Prepare Agriculture for the Next COVID-19

The recession that’s sweeping the globe is the worst crisis since the Great Depression. In just six months, a decade of progress made in poverty reduction was wiped out, with up to 115 million people slipping into extreme poverty. The ranks of the hungry are swelling, as the pandemic exacerbates inequality; nearly 130 million people could become chronically undernourished. Food systems, which directly employ 1.3 billion people, are about to lose more than 451 million jobs.

The food and agriculture sector have fared relatively well through the crisis, with the global supply chains holding up. Investment flows on wheat, maize, rice and soybean futures remain unaffected. Global food stocks for staple food are at an all-time high. Prices are likely to stay stable, if at higher levels.

But it’s not enough to slog along at the bottom of the recession in a U-shaped recovery. There will be more COVID-19s to come, and this is a rare opportunity to build resilience to manage risks. There are four accelerators: data (and big data), technology, innovation and the right complements (governance, institutions and human capital). Data, innovation and technology can transform the agri-food system; the complements can ensure the transformation is inclusive.

If donor countries spend an additional $14 billion annually between now and 2030 (twice as much as what they are spending now on food and nutrition aid), 500 million people could escape hunger. An additional investment of $25-$36 billion annually for the next decade could end hunger. Such investments would fund a mix of low-cost and high-impact interventions directly related to the four accelerators: agricultural R&D, agricultural extension services, digital agricultural information systems, small-scale irrigation expansion in Africa, female literacy training and scaling up of existing social protection programs and trade.

But investments alone aren’t enough. The COVID-19 pandemic is far from over. And food markets continue to face plenty of uncertainties, including weak growth prospects, unstable energy and currency markets, a resurgence of African swine fever and a catastrophic locust outbreak in Africa and Asia. Even though the number of countries curtailing exports of agricultural goods has come down from 22 to nil since April, trade tensions persist. Restrictions on movement continues to cause farm labor shortages and impede producers’ access to markets. Food processing facilities are running at lower capacity.

Over 120 countries and territories have limited access to their ports, leaving 300,000 seafarers stranded at sea. It poses risks to lives and global trade, especially in places like Argentina, Colombia, Peru and North African countries that rely on food imports. A dramatic drop in demand for high-value commodities will result in greater food losses and imperil livelihoods and food security of countless people.

We need to build resilience now, while making investments. Three interrelated actions can achieve this.

First, use trade to boost farmers’ productivity and income. Trade can increase producers’ access to markets. Exports can mitigate revenue losses. Imports can ramp up food availability to stabilize food prices locally, regionally and globally. Boosting trade among African countries is especially important, as many of them rely on commodity exports and food imports. To reduce non-tariff trade barriers, African countries have to improve food safety across the continent’s value chain — it’s the best way to prevent governments from imposing blanket import restrictions. The removal of non-tariff barriers will tremendously benefit Africa, because the region can make up for the slumping export demand from elsewhere, like Europe.

Second, link value chain infrastructure initiatives to financial systems. It’s obvious that improving infrastructure — better access to markets and airports; dry and cold storage facilities to prevent food loss — will facilitate trade and increase farmers’ ability to cope with price variability and other uncertainties. What is less obvious is the need to ensure that they are linked to financial systems to increase producers’ incomes and guarantee long-term returns for investors. Electronic warehouse receipts, for example, can allow producers to get paid for their deposits.

Third, use technology wisely. Robotics and big data were already being integrated into agriculture to keep pace with the demand for food. And the pandemic has accelerated the automation of agriculture. If anyone can take advantage of these precious resources most efficiently, it’s the smallholders. For example, no one needs innovative precision farming like smallholders do. Technology can be a force for development if governments make the effort to ensure that everyone benefits from it. This means making technology affordable and investing in institutions and human capital to minimize inequality. For instance, digital agriculture can help develop inclusive value chains to create living-wage jobs in rural areas, empowering women and young people, who have borne the brunt of the pandemic’s economic impact.

The International Monetary Fund warns of a “long, uneven and highly uncertain” recovery ahead. Through international cooperation, countries must find the needed resources. And they must implement policies to increase competitiveness, efficiency and reduction of food losses. These actions can move us toward a recovery that prepares us for the next shock.

This article originally appeared in Gaftaworld‘s November 2020 issue.

(Photo by Abbas Vanaee on Unsplash)