فيروس كورونا المستجد (كوفيد-١٩)
Policy responses

Governments can adopt urgent enabling policies to support production entities. In particular, temporary input subsidies can be considered, targeted to regions and value chains most affected by the outbreak. It is essential that support is provided in time for the forthcoming spring planting season.

Agricultural enterprises need financial support to avoid credit depletion and avoid financing costs of keeping business afloat. Governments could increase access to low-cost credit with favorable repayment terms for agribusiness enterprises. The government could mitigate the burden on farming enterprises by reducing or delaying their tax and social insurance premiums. For example, in Australia, tax policy as been temporarily changed to allow larger depreciation write-offs and dedcutions and offered tax-free wage booster. Similar fiscal stimuli could apply for electricity (agro-processing, such as cotton) and other costs.

Agricultural extension should be re-oriented towards areas and value chains in which production is most affected by the outbreak. Where possible, governments should accelerate the introduction of digital tools to provide technical assistance to farmers from distance.

Based on the experience from Wuhan, governments can set up so-called "green channels" to connect production areas with urban outbreak hotspots, removing logistical barriers & restrictions to accelerate the delivery of perishable (and nutritious) foods to affected populations.

Links and references

FAO (2016). Impact of the Ebola Outbreak on Market Chains and Trade of Agricultural Products in West Africa. http://www.fao.org/3/a-i5641e.pdf
IFPRI (2020). How China can address threats to food and nutrition security from the coronavirus outbreak. https://www.ifpri.org/blog/how-china-can-address-threats-food-and-nutrition-security-coronavirus-outbreak
Hu, Y. (2003, 7 3). To what degree SARS affects agriculture, farmers and rural areas. Retrieved from China.com.cn: http://www.china.com.cn/chinese/EC-c/358907.htm
https://news.bloombergtax.com/daily-tax-report/greece-moves-to-help-business-in-coronavirus-affected-areas; https://www.smartcompany.com.au/finance/tax/coronavirus-tax-relief-ato/; https://www.farmweekly.com.au/story/6684222/ag-tempted-but-not-rushing-to-spend-canberras-stimulus-cash-splash/?cs=5150
https://www.aa.com.tr/en/economy/african-leaders-discuss-digitalization-of-agriculture/1515794; https://www.agrilinks.org/post/policy-imperatives-digitalized-agricultural-extension
https://www.lequotidien.lu/politique-societe/le-luxembourg-attend-61-millions-masques-de-protection/ (Luxembourg delays)
https://www.cnbc.com/2020/03/19/as-the-coronavirus-arrives-in-africa-fragile-economies-are-bracing-for-the-worst.html (fiscal and monetary policy response in Africa)
https://www.ft.com/content/cafb828e-6423-11ea-b3f3-fe4680ea68b5 (china and labour intensive)
https://www.cnbc.com/2020/03/17/south-africa-declares-state-of-disaster-as-coronavirus-arrives.html (fiscal space South Africa)
http://www.fao.org/3/ca4887en/ca4887en.pdf (FAO digital ag.)
https://www.reuters.com/article/us-health-coronavirus-china-farmers/chinese-farmers-dodge-coronavirus-and-go-online-for-spring-seeds-and-supplies-idUSKBN20X17T (china ag. supplies online)
https://www.bloomberg.com/news/articles/2020-03-23/africa-needs-waiver-on-44-billion-interest-bill-to-combat-virus (debt waiver)
https://www.bloomberg.com/news/articles/2020-02-20/at-least-one-commodity-could-benefit-from-coronavirus-phosphate (Phosphate supply)
https://www.ghanaweb.com/GhanaHomePage/africa/Coronavirus-Ethiopia-seeks-debt-relief-for-Africa-902620 (Ethiopia emergency financing)

