COVID-19 Update: May 28, 2020

The World Health Organization (WHO) adopted a landmark resolution for a global commitment to a COVID-19 response, co-sponsored by more than 130 countries, and adopted by consensus during the 73rd World Health Assembly of May 19. This resolution calls for the intensification of efforts to control the pandemic, and for equitable access to and fair distribution of all essential health technologies and products to combat the pandemic. In his closing remarks, the WHO Director-General, Dr. Tedros Adhanom, said “COVID-19 has robbed us of people we love. It’s robbed us of lives and livelihoods; it’s shaken the foundations of our world; it threatens to tear at the fabric of international cooperation. But it’s also reminded us that for all our differences, we are one human race, and we are stronger together.”

The Food and Agriculture Organization of the United Nations (FAO) issued the May update of the report “Addressing the impacts of COVID-19 in food crises”, stating that $360 million are needed to avert rising hunger. Because of the pandemic, food access and food availability could emerge as a serious concern, in both rural and urban areas. As the situation evolves, the risk of famine in some countries becomes a real concern. Therefore, in order to safeguard livelihood and increase access to food, anticipatory actions are urgently needed to prevent new or worsening food crises.
 
FAO will focus on four activities at the global, regional and country level, in order to ensure critical assistance to address the non-health impacts of COVID-19, (1) including a global data facility to support data collection and analysis, (2) stabilizing incomes and access to food as well as preserving ongoing livelihood and food production assistance, (3) ensuring continuity of the food supply chain, as well as (4) ensuring people along the food supply chain are not at risk of COVID-19 transmission.

On May 14, the Word Trade Organization (WTO) published a statement highlighting the importance of Micro, Small, and Medium-sized Enterprises (MSMES) in economies at all levels of development. To address the global crisis, a coordinated global response is required in order to stabilize economies and help MSMEs affected during the COVID-19 outbreak. Several WTO members addressed the challenges faced by workers and businesses, and the WTO will continue to monitor MSME-related developments and take further action if necessary, to help international trade and promote the stability of supply chains.

The EU adopted temporary support to mitigate unemployment risks in an emergency (SURE) to help workers keep their positions during the pandemic. The SURE scheme can provide loans of up to €100 billion under favorable terms to Member States in order to help the sudden and severe increases of national public expenditure.
 
On May 14, the second G20 Extraordinary Trade and Investment Ministers Meeting on COVID-19 took place. The necessity for a coordinated action among countries and regions for a coherent and lasting exit from the COVID-19 pandemic was noted by the Commissioner Phil Hogan. As a guide for a collective response, there are three issues to have in consideration: (1) the importance of affordable and reliable access to healthcare products, including tariff relief for COVID-19 related products, (2) enhance supply chains in different sectors, and (3) the urgent need for international rules on e-commerce at WTO level.
 
In the Eurogroup videoconference, held on May 15, Mr. Mário Centeno, president of the Eurogroup, summarized the EU three safety nets: (1) the support by the European Stability Mechanism (ESM) to EU Member States; (2) the SURE program for workers (described above); and (3) the European Investment Bank (EIB) Pan-European Guarantee. The Eurogroup also agreed on some key features of the Recovery Fund, as it must be temporary, targeted, commensurate with the extraordinary costs of the COVID-19 outbreak, and must ensure solidarity with the most affected Member States.
 
On May 15, the EU issued a guidance for the progressive resumption of tourism services and for health protocols in hospitality establishments to be followed when the restrictions on travel-related activities will be progressively lifted. The principles for the safe and gradual restoration of tourism activities that EU Member States need to follow include the need of low COVID-19 incidence, sufficient health system capacity, robust surveillance, testing capacity, contact tracing, coordination, and effective communication mechanisms.
 
In addition, the EU also published a guidelines on the progressive restoration of transport services and connectivity, due to the fact that the measures to contain the outbreak resulted in a dramatic reduction in transport activity. However, freight flows have been less affected than passenger transport. Furthermore, the EU commission issued a communication towards a phased and coordinated approach for restoring freedom of movement and lifting internal border controls, as eliminating the restrictions is essential for economic recovery.
 
The EU Parliament and the Council adopted, on May 18, the proposal of a €3 billion assistance package to support the neighboring countries Albania, Bosnia-Herzegovina, Georgia, Jordan, Kosovo, Moldova, Montenegro, Republic of North Macedonia, Tunisia and Ukraine to cover their immediate financing needs which have increased as a result of the COVID-19 outbreak.  Together with the support from the International Monetary Fund, the funds will help enhance stability and to allow resources to be allocated towards protecting citizens and to mitigating the negative socio-economic consequences of the coronavirus pandemic.
 
On May 20, the EU adopted COVID-19 transport measures, including temporary flexibility for licenses and port services, to help companies and authorities cope with the extraordinary circumstances created by the COVID-19 pandemic.
 
On May 25, the EU Council adopted temporary relief measures for aviation and railways, in order to support airlines and airports amid the sharp drop in air traffic due to the pandemic. An extension to the transposition deadline for rail safety and interoperability directives of the fourth railway passage was adopted, with the aim of giving rail industry and authorities flexibility and legal certainty under the current circumstances.

