The COVID-19 pandemic is a global humanitarian crisis with tragic loss of life and enormous economic repercussions. At the beginning of April 2020, more than half of the global population was ordered to stay at home to prevent the spread of the virus. Unemployment rates have soared as businesses have been forced to stay closed; some may never re-open. Global food systems are also under stress, since measures to limit the spread of the disease have spill-over impacts on the movement of people and products. As described in COVID-19 and the Food and Agriculture Sector: Issues and Policy Responses the COVID-19 crisis is affecting supply and demand for food in complex ways.

Even before the outbreak of COVID-19, global food systems were faced with a formidable “triple challenge” of simultaneously providing food security and nutrition to a growing global population, ensuring the livelihoods of millions of people working along the food chain from farm to fork, and ensuring the environmental sustainability of the sector. The world’s population is expected to reach almost 10 billion in 2050, requiring a significant increase in the production of affordable, healthy and nutritious food. Global food systems are also essential to the livelihoods of people working on the more than 570 million farms worldwide. Along the agro-food chain, food systems are an especially important source of livelihoods in developing countries. Moreover, global food systems are not only dependent upon sustainable natural resources, but are responsible for the vast majority of global land and water use, and are an important source of greenhouse gas emissions.

The manner in which food systems absorb, recover, adapt and transform in response to the shock of COVID-19 will shape their level of resilience and their ability to deliver on the longer-term triple challenge. Policies and approaches to address both the dramatic short-term shocks and to enhance long-term resilience are essential, and those that encourage global food systems rather than domestic self-sufficiency will be more effective at meeting the triple challenge.

Global food systems have made remarkable achievements since the 1960s, including by contributing to the significant reduction in global undernourishment, and to improvement in farm livelihoods and agricultural productivity. The scale of past achievements is as remarkable as what remains to be done:

  • The world population has grown from 3 billion in 1960 to about 7.5 billion today, and there is more food available per capita than ever before. Still, globally, over 800 million people are undernourished and an even greater number are either overweight or obese.

  • The process of technical and structural change has benefited many farm households who have been successfully absorbed in faster growing parts of the economy, while consumers have benefited from lower prices and high quality, nutritious food. At the same time, this process has put pressure on the incomes of farmers who are not able to compete and, in some countries, contributed to distress migration to urban areas.

  • The tripling of agricultural production since 1960 has been achieved primarily through improved yields and productivity growth, with only modest overall change in agricultural area. Had those productivity gains not been realised, the consequences for human development and for the environment would have been devastating. Nevertheless, production growth has imposed stresses on soil and water resources, and direct emissions from the agricultural sector accounts for 11% of global greenhouse gas (GHG) emissions.

Notwithstanding these achievements, countries’ policies with respect to the “triple challenge” remain weak in overall terms. Investments are needed to improve the resilience of food systems, not just to COVID-19, but also to the multitude of shocks that can affect the food and agriculture sector. Increased resilience is also essential if food security and livelihoods goals are to be met in the context of a changing climate and other environmental emergencies.

Yet, policy efforts have not been moving in this direction. Recent progress made by many OECD countries in shifting towards better targeted and less distorting support measures – for example, measures with a greater focus on innovation or technical advice to farmers – has largely stalled. The OECD’s annual agricultural policy monitoring exercise (covering 53 countries and 75% of global agricultural value-added) shows that, in 2016-18, these countries provided a total of USD 705 billion per year in support to their agricultural sectors. About three-quarters of this support, USD 528 billion per year, was transfers to individual producers. Much of this support is linked to production of specific products, which reduces the flexibility of farms and food systems to adapt to unexpected economic or production shocks, climate change, or even shifts in consumer preferences. Rather than aiding the livelihoods of smaller producers, support also tends to go predominantly to larger producers, and negatively affects producers in other countries. Lastly, such support can undermine food security by increasing domestic prices, creating price volatility and undermining global markets as a source of resilience by making it harder for supply shocks in one country to be compensated by production in others.

