Article: Food and Ag Policy Briefing (28 April)

This article is taken from our IEG Policy platform dated 27/0420.

Pressure mounted on the US meat sector last week as COVID spread through facilities, putting staff out of action. Major meat processor JBS USA announced that it was temporarily closing down a pork processing plant in southwestern Minnesota due to an outbreak of the coronavirus among its employees, adding to the growing list of meatpacking facilities shuttered because of the pandemic.

Tyson Foods also announced it would suspend operations at its Waterloo, Iowa pork plant for an indefinite period following cases of COVID-19 among employees.

The closures of meat plants led three dozen senators to Vice President Mike Pence, Agriculture Secretary Sonny Perdue, and other top officials about how they would protect food workers and federal inspectors from COVID-19.

On Thursday (April 23), the United Food and Commercial Workers (UFCW) International Union said that more than 5,000 of its food processing and meatpacking workers had been sickened by, or exposed to, COVID-19.

Aid welcomed

The USDA's $19 billion Coronavirus Food Assistance Program (CFAP) - entailing $16 billion in farmer payments and $3 billion for commodity purchases - was welcomed last week by agricultural groups.

"The coronavirus pandemic forced the closing of restaurants, schools and college cafeterias, causing commodity prices to fall off a cliff and serious disruptions to food supply chains. This $16 billion in aid will help keep food on Americans' tables by providing a lifeline to farm families that were already hit by trade wars and severe weather," American Farm Bureau Federation (AFBF) President Zippy Duvall said

However, USDA Secretary Sonny Perdue has already acknowledged that more aid will be needed. "We don't expect that we've met all the needs and we are not going to make everyone content ... we will have to see where the gaps are to be addressed later on,"

Charter flights

The European Commission was called upon to introduce new measures to protect farm workers from contracting the coronavirus as thousands of migrant workers fly into help with Europe's harvest.

EU Member states have been quick to allow seasonal farm workers into their countries, with some countries, like Germany and Ireland, chartering flights to get labourers onto their farms in time for fruit and vegetable harvests.

But civil society groups claimed that workers were often living in unsanitary settlements where physical distancing is impossible, which puts them, and their families, at risk of contracting the virus.

The European Commission also announced last week that it would take some 330,000 tonnes of dairy products and 61,000t of meat off the market this summer, as it introduces private storage aid (PSA) for the first time in three years. The move was a response to rapidly falling prices for butter, skimmed milk powder, cheese, beef, and sheep/goat meat as a consequence of the market disruption caused by the COVID-19 crisis.

Later in the week, the European Council agreed to support a €540 billion aid package following the coronavirus pandemic's financial impact on the EU bloc's economy.

Member state actions

Poland was among the EU member states that were starting to talk about loosening restrictions imposed as a result of the coronavirus.

Romania has lifted a six-day long ban on the exports of some key agri-food products to non-EU countries, which was aimed at ensuring supplies during the COVID-19 pandemic. The country was criticized by the European Commission for imposing the ban saying that Romania did not have a food shortage and there was no valid, market-related reason for the restrictions.

In the UK, the government announced plans to relax competition rules to make it easier for farmers, processors and logistics businesses to work together on rationalising milk deliveries during the COVID-19 crisis.

Food security a top concern

Assessments of global food security came thick and fast during the week, first with the release of a report by the Global Food Crises Network which stated that, even before the pandemic broke out, food security was worsening in the world.

The World Food Programme, shortly afterwards, put a number on that situation, saying that the COVID-19 pandemic could see more than a quarter of a billion people suffering acute hunger by the end of the year.

Agriculture ministers from the Group of 20 countries pledged to refrain from trade restrictions that could threaten food security in response to the COVID-19 pandemic.

We reported on how food riots and looting can be expected in any country where there are huge numbers of people living in squalor in very crowded slums and (importantly) where the lockdown has really disrupted food distribution at a time when a lot of dispossessed people have returned home and the infrastructure cannot get enough food into the cities. That means India (Mumbai, Kolkata, Delhi, Pune), South Africa (Johannesburg, Cape Town), Brazil (Rio, São Paulo) and Mexico.

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Posted 28 April 2020 by Peter Rixon, Managing Editor, EU Food Law and Eurofood Monitor

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.