Impact of COVID – 19 on Competitiveness of Agriculture Sector

The global impact of Coronavirus (COVID-19) that originated in Wuhan, Hubei Province of China has spread all around the world with prominent effect in every aspect of the economy. Health conditions of people around the world are highly impeded. Also, due to unprecedented lockdown and restrictions of human movement to combat the pandemic, the economy of different countries is severely affected. 

The most noticeable impact of coronavirus is on the agriculture sector affecting agricultural operations and supply chain in agriculture (Sahoo, 2020). Farmers face problems of reduced prices of crops, disruption in transportation due to lockdown and difficulty in harvesting as well. The market prices of the commodity are rising but the prices received by farmers are low resulting in a huge gap in prices. Different incentive and relief packages on behalf of the farmers are also found less effective. Shortage of labour force for agriculture value chain is also another problem affecting the competitiveness of the agriculture sector. Restrictions in the movement of people also affect transplanting and harvesting however, some of the countries have eased the lockdown activities for the agriculture sector.

The pillars of food security i.e. availability, accessibility, utilization and stability as defined by FAO are affected in different ways by the Corona pandemic. Food security consists of two key elements –economic access, whether people can find available food and physical access, whether people can purchase food. In most of developing countries, food security situations are mainly attributed to economic and physical accessibility leading to price hikes and market failures (Hossain, 2020 and Sahoo, 2020). The global food supply chain is subjected to disruption in different routes via air and land in terms of food availability. Countries have imposed trade restrictions on major commodities like wheat (Kazakhstan, Russia and Romania), rice (Thailand, Cambodia and India). Agriculture inputs like seeds and agrochemicals are also likely to get a shortage due to transport restrictions (Zurayk, 2020). Along with the reduced availability of fresh fruits and vegetables, people have adhered to nutritional deficiencies as well. Changes in dietary diversity and consumption patterns are also changed concerning lockdown and pandemic consequences. In countries of the Middle East and East Africa such as Yemen and Somalia are also affected by conflict as well as locust attack invading crops is deteriorating food security status. 

In light of the current COVID – 19, different countries have taken measures to cope with the damage to the agriculture sector. Indonesia has terminated import certification requirements of onion and garlic. Rice and fish exports have been banned in Cambodia to ensure local food security during the coronavirus crisis (Macmap, 2020). The contribution of the informal sector in agriculture is also a growing sector. Supply of labour to agriculture, selling of agricultural products in rural areas, supplying of agricultural inputs are also contributed by this sector. COVID- 19 has also hit this sector already leaving poor households behind who are vulnerable to food and nutrition security. 

Competition is an inevitable part of business among the countries as every country want to sell their product uniquely. Competitiveness would prevail when in the process of facing competition, the ability to offer the products considering the requirements (price, quality, quantity) that ensures profit and enables a firm to survive (Latruffe, 2010). The competitiveness of a country is subjected to its production capability and capacity. By measuring the economic performance of a firm or country, we can compare International Competitiveness (Sahinli, 2014). Export efficiency of a nation is affected in several ways concerning market prices and in times of crisis or disaster. Price fluctuation is a signal to market forces affecting demand and supply. Despite that, these market functions are attributed to the number of unsolicited measures due to COVID – 19 leading to market failures. 

 A study by Latruffe (2010) in the paper Competitiveness, Productivity and Efficiency in the Agricultural and Agri-Food Sectors explains about competitiveness affected by firms and outside forces. The uncontrollable factors for competitiveness are natural resource base changes, climate, taste and preference of customers and disasters. The current situation the agriculture sector is facing is uncontrollable factors. A firm’s competitiveness is measured by trade indices, cost measures, productivity and non – price component.

The long-term impacts of the Coronavirus pandemic may lead to changes in demand and supply relationships. Consumer orientation towards the online grocery delivery sector and preference to local foods supply chains may be of prime importance to meet the present demand. However, some precautionary steps towards mitigation of panic buying and stockpiling behaviour as seen in different affected countries are of utmost importance. Policy implications also remain to reach poor income consumers and rural indigenous populations, vulnerable groups in affected regions (Hobbs, 2020).

Concluding Remarks

The Corona Virus pandemic has also direct impacts on Human, Natural, Physical, Financial and Social resources. These directly lead to a decline in the effectiveness of social institutions i.e. farmers, farmer groups, communities. A prolonged effect would be food and nutrition insecurity, the labour shortage in agriculture for harvesting and processing, increased food demand coupled with limited supply and ultimately leading to poverty. Thus, robust livelihood strategies and relief packages to boost the agriculture sector is inevitable. 

References

·       Hossain, S. T. (2020). Impacts of COVID-19 on the Agri-food Sector: Food Security Policies of Asian Productivity Organization Members. Journal of Agricultural Sciences–Sri Lanka, 15(2).

·       Hobbs, J. E. (2020). Food supply chains during the COVID‐19 pandemic. Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie.

·       Latruffe, L. (2010). Competitiveness, productivity and efficiency in the agricultural and agri-food sectors.

·       Macmap. (2020). COVID-19 Temporary Trade Measures. 

·       Şahinli, M. A. (2014). Revealed Comparative advantage and competitiveness: Turkey agriculture sector. Yüzüncü Yıl Üniversitesi Tarım Bilimleri Dergisi, 24(3), 210-217.

·       Sahoo, P. P., & Rath, S. (2020). Potential Impact of Corona Virus on Agriculture Sector. Biotica Research Today, 2(4), 64-65.

·       Zurayk, R. (2020). Pandemic and Food Security. Journal of Agriculture, Food Systems, and Community Development, 9(3), 1-5.