All restaurants in Austria have been closed since March 17 due to the COVID-19. This closure has severely impacted businesses despite the stay-at-home measures gradually being lifted. The government issued a €500 million aid package to gastronomy businesses to boost consumption, according to the USDA GAIN Report issued on May 15.
 
The Government of Austria also offered aid to the agriculture sector, in order to mitigate its financial losses, including a hardship fund, Corona aid fund and guarantees for agriculture and forestry, among other measures highlighted in the USDA GAIN Report issued on May 13.

Businesses are facing difficulties in order to adapt to different measures to mitigate the effects of the pandemic. Many German restaurants closed during the lockdown, and some others adopted new strategies which are summarized in a recent USDA GAIN Report. It is expected that VAT on food items will decrease from 19% to 7%, as well as other tax cuts for restaurants until June 2021.
 
Germany adopted some measures to mitigate the effects of the pandemic on the agri-food industry. Emergency aid for small enterprises and self-employed, suspension to file for insolvency until September 30, and a credit guarantee program, are some of the measures applied.

Italy announced that borders will reopen for EU tourists in early June, according to Euroactiv. The government seeks to restart economic activity, as well as tourism and hospitality, while applying necessary containment measures to avoid a second outbreak of the disease.

Despite lockdown measures are being relaxed in several Spanish provinces, there is a 14 day quarantine for international travelers entering into Spain until July 1. However, the Spanish government proposed the opening of travel routes before July 1 between the EU regions that have controlled the spread of the COVID-19, consequently, EU tourists might be able to travel to certain areas in Spain.
 
The state of alarm in Spain to combat the spread of the COVID-19 was implemented on March 14, and it has been extended 5 times since then, until June 7. A sixth 15-day extension may be agreed in the coming days, although it would not be applicable to all of the country, as certain regions might lift the alarm state and most of the restrictions.
 
From May 21, the use of face masks in closed and open public spaces is mandatory in Spain, in cases where it is not possible to maintain an interpersonal distance of two meters. The use of face masks has been compulsory in public transportation since May 4.

The Government has issued several measures, such as grants, credits or guarantees, in order to help companies. Regarding financial aid, employers with more than 20% turnover loss can apply for the Temporary Emergency Bridging Measure for Sustained Employment to receive up to 90% compensation of employees’ wages. Affected entrepreneurs that closed their company, or that face restrictions of meetings or traveling, are able to request a reimbursement of €4,000.
 
According to a recent USDA GAIN Report, the overall food retail sales have increased by 9% since the COVID-19 outbreak –consumers are increasingly buying more food in the supermarkets, or ordering food online instead of eating out.

The Queensland Government published its staged approach to the restart of freedom to travel, participate in activities and gatherings. The Economic Recovery Strategy includes the guiding principles to create and maintain jobs, such as building a more resilient and stronger economy, investing in productive infrastructure, and creating a confidence environment for business and investment.
 
The Roadmap to easing restrictions is gradual and provides sensible steps to a COVID-19 recovery with the aim to reconnect communities and keep the economy moving, by supporting business, industries and jobs.
 
The New South Wales Government is granting a pesticide training exemption since, in general, training and refresher courses are unavailable due to COVID-19 social distancing rules.

Canada provided pandemic support to the agri-food sector, including an emergency processing fund for food processors implementing health controls to protect plans workers, a disaster relief, and a surplus food purchase program to redistribute food surplus to food banks.

On May 20, during a meeting of the central leading group on responding to the COVID-19 outbreak, China called for stronger international cooperation on the pandemic response, and emphasized the importance of epidemic control and containment practices on business reopening, to accelerate consumption and production.
 
The President Xi Jinping statement, at the opening of the 73rd World Health Assembly of the WHO, stressed that economic and social development must be restored, following the WHO recommendations to contain the spread of the virus during the reopening of businesses and schools. The president also stressed the importance of strengthening international cooperation and solidarity, as well as ensuring global public health.

Israel is gradually lifting restrictions and reopening businesses, despite profit losses for restaurants due to the inability to utilize full seating options, and the customer’s desire to limit social contact. As a consequence, the trend of home cooking is likely to increase. The COVID-19 effect on the food and agriculture sector, such as the impacts on supply, demand, and stocks, among others, are highlighted in the USDA GAIN Report issued on May 18.

The supply chain disruptions caused by COVID-19 affected food imports in Hong Kong as well as the availability and prices of food products. Although Hong Kong is dependent on imports, it has been able to receive supplies from China mainland, despite global logistics disruption and reduction of international flights. These effects of the pandemic among others, are summarized in a recent USDA GAIN Report.

The nationwide lockdown to mitigate the effects of the COVID-19 outbreak in India is extended until May 31.
 
