This paper analyses the impacts on global agricultural markets of the demand shock caused by the COVID-19 pandemic and the first wave of lockdown measures imposed by the governments in the first semester of 2020 to contain it. Specifically, we perform a scenario-based analysis on the IMF economic growth forecasts for 2020 and 2021 using a global multi-commodity agricultural market model. According to our results, the sharp decline in economic growth causes a decrease in international meat prices by 7–18% in 2020 and dairy products by 4–7% compared to a business as usual situation. Following the slowdown of the economy, biofuel prices fall strongly in 2020, followed by their main feedstocks, maize and oilseeds. Although the income losses and local supply chain disruptions associated with the pandemic undoubtedly has led to an increase in food insecurity in many developing countries, global food consumption is largely unaffected due to the inelastic demand of most agricultural commodities and the short duration of the shock. From an environmental viewpoint, the COVID-19 impacts point to a modest reduction of direct greenhouse gases from agriculture of about 1% or 50 million tonnes of carbon dioxide equivalents in 2020 and 2021.
Food insecurity is a much more serious concern in India than China. In addition to income and poverty differences, we argue in this paper that differences in food policies can further explain the different food security outcomes across the two countries. First, India mostly uses price-based input subsidies to support agricultural incentives whereas China has recently adopted direct transfers to support agricultural incentives, which are believed to be less distorting and more efficient. Second, the two countries apply quite different approaches to address poor consumers' access to food, with India adopting a widely criticized public distribution system and China mainly using direct income transfers and other social safety nets. Third, although both committed considerable fiscal resources to insulating their respective domestic markets, especially during recent food price spikes, India's heavy dependence on price-based measures causes relatively larger and more volatile fiscal burdens, thereby likely making it more vulnerable in dealing with similar events in the future. These findings have important implications for food policy and food security in the two countries in the future.
Summary Agricultural stakeholders have concerns regarding the potential impact of the Farm‐to‐Fork and Biodiversity strategies on the agricultural sector. Several studies have been published recently trying to understand how these strategies would affect the sector, including a JRC report on modelling environmental and climate ambition in the agricultural sector written by the authors of this article. In this article, we argue that the narrow focus of the analysis undertaken is the main driver of the reported reduction in agricultural production in the EU, its deteriorating trade balance and increased prices. We highlight that the strategies include a much broader set of interventions that are not accounted for in the analysis and that the tools used have limitations preventing them from capturing the full scope of potential impacts. The evidence gained from improvements to our modelling approach further reinforce the idea that reported impacts are a higher bound of the potential impact of the input reduction targets. In addition, we signal the limited evidence available on the co‐benefits of improved environmental quality the strategies aim to attain. Both aspects lead us to conclude that we are currently far from being able to assess the impacts that a transition to more sustainable food systems will have on the agricultural sector.
Numerous studies show that insects are efficient in converting organic waste into proteins and fats, which makes them an interesting alternative source of feed. Moreover, since around one-third of global food produced for human consumption is lost or wasted, the production of insect-based meals from food waste is considered a sustainable alternative to other protein sources. This paper introduces a quantitative framework able to analyse the economic implications of developing a large-scale insect-based meal industry worldwide, which would require important regulatory changes. Our calculations, based on findings from the literature, suggest that almost 1.4 billion tonnes of food, that could potentially be used as insect feed, went to waste at the world level in 2018, a figure that is projected to rise to 2 billion tonnes by 2030. Results show that the use of food waste for insect meal and oil production would have important downward price impacts on meals and oils (fish- and plant-based), reducing feed costs and stimulating global aquaculture and livestock production, reducing total land use for agriculture production and lead to a lower dependence on protein imports.
Volatile prices and income uncertainties are major issues for farmers, leading to a demand for policies that mitigate such risks. However, the budgetary consequences of risk management schemes are uncertain due to their dependence on market prices. Using an agricultural multi-commodity market model, we evaluate the potential budgetary consequences of introducing two specific risk management schemes used in the United States into the European Union Common Agricultural Policy (CAP), namely the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programmes. Our analysis considers three sets of reference prices and stochastic uncertainty related to yields and macroeconomic conditions, resulting in a joint distribution of agricultural outputs and support payments. The results show that the payments from these two risk management schemes are sensitive to the reference prices triggering support and to the programme participation shares. In the most extreme stochastic simulations, support payments from the PLC programme reach €23 billion while support payments from the ARC programme reach €2.1 billion for the three crops considered (barley, wheat and maize).
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