COVID-19 Update: June 10, 2020

The World Health Organization (WHO) Director-General, Dr. Tedros Adhanom, highlighted the importance of food safety, especially in times of crisis, during the opening remarks at the media briefing on COVID-19 of June 8. Dr. Tedros also stated that “the WHO works together with the Food and Agriculture Organization of the United Nations (FAO) in ensuring all people have access to safe, nutritious food for healthy living”.

The Organization for Economic Co-operation and Development (OECD) issued, on June 5, the Policy Response titled Building Back Better: A Sustainable, Resilient Recovery after COVID-19. This document states that environmentally destructive investment patterns and activities must be avoided to ensure a durable and resilient economic recovery from the COVID-19 crisis. Mitigation policies also need to trigger investment and behavioral changes that will reduce the likelihood of future shocks and increase society’s resilience when they occur.

The key dimensions for ‘Building Back Better’ are the need for a people-centered recovery that focuses on well-being, improves inclusiveness, and reduces inequality, as the central dimension. The remaining dimensions are (1) aligning recovery measures with long-term objectives for reducing GHG emissions, (2) strengthening resilience to the impacts of climate change, (3) integrating more ambitious policies to halt and reverse biodiversity loss and restore ecosystem services, including nature-based solutions, (4) fostering innovation that builds on enduring behavior changes, and (5) improving resilience of supply chains, through increased adherence to circular economy principles.

In the International Monetary Fund (IMF) press briefing of June 4, Mr. Gerry Rice, Director of Communications, stated that the IMF recently doubled access to emergency facilities, providing about $100 billion in financing. Among the measures implemented by the IMF, the Debt Suspension Initiative provided debt suspensions for the 35 countries, which have made formal requests, out of 73 eligible low-income countries. Mr. Rice also said: “We have provided immediate debt relief to 27 of our poorest member countries. In addition, we've established a new Short-Term Liquidity Line to further strengthen the global financial safety net, and of course, we've been leveraging our lending toolkit as I mentioned”.

According to a post on the IMF Blog, most of the vulnerable countries are located in sub-Saharan Africa. Food security in these countries is under threat, as the ability of many Africans to access sufficient, safe, and nutritious food has been disrupted by natural disasters and epidemics. In addition to this, due to the COVID-19 pandemic, in some Eastern African countries, over 70% of the population has problems accessing food. In order to reduce risks to food security, countries need to prioritize policies as part of fiscal stimulus packages to counter the pandemic, such as increasing agricultural output and strengthening the ability of households to withstand shock. These measures would have the added benefit of reducing inequalities while boosting economic growth and jobs.

On May 28, China issued a 4 trillion yuan ($559 billion) rescue package to save jobs and livelihoods, the largest economic rescue plan in its history, according to South China Morning Post. This rescue plan consists of combined cuts in business costs, tax exemptions, lower bank interest rates, waived contributions to social welfare funds, as well as reduced prices for utilities, among other measures.

On May 27, the European Commission (EC) presented a major recovery plan to face the consequences of the COVID-19 pandemic, called Next Generation EU. This plan consists of extraordinary funding of €750 billion to be invested across three pillars: a new recovery and resilience facility of €560 billion which will be allocated to Member States with a mix of loans and grants (45/55%); a new Solvency Support Instrument with a budget to support private companies; and a third pillar, called ‘Addressing the lessons of the crisis’, that includes a new health program, EU4Health, to strengthen health security and prepare for future health crises.

In addition to this, on June 8, the EU Council approved the ‘Team Europe’ global response to COVID-19, which mobilized almost €36 billion to address the devastating effects of the pandemic to the EU partner countries which are most in need. Some of these countries are located in North Africa, the Middle East, Asia, Latin America, and the Caribbean.

Regarding official controls, the EC published the Commission Implementing Regulation (EU) 2020/714 of 28 May 2020, which extends the use of electronic documentation for the performance of official controls and other official activities, among other measures. The current measures, which were expected to expire on June 1, have been extended until August 1.

The European Council President and the Japanese Prime Minister held a bilateral meeting on May 26. They recognized that global solidarity, cooperation, and effective multilateralism are required to defeat the virus as well as to ensure economic recovery. They also confirmed that both parties are applying measures to mitigate the social and economic consequences of the pandemic. The commitment to continue tackling global challenges together based upon the close and strong Japan-EU relations was reaffirmed.  

According to a recent USDA GAIN Report, the tourism and hospitality industries have been significantly impacted as a result of COVID-19 restriction measures in both the near and the long term. Despite the policies for the recovery of these sectors implemented by the government, many small and medium-size companies may go out of business. First estimations are more than $3.4 billion loss in the tourism and food service sectors due to the pandemic restrictions. The state of emergency was declared on March 12 and ended on May 24. The impact of the state of emergency restrictions on tourism and food service is the closure of 75% of restaurants for 72 days (from March 14 to May 24), 95% of hotels closed, and all congresses, commercial, sport, cultural and social events canceled, among others.

