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Agricultural Trade & Policy Responses During the First Wave of the COVID

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Agricultural Trade & Policy Responses During the First Wave of the COVID AGRICULTURAL TRADE & POLICY RESPONSES DURING THE FIRST WAVE OF THE COVID-19 PANDEMIC IN 2020 AGRICULTURAL TRADE & POLICY RESPONSES DURING THE FIRST WAVE OF THE COVID-19 PANDEMIC IN 2020 Food and Agriculture Organization of the United Nations Rome, 2021 Required citation: FAO. 2021. Agricultural trade & policy responses during the first wave of the COVID-19 pandemic in 2020. Rome. The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. ISBN 978-92-5-134366-1 © FAO, 2021 Some rights reserved. This work is made available under the Creative Commons Attribution- NonCommercial-ShareAlike 3.0 IGO licence (CC BY-NC-SA 3.0 IGO; https://creativecommons.org/licenses/by-nc-sa/3.0/igo/legalcode). Under the terms of this licence, this work may be copied, redistributed and adapted for non-commercial purposes, provided that the work is appropriately cited. In any use of this work, there should be no suggestion that FAO endorses any specific organization, products or services. The use of the FAO logo is not permitted. If the work is adapted, then it must be licensed under the same or equivalent Creative Commons licence. If a translation of this work is created, it must include the following disclaimer along with the required citation: “This translation was not created by the Food and Agriculture Organization of the United Nations (FAO). FAO is not responsible for the content or accuracy of this translation. The original English edition shall be the authoritative edition.” Disputes arising under the licence that cannot be settled amicably will be resolved by mediation and arbitration as described in Article 8 of the licence except as otherwise provided herein. The applicable mediation rules will be the mediation rules of the World Intellectual Property Organization http://www.wipo.int/amc/en/mediation/rules and any arbitration will be conducted in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). Third-party materials. 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Cover photo credits: clockwise ©iStock/Suprabhat Dutta, CasarsaGuru and Smartin69 CONTENTS ACKNOWLEDGEMENTS iv ACRONYMS & ABBREVIATIONS v EXECUTIVE SUMMARY vii METHODOLOGY ix CHAPTER 1 - COVID-19 effects on agricultural trade 1 1.1 Decline and recovery of imports and exports 4 1.2 Impacts across countries and commodity markets 10 1.3 Impacts on the diversity of trade 13 CHAPTER 2 - Agricultural trade and related policy responses to COVID-19 17 2.1 Trade-restricting measures 18 2.2 Lowering of import restrictions and advances in trade facilitating practices 21 2.3 Domestic measures 23 CHAPTER 3 - Commodity-specific overview of market conditions and policy responses 29 3.1 Cereals (wheat, maize, rice) 29 3.2 Meat and dairy 37 3.3 Vegetable oils 39 3.4 Fruits and vegetables 41 CONCLUDING REMARKS & MEDIUM-TERM RISKS FOR FOOD SECURITY 43 BIBLIOGRAPHY 47 Works cited 48 Joint ministerial statements and declarations 55 Policy measures 57 TECHNICAL ANNEX 77 iii ACKNOWLEDGEMENTS This study was prepared by Cosimo Avesani, Ishrat Gadhok and Andrea Zimmermann, Economists in the Markets and Trade Division (EST) of the Food and Agriculture Organization of the United Nations (FAO). The data analysis was provided by Yaghoob Jafari and Helena Engemann (University of Bonn) and Husam Attaallah (FAO). Support in policy monitoring and reporting was provided by FAO staff members Sabine Altendorf, Marco Artavia Oreamuno, Upali Galketi Aratchilage, Evelyne van Heck, Fabio Palmeri, and Monika Tothova. The authors are grateful to FAO staff members Erin Collier, Edona Dervisholli, Upali Galketi Aratchilage, Lavinia Lucarelli, Georgios Mermigkas, Shirley Mustafa, George Rapsomanikis and Peter Thoenes for their review and valuable comments. The authors are also grateful to Jonathan Hallo and Ettore Vecchione for the report design, and to Araceli Cardenas for production support. Finally, the authors are thankful to Boubaker Ben-Belhassen, Director of the Markets and Trade Division, FAO, for his overall guidance and support. iv ACRONYMS & ABBREVIATIONS AoA WTO Agreement on Agriculture APEC Asia-Pacific Economic Cooperation ASEAN Association of Southeast Asian Nations ASF African swine fever CEFTA Central European Free Trade Area COVID-19 Coronavirus disease 2019 EAEU Eurasian Economic Union FAO Food and Agriculture Organization of the United Nations FAPDA Food and Agriculture Policy Decision Analysis FAW Fall Armyworm FPMA Food Price Monitoring and Analysis IFPRI International Food Policy Research Institute ILO International Labour Organization IMF International Monetary Fund IPPC International Plant Protection Convention ITC Macmap International Trade Centre Market Access Map ITFC International Islamic Trade Finance Corporation NFIDC Net food-importing developing country SPS Sanitary and phytosanitary SIDS Small Island Developing States SEED Systematic Electronic Exchange of Data for Customs Administrations TRQs Tariff rate quotas TBT Technical barriers to trade UNDP United Nations Development Programme UNSD United Nations Statistics Division WTO World Trade Organization v EXECUTIVE SUMMARY The Coronavirus disease 2019 (COVID-19) pandemic has had unprecedented effects on all dimensions of human life. The full economic and social impacts are still unfolding, as the disease continues to spread in all regions around the world. On top of the death toll and overstretched health systems, the virus and the measures to contain its spread have caused a deep global economic recession and increased extreme poverty and acute and chronic food insecurity. Concerning agricultural markets, COVID-19 has resulted in a dual shock affecting both supply and demand. Measures to control the spread of the disease have affected many supply chain related activities, including production, processing, logistics, and retailing. Border and travel restrictions have often led to shortages in agricultural labour; limited access to inputs such as seeds, fertilizers and pesticides; lower capacity in the food processing industry; and challenges in the distribution of food products. At the same time, significant reductions in income, restrictions on the movement of people and the closure of restaurants and food services induced rapid changes in food consumption patterns. Despite these shocks, however, the efforts of governments and agricultural sector stakeholders worldwide to keep agricultural markets open and trade in food flowing smoothly have contributed to remarkably resilient agricultural commodity markets. Overall, effects on global trade in food and agriculture remained limited to short-term disruptions at the very beginning of the pandemic. While disruptions of global trade in basic foods such as cereals, oilseeds, fruits and vegetables were minimal, trade in products affected by shifts in consumption patterns (e.g. beverages and fish) and non-food commodities (e.g. cotton, live plants and cut flowers) declined more sharply during the first months of the COVID-19 outbreak. The pandemic and its potential effects on agricultural value chains and the global trading system induced concerns over food security and food safety worldwide, leading countries to implement policy measures to curb potentially adverse impacts on their domestic markets. These policy responses covered a wide range of measures, including export restrictions, lowering of import barriers, and domestic measures. Most of the trade restricting measures were short-lived. Some major exporting countries imposed export bans or quotas on specific commodities. A few countries imposed import restrictions or introduced requirements for certificates attesting negative COVID-19 test results for the shipments. In most cases, such measures were temporary in their application. Trade restricting measures can alter the balance between global food supply and demand, with harmful effects on both exporters and importers. In order to avert the pandemic causing a global food crisis, it is crucial to keep markets open, trade flowing smoothly and supply chains functioning properly. The international community played an important role in limiting the use of trade restricting measures during the pandemic. Through several joint ministerial declarations and statements, many countries made non-binding commitments to
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