According to the last Port Situation Update in India (see USDA GAIN Report), truck freight rates have increased by 15-20% due to the severe shortage of drivers in the port of Mumbai. According to local reports, workers at Mundra and Kandla ports are increasingly desperate to return to their native homes. As a result, employers are finding it increasingly more difficult to maintain operations. In anticipation of the landfall of Cyclone Amphan, Kolkata Port Trust (KoPT) suspended its operations on May 19 until May 22, to avoid any potential damage.
 
The previous Weekly Port Situation Update stated that container freight stations in Mumbai were considering to reduce up to 50% the rent to importers who have to collect cargo during the first half of April, due to the delays caused by the lockdown. According to local reports, cargo volumes processed in India’s 12 state-owned major ports fell 21% in April 2020. Some ports such as Tuticorin, Kandra, Chennai and Kolkata reported greater losses in cargo volumes, representing 26%, 23%, 38% and 26% respectively. The lack of truck drivers and movement restrictions led to a significant rise in  rail transport, especially in the port of Mundra.
 
Regarding food and retail, according to the USDA GAIN Report published on May 22, a major wholesale market in Mumbai will begin delivering directly to customers via online orders. In Ahmedabad, after an eight-day ban on the sale of groceries that ended on May 15, residents rushed to local produce markets and grocery shops.
 
The previous Weekly Food Retail Update stated that COVID-19 detections have led to multiple market closures and consequent supply disruptions in Mumbai and Chennai. In Kolkata, according to local reports, grocery prices increased for the third time in the last six weeks.

Food products are subject to a reduced VAT (8% from 12%) and certain customs duties are eliminated until October 2020, according to the USDA GAIN Report issued on May 15. Travel and quarantine restrictions are not applicable to food suppliers. However, logistical delays have been reported at the main border crossings as a result of the COVID-19 pandemic, without a significant impact on food availability.

The South African economy is slowly emerging from a strict lockdown as the country moves to alert level 3 on June 1, allowing the reopening of schools. In order to help the tourism sector, which is the largest source of employment in the country, President Cyril Ramaphosa held a virtual engagement with stakeholders in the tourism sector, on May 22, and instituted a Tourism Relief Fund to assist small, micro and medium-sized companies affected by lockdowns and restrictions of movement. These measures are being adopted amid a raise of COVID-19 cases as well as different regional peaks of the disease.

A recent USDA GAIN Report assessed the impact of COVID-19 on the Thai economy. The report stated that despite the outbreak is under control, the economy is moving towards a recession as businesses lost revenue and households lost income, particularly in tourism and export sectors. The Thai government expects that the economic impact may be worse in the second quarter of 2020, as lockdown enforcement was extended until the end of May. In order to mitigate these impacts, the government adopted relief measures, such as financial assistance to support vulnerable households and businesses, as well as a $15.5 billion soft load to help Small and Medium Enterprises (SMEs).

On May 19, the U.S. Department of Agriculture (USDA) announced details of direct assistance to farmers through the Coronavirus Food Assistance Program, which will provide up to $16 billion in direct payments to farmers and ranchers impacted by the COVID-19, with a payment limitation of $250,000 per person or entity for all commodities combined.
 
The Food Assistance Program provides financial assistance to producers of agricultural commodities who suffered a 5% or greater price decline due to COVID-19, and face additional marketing costs due to disruptions to shipping partners, lower demand, surplus production, among other issues.
 
For specialty crop producers, the total payment will be based on the total volume sold between January 15 and April 15, the volume of production shipped but unpaid, and the number of acres for which harvested production was not sold, because it did not leave the farm, was destroyed, or was not harvested during the same period. Specialty crops include almonds, pecans and walnuts, among others. Additional crops may be deemed eligible at a later date. The rule was implemented on May 21.
 
Producers can apply for assistance from May 26, through the Farm Service Agency (FSA).  Further details and application forms can be found here. In addition to these direct payments, USDA’s Farmers to Families Food Box program delivers meal boxes to US farmers in need.
 
The USDA and the U.S. Food and Drug Administration (FDA) strengthen the US food supply chain protections during the COVID-19, through a Memorandum of Understanding signed by the two institutions to help to prevent interruptions at FDA regulated food facilities, including fruit and vegetable processing industries.
 
Besides, the FDA extended the application period for its Voluntary Qualified Importer Program (VQIP) to July 31, due to the public health emergency and travel restrictions and advisories. This program is voluntary, fee-based, and provides participating importers of expedited review and import entry for humans and animal foods into the US.

The effects of the COVID-19 are visible in agricultural trade, consumer demand and prices, as reported in the USDA GAIN Report issued on May 15. The economy started its recovery after eliminating the maximum social distancing measures on April 23 in certain areas, and schools and non-essential businesses began to reopen. The Government approved a $3 billion package in order to stimulate the economy, including cash payments, and interest-free loans to businesses.
 
 
The information above is a review of actions the INC has compiled from government sources, international organizations and press media. This news article is not intended to be exhaustive and it does not reflect the opinions of the INC. While the publishers believe that all information contained in this publication was correct at the time of publishing, they can accept no liability for any inaccuracies that may appear or loss suffered directly or indirectly by any reader as a result of any advertisement, editorial, photographs or other materials published in this news article.