The Association Nationale des Industries Alimentaires (ANIA) recently reported a 22% drop in turnover in the French food industry. In addition to this, more than 70% of companies reported a significant decrease in turnover during the COVID-19 confinement period compared to the usual activity.

Italy reopened its borders on June 3, and cancelled the 14-day mandatory quarantine to EU citizens. In addition to this, movement across Italian regions is also allowed. Bars, restaurants, stores and most of the monuments have reopened, followed from June 15 by movie theaters and show venues.

Spain is progressively de-escalating COVID-19 mitigation measures, which are expected to end, in most regions, by June 21 –the same day that the state of alarm is expected to stop. However, according to a draft decree, face masks will still be mandatory after the de-escalation process and until the government declares the coronavirus crisis to be completely over.

Amid the de-escalation process, the Spanish Prime Minister announced an unprecedented effort to supply the country’s regions with a €16 billion fund to be spent on health and education in the recovery of the COVID-19 crisis. Another extraordinary measure recently announced is the guaranteed minimum income scheme, which will reach 255,000 people who lost incomes during the pandemic.

The Government of India announced a COVID-19 economic relief package of INR 20 trillion ($263 billion) for self-reliant India food and agriculture items, according to a recent USDA GAIN Report. This package is equivalent to almost 10% of India’s Gross Domestic Product (GPD) and includes long-term measures to address some critical infrastructure gaps and strengthen credit supplies, among other policy reforms to help Indian farmers.

According to the latest Indian Port Situation Update Report, truck movement and dry cargo operations are slow at Jawaharlal Nehru Port Trust (JNPT). Tuticorin, Chennai, Mangalore and Cochin ports report slow truck movement because of lack of drivers or shortage of labor. Some customs officials in Mumbai and Kolkata ports have been reported positive for COVID-19, and therefore, port capacity may be lower.

Regarding food and retail, the USDA GAIN Report issued on June 1 states that, in Mumbai, a growing number of shop owners are shutting down operations and staying home or returning to their native states. These shops are finding it increasingly difficult to operate due to the exodus of laborers and rising financial losses. For many of these shop owners, continued lockdown extensions are making their businesses unviable and they feel that returning to their native homes is a safer option.

According to a USDA GAIN Report published on June 1, hotel, restaurant, and institutional sales fell to unprecedented lows in April. The main reasons for this decrease in sales are that consumers stayed at home and tourism halted during the state of emergency, which ended on May 25. However, supermarket sales were superior compared to a regular month.

South Africa entered into level 3 lockdown on June 1, allowing most people to return to work, the opening of restaurants for delivery of food, and the allowance of inter-provincial travel for workers, among other de-escalation measures. Despite the relaxing of lockdown measures, delays at Cape Town’s harbor have been recently reported, as workers are being sent home. A recent surge in COVID-19 cases caused delays as well as a decrease in container terminal operation, which on May 4, ran at 40% of capacity.

According to a USDA GAIN Report, the South African Department of Agriculture, Land Reform and Rural Development will provide funding for small and communal farmers. The total funding is R1.2 billion ($ 64 million) and a part of it will go towards vouchers for inputs in priority sectors, such as fertilizers, pesticides and herbicides.

The overall agricultural imports to Taiwan in 2020 may dampen because of the COVID-19 pandemic and its effects, stated a recent USDA GAIN Report. However, “Taiwan will remain one of the most reliable export destinations for U.S. food processing ingredients”. According to the USDA, products with significant sales potential include tree nuts and dried fruits.

The U.S. Centers for Disease Control and Prevention (CDC) have issued detailed Guidelines for the phased reopening of catering establishments. This document briefly summarizes CDC’s initiatives, activities, and tools in support of the Whole-of-Government response to COVID-19.

Due to the effects of the COVID-19 pandemic, the U.S. Department of Agriculture (USDA) revised downwards its export and import forecast for the 2020 financial year. According to a report released by the Economic Research Service and Foreign Agricultural Service, the projected agricultural exports decreased $3.0 billion and imports are projected $2.3 billion below the February forecast.

The USDA issued the first Coronavirus Food Assistance Program Payments on June 4. The USDA Farm Service Agency (FSA) approved more than $545 million in payments to producers who have applied for this program. FSA began taking applications May 26, and the agency has received over 86,000 applications. In the first six days of the application period, FSA already made payments to more than 35,000 producers. 

The USDA Foreign Agricultural Service postponed its scheduled 2020 trade missions to North Africa, Philippines, Spain, Portugal, and the United Kingdom due to continued health concerns and travel restrictions related to the COVID-19 pandemic. The mission to Spain and Portugal was originally scheduled for June 8-11 and the UK mission for September 14-17.