Pros Fiscal stimuli (targeting households and firms): Are likely to reduce the impact on the aggregate demand, thereby lowering the negative economic impacts of the covid. Reduction in economic disruption is likely to be higher if fiscal and monetary policies are coordinated. This is likely to reduce the number of people transitioning into poverty, the number of businesses going bankrupt and may minimize effects on unemployment. Temporary input subsidies: May reduce the effect on agricultural production and may prevent/reduce the likelihood of a food crisis in the next season. Note, however, that for labour-intensive crops, this may not be enough as the labour shock may still bring down production levels. May be most effective if combined with schemes that solve temporary labour shortages and/or if support is provided for crops that are not very labour intensive. Digital Agricultural extension: Minimizes contact between extension agents (who, if infected, could go on to infect a lot of people, and farmers who may also infect other farmers in FFS and similar extension arrangements). May reduce costs and be a structural break in terms of how extension is carried out. Reducing/eliminating logistical barriers: May allow farmers/consumers to access critical inputs/food items that will minimize the economic and social impacts of the outbreak.
Cons Current budgetary implications, fiscal space and finance availability: Not every country will have the fiscal space to allow for a comprehensive fiscal stimulus and/or to provide input subsidies. Even in middle-income countries, such as South Africa, there may limited fiscal space to do this. Kenya and Egypt have adopted some monetary policy measures, but they are likely to be insufficient. If crisis worsens in some countries, in the absence of additional external funding, Government will have to cut into core budgets. In some cases, debt may need to be incurred (in which case availability of funding will depend on country's debt rating. Inputs subsidies: For those inputs purchased internationally, there may be fourth issues. First, international restrictions may create uncertainty and delays in terms of the delivery time for the inputs (for example, in Luxembourg, health supplies were blocked by neighbouring countries causing delays. If this occurs for time sensitive inputs such as seeds and fertilizer, this can create additional problems). Second, there is already evidence that countries (e.g. China) may already be switching to less labour-intensive crops (e.g. rice). If this pattern materializes elsewhere and if countries all try to acquire seeds at the same time, global supply may not be enough to cover this increase in demand. In the case of fertilizer, for instance, according to Bloomberg, phosphate production from Hubei declined a lot, which may decrease the global supply of fertilizer. If there is no demand shock, this may become a problem. Third, for landlocked countries, if the goods cannot be transported by air, the situation may be especially serious. Fourth, in China people are switching to buying agricultural supplies online, but this may not be feasible in many developing countries. Fifth, the input subsidies will not solve labour shortages. Unless these services are provided by machines or there are schemes in place to mitigate these labour shortages, the impact may be lower than expected. Formal vs. informal economy: Fiscal stimuli for business are likely to work better for countries with large formal sectors and/or for businesses in the formal economy. For thoses businesses operating in the informal economy, a direct cash transfer is likely to work best. Future budgetary implications: Spending more now may reduce future capacity to spend, which may compromise Government's abilities to spend normally following the end of the outbreak. Digital Extension: A recent FAO report (section 3.1) has highlighted that a key issue is that most people in developing countries have access to phones, but that phones may not be enough for all types of ag. extension as some types will require more advanced infrmation technology. The other issue raised by a report on India is that extensionists often lack the skills to go digital, even when this may be technologically feasible. Removing/Reducing logistical barriers: May be complex logistically, especially if it requires cross-border trade.
Minimum conditions 1) Input supplies: Availability of inputs (either locally or internationally); fiscal space (if Government purchased); acceptable delays in receiving imported goods. 2.1) Fiscal stimuli to businesses: Way to identify businesses (e.g. tax returns, etc…); Fiscal space to implement these measures and/or capacity to contract additional debt to finance these expenditures 2.2) Fiscal stimuli (targeting households): Ways to identify recipients; Fiscal space to implement measures; Ideally, roll out the transfer with minimal human contact (i.e. avoid human contact in providing relief) and/or capacity to contract additional debt to finance these expenditures 3) Agricultural extension: Required ICT infrastructure (phone/ internet connection); Local capacity to deliver extension services remotely; Capacity to understand the message (if text message and low literacy rate, may be difficult) 4) Removal of logistical barriers: Coordination capacity between state/non-state agents to remove barriers; ability to identify areas most in need of removal of logistical barriers
Governance All mostly fall on central and/or local Governments. In the case of logistical barriers, this may also include transporters and traders.
Other Elements Fiscal space: In cases of countries that have no fiscal space, there may be a number of additional possibilities. One is donor funding. Ethiopia is apparently trying to secure emergency WB financing. Another solution that is apparently being considered is

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