health, and Nutrition Division,
Dakar, Senegal.
contrIbutorS 137
Kalle Hirvonen is a senior research fellow with
IFPRI’s Ethiopia Strategy Support Program,
Addis Ababa, Ethiopia.
Mamata Pradhan is a research collaborator
with IFPRI.
Neha Kumar is a senior research fellow with
IFPRI’s Poverty, Health, and Nutrition Division
(PHND), Washington, DC, USA.
Agnes Quisumbing is a senior research fellow
with IFPRI’s Poverty, Health, and Nutrition
Division, Washington, DC, USA.
David Laborde is a senior research fellow in
IFPRI’s Markets, Trade, and Institutions Division,
Washington, DC, USA.
Heather Rahimi is a communications and
administrative associate of the Rural Education
Action Program (REAP) in the Freeman Spogli
Institute for International Studies at Stanford
University, Stanford, CA, USA.
Abla Abdel Latif is the executive director of
the Egyptian Center for Economic Studies,
Cairo, Egypt.
Delia Randolph is co-leader for Animal and
Human Health, International Livestock Research
Institute, Nairobi, Kenya.
Will Martin is a senior research fellow in
IFPRI’s Markets, Trade, and Institutions Division,
Washington, DC, USA.
Mariam Raouf is a research associate with IFPRI’s
Egypt Strategy Support Program, Cairo, Egypt.
Ruth Meinzen-Dick is a senior research fellow in
IFPRI’s Environment and Production Technology
Division and co-leader of the CGIAR Research
Program on Policies, Institutions, and Markets
(PIM) Flagship Program on
Governance of
Natural Resources.
Thomas Reardon is a professor in the
Department of
Agricultural, Food, and Resource
Economics at
Michigan State University, East
Lansing, USA.
Danielle Resnick is a senior research fellow with
IFPRI’s Development Strategy and Governance
Division, Washington, DC,USA, and leads IFPRI’s
Governance Theme.
Bart Minten is a senior research fellow in IFPRI’s
Development Strategy and Governance Division,
and former leader of the Ethiopia Strategy
Support Program, Addis Ababa, Ethiopia.
Tia Palermo is an associate professor
in the
Department of Epidemiology and Environmental
Health, University of Buffalo (State University of
New York), Buffalo, NY, USA.
Claudia Ringler is deputy director of
IFPRI’s
Environment and Production Technology
Division, Washington, DC, USA, and co-leader
of the CGIAR Research Program on Water, Land
and Ecosystems (WLE) Flagship Program on
Variability, Risks and Competing Uses.
Sherman Robinson is an IFPRI research fellow
emeritus, Washington, DC, USA.
Amber Peterman is an associate research
professor in the
Department of
Public Policy
at the University of North Carolina
at Chapel
Hill, USA.
138 contrIbutorS
Devesh Roy is a senior research fellow
with the
CGIAR Research Program on Agriculture for
Nutrition and Health (A4NH), New Delhi, India.
Maximo Torero is the chief economist and
assistant director general for Economic and
Social Development at
the Food and Agriculture
Organization of
the United Nations, Rome, Italy.
Shalini Roy is a research fellow in IFPRI’s
Poverty, Health, and Nutrition Division,
Washington, DC, USA.
Rob Vos is director of IFPRI’s Markets, Trade,
and Institutions Division, Washington, DC, USA.
Scott Rozelle is a senior fellow and the co-director
of the Rural Education Action Program (REAP)
in the Freeman Spogli Institute for International
Studies at Stanford University, Stanford, CA, USA.
Huan Wang is a research scholar with the
Rural Education Action Program (REAP), in
the
Freeman Spogli Institute for International Studies
at Stanford University, Stanford, CA,
USA.
Marie Ruel is director of IFPRI’s Poverty, Health,
and Nutrition Division, Washington, DC, USA.
Michael Wang is a Mickey Leland International
Hunger Fellow in
IFPRI’s Development Strategy
and Governance Division, Washington, DC, USA.
Claudia Sadoff is director general of the
International Water Management Institute,
Colombo, Sri Lanka.
Manfred Wiebelt is a senior research fellow and
professor of Economics at the
Kiel Institute for
the World Economy, Kiel, Germany.
Wei Si is a professor at
the College of
Economics and Management, China Agricultural
University, Beijing, China.
Yue Zhan is a research assistant with IFPRI’s East
and Central Asia Office, Beijing, China.
Mark Smith is deputy director general of the
International Water Management Institute,
Colombo, Sri Lanka.
Yumei Zhang is a visiting research fellow with
IFPRI and senior research fellow with the Institute
of Agricultural Economics and Development of
the Chinese Academy of Agricultural Sciences,
Beijing, China.Gashaw Tadesse Abate is a research fellow with
IFPRI’s Markets, Trade, and Institutions Division,
Addis Ababa, Ethiopia.
Seneshaw Tamru is a researcher with the
International Growth Centre–Ethiopia, Addis
Ababa, Ethiopia.
Xiaobo Zhang is a senior research fellow with
IFPRI’s Development Strategy and Governance
Division, Washington, DC, USA, a chair professor
of Economics at Peking University, China, and
a visiting fellow with the Center for Global
Development and European Institute for
Chinese Studies.Agajie Tesfaye is a senior researcher with the
Ethiopian Institute of
Agricultural Research,
Addis Ababa, Ethiopia. David Zilberman is a professor in the Agricultural
and Resource Economics Department at the
University of California, Berkeley, USA.James Thurlow is a senior research fellow with
IFPRI’s Development Strategy and Governance
Division, Washington, DC, USA.
contrIbutorS 139
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
A world free of hunger and malnutrition
IFPRI is a CGIAR Research Center
1201 Eye Street, NW
| Washington, DC
20005 USA
T. +1-202-862-5600 | F. +1-202-862-5606 | [email protected]
www.ifpri.org