Indeed, global trade in agriculture and food remains highly distorted. Average applied tariffs for agricultural products in OECD countries in 2015 were 7.4% (with WTO bound rates of 28.7%) in comparison to average applied tariffs for industrial products of 2.2% (and WTO bound rates of 11.2%) for the same period. Tariff rate quotas, which are not permitted for other goods under global trade rules, still restrict imports of many agricultural products.1 With the fastest rates of population growth out to 2050 and associated growth in food demand set to come from Sub-Saharan Africa, a region struggling to raise low agricultural productivity, increased global food trade will be essential. Furthermore, changing climatic conditions will also alter what can efficiently be grown where, causing shifts in trade – or potentially the need for more trade.

COVID-19 is compelling policy makers to make urgent decisions to ensure food supply chains continue to function. While short term policies can assist global food systems to adapt, there is uncertainty as to how these impacts will evolve over time. There is a need to ensure that short-term measures do not become permanent and that policies designed to contribute to long-term goals of resilient, sustainable and productive global food systems are reinforced, not undermined, by policy action during the crisis. For policy makers, the fundamental task is to implement necessary interventions to address immediate pandemic disruptions, while continuing to invest in policies to tackle the triple challenge in the medium- and long-term.

Food and nutritional security depends on production and trade, and requires well-functioning supply chains to make sure food is available where consumers are. Over the past few decades, global food availability has outpaced population growth, leading to increasingly affordable food. COVID-19 containment measures have disrupted food production and trade, although global food availability has held up remarkably well so far.

At the same time, at the national level, the necessary health and safety measures to protect the workforce from exposure to COVID-19 have affected the availability of farm labour and the livelihoods of seasonal farm workers. It has also led to reduced productivity in food processing and distribution plants, or even meat processing plant closures (including due to outbreaks of illness at facilities and the measures necessary to enable re-opening). Processing plant closures in some countries in turn have caused important backlogs on farms, with serious implications for the management of ongoing harvests, production, and animal welfare. Equally, processing restrictions will eventually impact the availability of products to consumers. Further issues in food availability have resulted from the closure of hotels and restaurants, which are an important source of food donations to food banks, reducing supply to these emergency food providers at a time when demand is increasing as people suffer loss of incomes. These tensions in some domestic food systems warrant rapid attention now and examination into vulnerabilities and choke-points to avoid similar problems in the future.

For international food trade, food safety and certification checks and new biosecurity arrangements are increasing costs and time at borders. Transport and logistics have been slower and are more expensive due to a reduction in available drivers, the reduction in international air cargo and unforeseen port closures. Despite these disruptions, global food availability to date remains high: for example, there are currently ample supplies of staple crops, with cereal stocks predicted to reach record highs.

Effective responses to COVID-19 should first ensure that global food systems remain open and operational, so that food can move to where it is needed. This task cannot be achieved by any country acting alone: international co-operation is essential. This in turn implies increased transparency and information sharing across governments – information sharing on markets, on policies, and on possible future actions. Co-operative solutions will help avoid policy mistakes that will make a bad situation worse. In particular, experience with the 2007-08 food price crisis showed that export restrictions should be avoided: they create volatility in regional and global markets, penalise domestic producers, and are ultimately self-defeating. In the context of COVID-19, some countries have introduced export restrictions on agrifood products or inputs; however, a number of these have subsequently been removed and there have been no significant impacts on markets to date. Practical measures are also needed to speed up border procedures and increase border agency cooperation in risk management to ensure the smooth functioning of global supply chains.

