G/AG/GEN/175  
 
26 November 2020  
(20-8550) Page: 1/3 
Committee on Agriculture  Original: English  
 
FAO REPORT TO THE 96TH MEETING OF THE WTO COMMITTEE ON AGRICULTURE  
30 NOVEMBER -1 DECEMBER 2020  
 
"COVID -19 AND AGRICULTURE " 
Submission by FAO  
The following submission, dated 2 5 November  2020, is being circulated at the request of the Food 
and Agriculture Organization (FAO).  
 
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1  COVID -19 AND FOOD INSECURITY  
1.1.  The coronavirus pandemic and measures to contain it have plunged the global economy into 
the worst recession since World War II, worsening food insecurity and malnutri tion. Even before the 
onset of the pandemic, nearly 690 million people were undernourished, 2 billion people did not have 
regular access to safe, nutritious and sufficient food, and 3 billion people could not afford healthy 
diets. It is estimated that the pandemic may result in adding between 83 million to 132  million 
people to the total number of undernourished in 2020.1 
1.2.  The challenge of food security is about access rather than availability globally. Nonetheless, 
while near -term prospects point to genera lly ample global food supplies, markets continue to face 
risks and uncertainties due to prospects economic downturn and unstable energy and currency 
markets. Furthermore, African swine fever and desert locust outbreaks constitute major challenges, 
in addit ion to the threats and shocks of climate change.  
1.3.  The deterioration in the food security situation will be particularly severe in countries that highly 
depend on food imports and where a large proportion of household incomes is spent on food, as the 
effects of COVID -19 will likely exert a shock on the final food demand due to the loss of jobs and 
incomes.  
2  COVID -19 AND THE IMPACT ON SUPPLY CHAINS AND MARKETS  
2.1.  The measures to control the spread of COVID -19 or mitigate its impacts have put under stress 
many supply chain related activities, including production, processing, logistics and retailing.  
2.2.  In the beginning of the pandemic, the primary concern was to contain the multiple risks of 
disruption to the food supply chains. A number of countries hurriedly  applied export restrictions and 
consumers were hoarding food. Today, the number of countries with trade barriers has come down 
from 22 to almost none. In comparison, during the 2007 -2008 global food price crisis, 33 countries 
had trade restrictions.  
2.3.  Borde r and travel restrictions often led to shortages of agricultural labour, affected the level of 
trade activity and affected access to, and availability of, inputs, including seeds, fertilizers and 
pesticides. In addition, labour -intensive segments of the fo od industry (such as processing facilities ) 
have been under stress in an effort to minimize the transmission of the virus, thus running at lower 
 
1 FAO, IFAD, UNICEF, WFP and WHO. (2020). The State of Food Security and Nutrition in the 
World  2020. Rome.  G/AG/GEN/175  
 
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  capacity due to shutdowns and partial closures. Similarly, more than 120 countries and territories 
have banned or limited access to ships to prevent the spread of COVID -19. This resulted in the worst 
shipping crisis in decades, putting lives and global trade at risk, with 300 000 seafarers stranded at 
sea in deteriorating conditions.2 
2.4.  Overall trade and global valu e chains in food and agriculture have proved relatively resilient to 
the COVID -19 shocks, especially in essential food products. According to data available up to 
June 2020, and as shown in Figure 1, the food import bill at the global level expanded by 0.5 % in 
the first half of 2020, compared to the same period in 2019. Imports of staple foodstuffs, such as 
cereals, oilseeds and vegetable oils, sugar and fruits and vegetables recorded an increase in the first 
half of 2020 in both value and volume terms, des pite generally higher prices for these products. The 
commodities for which global trade registered the highest contraction in the first half of 2020, 
compared to the first half of 2019, can be regarded as highly income elastic, consisting particularly 
of beverages and fish products. Against this backdrop, the global aggregate food import bill may 
remain close to its 2019 level, potentially even exceeding it slightly in view of firming prices for most 
food commodities in recent months.  
Figure 1: World food i mport volumes (USD billion, 2015 constant prices)  
 
