Foreseeing an Agrarian Crisis: Corona Epidemic

The Global Concerns on Agriculture and Food Security 

2019 was the year when the world woke up to the real Climate Change, accelerating sea level rise and melting ice. While we are on our way   to attend to   the urgencies of the   climate change challenges and offering recommendations, 2020 greets us with the global outbreak of China’s Corona virus. The Corona Virus outbreaks are just gaping at the possibility of Agriculture’s vulnerability due to its dependency to China. The novel coronavirus pneumonia (Covid-19) outbreak that began in Wuhan, in Hubei province, China has quickly spread to at least 75 other countries, causing more than 3,000 deaths. In a month's time, the deadly virus has turned the world upside down. 

It has the farmers, the   industry and agribusiness bankers worried, dairy sector in trouble lamb, wool and mutton markets and the crop sector on alert. This leaves us all worried about the rise in prices in each sector sue to restrictions in transport and and also the triggered hoarding of food and other essentials. Global outbreaks like Ebola, Sars and Mers all had negative impacts on food and nutrition security – particularly for vulnerable populations including children, women, the elderly, and the poor. When  Ebola began to hit Guinea, Liberia, and Sierra Leone in 2014, domestic rice prices increased by over 30 per cent; the price of cassava, a major staple in Liberia, shot up   by 150 per cent. In 2003, the SARS outbreak triggered food market panics in Chinese cities of Guangdong and Zhejiang. (The Telegraph).

China contributes 18.67 percent to the World GDP according to reports of 2018. China is deeply involved in   global trade through trade agreements spanning globally. This involvement and shutting down of industries definitely have us think about the   impact of the new coronavirus epidemic on the agriculture supply and demand side. We were also thinking whether it could have any large term effects on Agriculture and   Food industry markets and ultimately land in the surge of prices. 

China Daily reports that the evolution of the epidemic during the coming days and weeks will be crucial, and its impact on the economy or the agriculture sector will very much depend on the time needed to stop the spread of the deadly virus. (China Daily)Assessing the impact on the agriculture sector is therefore premature and only speculative at this stage. 

China being the first country affected by COVID -19,they put out serious measures to counter such adverse effects in rural areas reports China Daily. The Ministry of Agriculture and Rural Affairs (MARA) has taken a series of measures to ease the pressure on small businesses, while contributing to the national effort of halting the inter-human transmission. On 27 January, the Ministry of Agriculture and Rural Affairs and the Ministry of Human Resources and Social Security and National Health Commission issued a joint information note to farmers for prevention and control of the virus in rural areas. Recognizing the importance of ensuring the supply of food in good quantity and quality during the emergency period, MARA also issued on 30 January 2020 a notice to support and guarantee winter and spring food production during the epidemic period and beyond. 

The Australian cropping sector is watching anxiously to see whether the coronavirus will curtail the availability of critical crop protection products. China is the major producer of both ready-made pesticides and the active ingredients that form the base of products formulated in Australia. Western Australian barley growers will likely be the hardest hit in the country as a result of coronavirus, according to a report from the Australian Export Grain Innovation Centre (AEGIC) Agriculture Industry in India will be affected at later stages because we depend on China for imports. We get to hear from sources that some industries have now started sourcing products from other countries to continue their manufacturing without interruptions. 

Raju Kapoor, VP, FMC in an interaction with Agriculture World says that   their production in China has been hit due to lack of labour. It is difficult sourcing to procure substitutes, but even if it is a little costly they have started sourcing products from other countries to continue their manufacturing. If there is a glut in their products   then the farmers will have difficult times later. 

Satish Tiwari, GM, Coromandel International Ltd says “The gap in the supply of raw materials can create problems, but Coromandel being a technical manufacturing place, they aren’t affected as much but definitely it will have a jolt in the Agriculture Industry. He continues to say that the situation will remain normal because Rabi Season is over and there isn’t much activities in Summer, but if a similar situation continues in April the Kharif Crop might get affected .The prices of Inputs will go high and the ultimate product which hands in the consumers too will be highly priced. But ultimately the farmer is the sufferer here, what more than an agrarian  crisis at the time of Corona too. 

An update from the Ministry of Agriculture, Nature and Food Quality (LNV), who are involved in the crisis measures surrounding the Coronavirus informs on the situations happening in and around countries like Italy, Denmark, Norway, Sweden, Saudi Arabia, Hungary, Poland, India, Romania and Kenya. 

In Italy, we could see the Crisis in the dairy sector due to surplus due to drastically reduced sales due to closure of catering, school restaurants and hotels (-25%). We could see falling milk prices due to over production. Surplus meat production from the dairy farming sector was also reported. Reports say that the processing industry has been requested to use nationally available milk and rennet instead of imports drastic decline in international orders for fruit and vegetables and logistical problems in transport due to delays at borders. 

In France , The Minister of Agriculture and Food and Minister of Economic and Financial Affairs reports that there are no shortages to food after having met the with representatives of the food industry, supermarket chains and retail.  

As fears of lock down is in the news, Citizens continue to stockpile perishable food globally.. In Hungary also Demand has increased, online shops and home delivery have started to limit individual purchases. According to reports The Hungarian agriculture and food industry could soon be affected by the pandemic both directly and indirectly. Globalised production chains will be disrupted and Hungarian agricultural industries are vulnerable as they depend on chemical components produced in China. Disruptions in production chains will also lead to shocks in demand for exported agricultural products. In Poland the Border remains open for movement of goods (including food products) - both exports and imports. We never know when they will be closed. 

We tried to contact various sources in industry but the Expert’s opinions on this matter remain very cautious and the only certainty is that nothing is certain at the moment. Restrictions are necessary to limit the spread of a disease and they often lead to disruptions in the market chains and trade of agriculture products. They often bring hard hitting Impacts on the populations that depend on them for their livelihoods and nutrition security.