Even before the COVID-19 outbreak, more than 800 million people worldwide were undernourished as poverty, conflict and civil unrest undermined their access to food. COVID 19–related production shocks and increased poverty could have serious implications for food security particularly in many low income countries. In OECD countries, vulnerable populations may also struggle with access to food because of reduced incomes and mobility. According to the UN World Food Programme, COVID-19 risks increasing the number of people facing acute hunger from 135 million to 265 million, unless urgent action is taken. International cooperation is thus needed to avert a humanitarian crisis.2

The persistent problem of undernourishment underlines the fact that food production and trade are necessary but not sufficient to achieve food and nutrition security. The long-term, sustainable response requires further action to tackle poverty and, in a number of countries, conflict resolution; in the shorter-term, well-functioning social safety nets are needed to ensure that the most vulnerable in society have access to food. Since the COVID-19 pandemic began, OECD countries have been implementing a range of policies to ensure food can get to consumers, and in particular the most vulnerable groups such as low-income households, people with health conditions, and elderly citizens. In some cases, this has meant making sure that food is available where consumers are by alleviating supply chain bottlenecks and arranging the delivery of food parcels to the vulnerable. In other cases, it has meant providing financial safety nets so consumers can maintain access to food. For example, countries have been providing additional funding for existing food assistance programmes including for food banks, as well as extra money during school closures (including via electronic vouchers) for families of children who usually benefit from free or discounted meals at school. Some OECD countries have also temporarily loosened eligibility requirements for receiving domestic food assistance.

Impacts of measures to contain the virus ripple through economies, affecting livelihoods all along the food chain. These impacts are likely to hit farmers especially hard in regions where food production systems are more labour intensive (and hence more vulnerable to the reduced availability of farm labour) and where there may be less institutional capacity to cope with the health and subsequent economic shocks. Farmers in both developing and developed countries may also have lower off-farm income due to the pandemic.

In the short run, the disruptions caused by COVID-19 have led to supply surpluses in some cases, and the dumping of perishable products. Huge reductions in demand from the food service sector have created challenges for food producers and processors. Pivoting towards supplying food retail is not always straightforward, as food destined for the food service sector is sold in much larger quantities and package sizes. Labour shortages from travel bans have also meant that some farmers have been unable to harvest labour intensive fruits and vegetable crops. Closure of meat processing plants in the United States, Brazil, and Europe due to COVID-19 infections amongst employees have led to animals being euthanised as the supply chain has backed up. Cool storage capacity is also under increasing pressure.

Over the medium-to-longer term, shifts in consumer demand due to confinement measures may have sustained effects on patterns of food consumption. Reducing human contact will be high priority for consumers, who are likely to increasingly use click and collect, meal delivery, drive through, or curb-side delivery options. Even with the gradual relaxing of social distancing restrictions, there will likely be a sustained reduction in demand from food service providers, compounded by the negative impacts of travel restrictions on tourism and the cancellation of large sporting and cultural events. Demand for high value, specialised agricultural and fisheries products is also likely to remain depressed, as consumers reduce their household spending. These shifts in consumer demand will require many actors along the food supply chain to adapt or reinvent their business models, and some may never recover.

A first challenge will thus be to provide necessary short-term support to affected producers in a way that ensures that basic productive capacity is not lost. But a second, equally important challenge is to avoid temporary measures to support livelihoods becoming entrenched, preventing the necessary adjustments and reducing long-term resilience of global food systems. Countries should assist actors along the food chain to deal with the short and medium term challenges without jeopardising long term policy goals. For example, many countries are providing regular information to farmers, food processors and food retailers about best practices to protect health and safety of workers, as well as timely data about consumer purchasing trends. Some countries have implemented policies to support marketing activities by agri-food businesses, including website design, development of e-sales/marketing and on-line activities. Granting flexibilities on deadlines for applying for subsidy payments and providing information for cross-compliance payments can help reduce financial insecurity for farmers. Waiving licensing requirements to enable restaurants to operate takeaway businesses can provide opportunities for firms to develop alternative income sources by responding to shifts in consumer demand. These types of interventions allow firms to adapt flexibly to changing conditions and constraints.3