Source:  FAO. 2020. Food Outlook – Biannual Report on Global Food Markets – November 2020. Rome. 
https://doi.org/10.4060/cb1993en . 
3  VULNERABILITIES AFFECTING  ACCESS TO FOOD  
3.1.  The economic slowdowns in developing countries (and the subsequent decrease in disposable 
household incomes ) is expected to lead to a significant reduction in demand for agricultural 
commodities, with a real threat of a rise in food insecur ity.3, 4 Such effects might be more prominent 
in economies that rely on large informal sectors, international tourism, export of raw commodities, 
and remittances.  
3.2.  Following the COVID -19 outbreak, most countries experienced a rise in unemployment rates. 
In this con text, social safety nets, including unemployment payments and cash/in -kind transfers 
represent a fundamental means to secure incomes and consumption of the poor. However, because 
 
2 FAO. (2020). CL 165/5 - FAO’s response to COVID -19: Building to Transform. Rome. Available at: 
http://www.fao.org/3/ne124en/ne124en.pdf . 
3 IFPRI. (2020). How much will global poverty increase because  of COVID -19? Retrieved from IFPRI 
Blog: https://www.ifpri.org/blog/how -much -will-global -poverty -increase -because -COVID -19. 
4 OECD -FAO. (2020). OECD -FAO Agric ultural Outlook 2020 -2029. Paris.  
G/AG/GEN/175  
 
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  of their fiscal limitations, many developing countries might not be able to p rovide the necessary 
assistance. This could be further exacerbated in countries characterized by large informal sectors, 
since the informal economy limits the ability of the state to capture fiscal resources for the state.  
3.3.  COVID -19 related effects on food  demand are also likely to affect developing countries that 
depend on tourism. Following the implementation of travel restrictions, international travels 
contracted significantly, leading to substantive reductions in revenues and increases in 
unemployment rates in both the accommodation and food services sectors.  
3.4.  An analogous situation is expected in countries that rely on the export of raw commodities such 
as minerals, ores, or fuels to pay for their food import bills. Since the beginning of the crisis, a lso 
due to reduced economic activity worldwide, raw commodity prices (with few exceptions) have 
dropped considerably.5This may put at risk the capacities of these countries to finance food imports 
and presents an additional risk of triggering domestic foo d price inflation.  
3.5.  Finally, it is estimated that countries receiving large amounts of remittances to provide critical 
livelihood support to millions of families will be severely impacted. In fact, as economies globally 
enter in a period of recession and u nemployment, there will be limits in the capacity to send 
remittances back home.  
4  RECOMMENDED POLICY RESPONSES  
4.1.  While significant disruptions in food supply chains have been reported over the last months, 
agri-food trade and global value chains continued to operate rather smoothly. As such, and 
considering the above, it would be of the utmost importance that Members and development 
organizations continue supporting vulnerable countries and groups through actions aiming at 
supporting access to food.  
4.2.  In this r egard, trade is central. It can improve access to various markets, boosting producers ' 
productivity and income in both exporting and importing countries. Moreover, the catch -up potential 
could be significant for many developing countries, which face challe nges in accessing key target 
markets, including those in their immediate vicinity as evidenced by low levels of intra -regional 
trade. In Africa, for example, while intra -regional trade has grown over the last decade, currently it 
only makes up 27 % of total  agri-food exports and 17 % of total agri -food imports – a trend that 
generally holds across African regional economic communities. Improving food safety could help 
accelerate Africa 's intra -regional trade, by reducing non -tariff trade barriers.  
4.3.  Similarly, addressing policy barriers (related to food safety, digital solutions in the application 
of trade procedures, etc.) and physical constraints (such as underdeveloped marketing and trade 
infrastructure) is of outmost significance for exporting countries, but  will also be crucial for importing 
countries to address domestic supply disruptions, improve food availability and stabilize local 
markets and prices.  
4.4.  In this context, public investment in market and trade -related infrastructure, including in digital 
marketing platforms, is crucial to stimulating private investment in agriculture and value chains. In 
particular, last mile infrastructure, electricity and water provision, as well as ICT service provision 
are identified as key impediments, while, at the same  time, there is a need to de -risk private 
financing in agriculture through blended finance and guarantee schemes.  
4.5.  The COVID -19 pandemic has accelerated the automation of the food and agriculture sectors. 
The integration of robotics and big data in agriculture is already playing a key role in sustainably 
meeting the growing food demand globally. It is critical that technology, innovation and data are 
inclusive and are utilized to spur development. Investments in human capital as well as regulations 
that minimize the risks of unequal access and exclusion are needed.  
 
 
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5 FAO. (2020 ). COVID -19 global economic recession: avoiding hunger must be at the centre of the 
economic stimulus. Rome.