Given the urgency to address the COVID-19 public health crisis, there is a risk that environmental policies are weakened or abandoned. But this would be a costly mistake. Global food systems generate significant environmental pressures, both in local ecosystems (such as water pollution caused by excessive fertiliser use) and at the global level (notably through their contribution to climate change). As noted above, agricultural production accounts for 11% of GHG emissions; once associated deforestation and other land use changes are factored in, this rises to an estimated 16-27% of total anthropogenic GHG emissions. All other inputs to and stages of food systems (such as energy, transport, processing, etc.) contribute an additional 5%-10%.4 Agriculture also accounts for the vast majority of global water use, and uses up to half of the world’s ice-free land surface, far more than any other human activity. Land use change caused by expanding agricultural activity is also a major threat to biodiversity. Environmental sustainability is important in its own right, but it is also in the long-term interests of producers in global food systems, as climate shocks and climate-related disasters pose challenges to the sector’s resilience and create vulnerabilities, which are set to eclipse those of COVID-19.5

Over the coming decades, as the world’s population becomes more numerous and potentially more prosperous, additional demand for food is expected to put even more pressure on the environment. This requires moving beyond business as usual to action to reform agricultural policies, which will be important, in combination with efficiency gains, in limiting the environmental impact of global food systems. Poor policy choices stimulate inefficient input use, as when water for irrigation is delivered free of charge; many existing agricultural support policies exacerbate the environmental impact of agriculture; and agriculture has generally been exempt from efforts to mitigate climate change. Moreover, productivity growth rates have fallen and remain well below potential in many countries, in part due to reduced public investments in agricultural R&D in high-income countries. While progress has been made in several dimensions of agricultural sustainability, environmental pressures remain high.

While COVID-19 presents immediate challenges for food systems, efforts to invest in their resilience going forward should not only take account of the wide range of risks faced by the sector, but also the need to invest in making the sector more sustainable. This includes taking the opportunity to reform existing policies that jeopardise sustainability and reduce resilience; to revisit current resilience toolkits for farmers faced with shocks to ensure they promote sustainable practices going forward; and ensure that global food systems are able to produce food where it can be done most efficiently and with the least damaging environmental impact. Action now should reinforce, and not distract policy makers from, the urgent task of investing in the long-term sustainability of global food systems.

There is an opportunity today to reinvigorate reform ambitions. As result of the COVID-19 crisis, governments have the opportunity to pursue progressive agendas in global food systems. Ending inefficient and environmentally harmful support would free up resources for investments to address the triple challenge more effectively. By adopting a policy package that includes investments in technological development and regulatory reform, governments can create conditions supporting productive, sustainable and resilient food systems able to withstand future shocks. The unanticipated shock of COVID-19 underscores the urgency of a shift from ‘business as usual’ policies to a more forward looking policy package for global food systems.

Notes

← 1. See OECD Policy Brief, Measuring Distortions in International Markets: The Agriculture Sector, June 2019, https://issuu.com/oecd.publishing/docs/measuring_distortions_in_internatio.

← 2. See World Food Programme, 21 April 2020, “COVID-19 will double number of people facing food crises unless swift action is taken”, https://www.wfp.org/news/covid-19-will-double-number-people-facing-food-crises-unless-swift-action-taken.

← 3. Measures taken by governments in response to COVID-19 are described in more detail in Agricultural Policy Monitoring and Evaluation 2020 (OECD Publications, forthcoming).

← 4. IPCC (2019), Climate Change and Land An IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial Ecosystems - Summary for Policymakers, Intergovernmental Panel on Climate Change, https://www.ipcc.ch/site/assets/uploads/2019/08/4.-SPM_Approved_Microsite_FINAL.pdf.

← 5. See OECD (2020), “From Containment to Recovery: Environmental Responses to the COVID-19 Pandemic”, OECD Policy Responses to Coronavirus (Covid-19), 20 April 2020, http://www.oecd.org/coronavirus/policy-responses/from-containment-to-recovery-environmental-responses-to-the-covid-19-pandemic-92c49c5c/.

Disclaimer

This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD member countries.

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

© OECD 2020

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions.