Food prices, processing, and shocks: Evidence from rice and COVID-19.
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ABSTRACT:
SUBMITTER: Goeb J
PROVIDER: S-EPMC8652574 | biostudies-literature |
REPOSITORIES: biostudies-literature
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Project description:It is widely feared that the shock of the COVID-19 pandemic will lead to a significant worsening of the food security situation in low and middle-income countries. One reason for this is the disruption of food marketing systems and subsequent changes in farm and consumer prices. Based on primary data in Ethiopia collected just before the start and a few months into the pandemic, we assess changes in farm and consumer prices of four major vegetables and the contribution of different segments of the rural-urban value chain in urban retail price formation. We find large, but heterogeneous, price changes for different vegetables with relatively larger changes seen at the farm level, compared to the consumer level, leading to winners and losers among local vegetable farmers due to pandemic-related trade disruptions. We further note that despite substantial hurdles in domestic trade reported by most value chain agents, increases in marketing-and especially transportation-costs have not been the major contributor to overall changes in retail prices. Marketing margins even declined for half of the vegetables studied. The relatively small changes in marketing margins overall indicate the resilience of these domestic value chains during the pandemic in Ethiopia.
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Project description:Abstract In this paper, I explore the economic activities of the food processing industry during the coronavirus disease‐2019 (COVID‐19) pandemic. One of the key lessons from food processing and related industries is that without being designated as an essential service and targeted stimulus packages, the food industry could have fallen victim to the COVID‐19 crisis. Although the social and economic impacts of the interventions are not clear, being designated as an essential service was likely far more important to the food industry than the targeted stimulus packages. The pandemic and shutdown orders had a considerable production reallocation effect. Some processors have seen temporary closure and reduced capacity utilization. On the upside, disruptions in the food processing sector have not been as severe as in non‐essential sectors. The food processing sector has proven to be relatively stable during the pandemic – food was still processed and delivered to consumers and food price increases were minimal in most cases given the scale of the shock. Moving forward, because COVID‐19 is a global crisis, internationally targeted and coordinated efforts to tackle the virus could place the industry on a strong trajectory towards economic recovery and growth. Résumé Dans cet article, j'explore les activités économiques de l'industrie de la transformation des aliments pendant la pandémie COVID‐19. L'une des principales leçons tirées de la transformation des aliments et des industries connexes est que sans être désignée comme un service essentiel et visée par des plans de relance ciblés, l'industrie alimentaire aurait pu être victime de la crise du COVID‐19. Bien que les impacts sociaux et économiques des interventions ne soient pas clairs, être désigné comme un service essentiel était probablement beaucoup plus important pour l'industrie alimentaire que les plans de relance ciblés. La pandémie et les ordres d'arrêt ont eu un effet considérable de réallocation de la production. Certains transformateurs ont connu des fermetures temporaires et une utilisation réduite de leurs capacités. Les perturbations dans le secteur de la transformation des aliments n'ont pas été aussi graves que dans les secteurs non essentiels. Le secteur de la transformation des aliments s'est avéré relativement stable pendant la pandémie ‐ les aliments étaient encore
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Project description:Do negative economic shocks change fiscal policy preferences? We examine this question via the large COVID-19 shock, as the virus and ensuing lockdowns caused one of the largest acute economic contractions in recent history. While previous evidence that recessions meaningfully change fiscal preferences is limited, we hypothesize that the health pandemic should have had distinct effects. We argue that this is due to the large breadth, uncertainty, and socio-tropic basis of the economic contraction, and that worse economic evaluations and reduced economic optimism should correspond with greater support for fiscal interventions to address the crisis. To test these hypotheses, we use new panel evidence from Spain, a hard-hit country, surveying individuals prior to the pandemic and the same individuals during the pandemic. We find that individuals became more economically pessimistic across many measures. However, there is little evidence that this translates into support for more expansive fiscal policies. Second, we find through a framing experiment that this could be because individuals believe that the government’s fiscal policies would disproportionately benefit lower-income individuals. The findings indicate the theoretical importance of recessions for changing individual and socio-tropic economic expectations, but do not support the claim that large economic shocks can significantly change fiscal preferences.
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Project description:We investigate how the experience of extreme events, such as the COVID-19 market crash, influence risk-taking behavior. To isolate changes in risk-taking from other factors, we ran controlled experiments with finance professionals in December 2019 and March 2020. We observe that their investments in the experiment were 12 percent lower in March 2020 than in December 2019, although their price expectations had not changed, and although they considered the experimental asset less risky during the crash than before. This lower perceived risk is likely due to adaptive normalization, as volatility during the shock is compared to volatility experienced in real markets (which was low in December 2019, but very high in March 2020). Lower investments during the crash can be supported by higher risk aversion, not by changes in beliefs.
| S-EPMC8579757 | biostudies-literature
Project description:Food prices have escalated due to impacts of the COVID-19 pandemic on global food systems, and other regional shocks and stressors including climate change and war. Few studies have applied a health lens to identify the most affected foods. This study aimed to assess costs and affordability of habitual (unhealthy) diets and recommended (healthy, equitable and more sustainable) diets and their components in Greater Brisbane, Queensland, Australia from 2019 to 2022 using the Healthy Diets Australian Standardised Affordability and Pricing protocol. Affordability was determined for reference households at three levels of income: median, minimum wage, and welfare-dependent. The recommended diet cost increased 17.9%; mostly in the last year when the prices of healthy foods, such as fruit, vegetables and legumes, healthy fats/oils, grains, and meats/alternatives, increased by 12.8%. In contrast, the cost of the unhealthy foods and drinks in the habitual diet 'only' increased 9.0% from 2019 to 2022, and 7.0% from 2021 to 2022. An exception was the cost of unhealthy take-away foods which increased by 14.7% over 2019-2022. With government COVID-19-related payments, for the first time recommended diets were affordable for all and food security and diets improved in 2020. However, the special payments were withdrawn in 2021, and recommended diets became 11.5% less affordable. Permanently increasing welfare support and providing an adequate minimum wage, while keeping basic, healthy foods GST-free and increasing GST to 20% on unhealthy foods, would improve food security and diet-related health inequities. Development of a Consumer Price Index specifically for healthy food would help highlight health risks during economic downturns.
| S-EPMC9967271 | biostudies-literature
Project description:In March 2020, India declared a nationwide lockdown in response to the COVID-19 pandemic. Such restrictions on mobility interrupted the normal functioning of agricultural value chains. For a sample of 1767 tomato and wheat producers in the state of Haryana, we study to what extent the lockdown limited access to inputs, labor, machinery, and markets to produce, harvest, and sell their crops. We quantify crop income reductions during the first months of the lockdown and analyze to what extent these are associated with borrowing and food insecurity. We find that wheat producers, for whom state-led procurement guaranteed market access at fixed prices, suffered minimal declines in income. For tomato producers-an already more vulnerable population-income fell by 50% relative to their expected income in a normal year, largely due to a steep fall of tomato prices as they shifted from wholesale markets to local retail markets, resulting in a sharp increase in local supply. Relative to wheat producers affected by the lockdown, reduced income for tomato producers was associated with an increase in borrowing and reduced food security. We conclude that targeting producers of crops that face substantial price risk and introducing policies that stabilize market prices are important in efforts to aid recovery and build resilience of smallholder farmers.
| S-EPMC8207062 | biostudies-literature
Project description:To reduce the spread of Covid-19 whilst limiting the economic costs of containment policies, governments have introduced geographically-flexible conditional restrictions - measures targeting sub-national areas whose severity depends on the virus's local incidence rate. I analyze whether conditional measures impact transmission rates via a news-shock effect - that is, by incentivizing indirect actions in anticipation of the policies being carried out. Exploiting a natural experiment from Romania in a regression-discontinuity framework, I provide early empirical evidence in this sense: I find that the Covid-19 incidence rate fell significantly in targeted constituencies following the announcement of a conditional containment measure, but prior to the policy being implemented. My results add to a broader literature on news-driven fluctuations, wherein expectations of future policies can impact immediate behaviors. I conclude by discussing an important avenue for future research.
| S-EPMC8900875 | biostudies-literature
Project description:This paper documents the magnitude and distribution of U.S. earnings changes during the COVID-19 pandemic and how fiscal relief offset lost earnings. We build panels from administrative tax data to measure annual earnings changes. The frequency of earnings declines during the pandemic were similar to the Great Recession, but the distribution was different. In 2020, workers starting in the bottom half of the distribution were more likely to experience an earnings decline of at least 10 percent. While most workers experiencing large annual earnings declines do not receive unemployment insurance, over half of beneficiaries were made whole in 2020, as unemployment insurance replaced a median of 105 percent of their annual earnings declines. After incorporating unemployment insurance, the likelihood of large earnings declines among low-earning workers was not only smaller than during the Great Recession, but also smaller than in 2019.
| S-EPMC8730490 | biostudies-literature
Project description:This paper examines sectoral productivity shocks of the COVID-19 pandemic, their aggregate impact, and the possible compensatory effects of improving productivity in infrastructure-related sectors. We employ the KLEMS annual dataset for a group of OECD and Latin America and the Caribbean countries, complemented with high-frequency data for 2020. First, we estimate a panel vector autoregression of growth rates in sector level labor productivity to specify the nature and size of sectoral shocks using the historical data. We then run impulse-response simulations of one standard deviation shocks in the sectors that were most affected by COVID-19. We estimate that the pandemic cut economy-wide labor productivity by 4.9% in Latin America, and by 3.5% for the entire sample. Finally, by modeling the long-run relationship between productivity shocks in the sectors most affected by COVID-19, we find that large productivity improvements in infrastructure-equivalent to at least three times the historical rates of productivity gains-may be needed to fully compensate for the negative productivity losses traceable to COVID-19.Supplementary informationThe online version contains supplementary material available at 10.1007/s41885-021-00098-z.
| S-EPMC8777183 | biostudies-literature
Project description:BackgroundSub-Saharan Africa faces prolonged COVID-19 related impacts on economic activity, livelihoods and nutrition, with recovery slowed down by lagging vaccination progress.ObjectiveThis study investigated the economic impacts of COVID-19 on food prices, consumption and dietary quality in Burkina Faso, Ethiopia, Ghana, Nigeria, and Tanzania.MethodsWe conducted a repeated cross-sectional study using a mobile platform to collect data from July-December, 2021 (round 2). We assessed participants' dietary intake of 20 food groups over the previous seven days and computed the primary outcome, the Prime Diet Quality Score (PDQS), and Dietary Diversity Score (DDS), with higher scores indicating better quality diets. We used generalized estimating equation (GEE) linear regression models to assess factors associated with diet quality during COVID-19.ResultsMost of the respondents were male and the mean age was 42.4 (±12.5) years. Mean PDQS (±SD) was low at 19.4(±3.8), out of a maximum score of 40 in this study. Respondents (80%) reported higher than expected prices for all food groups. Secondary education or higher (estimate: 0.73, 95% CI: 0.32, 1.15), medium wealth status (estimate: 0.48, 95% CI: 0.14, 0.81), and older age were associated with higher PDQS. Farmers and casual laborers (estimate: -0.60, 95% CI: -1.11, -0.09), lower crop production (estimate: -0.87, 95% CI: -1.28, -0.46) and not engaged in farming (estimate: -1.38, 95% CI: -1.74, -1.02) were associated with lower PDQS.ConclusionHigher food prices and lower diet quality persisted during the COVID-19 pandemic. Economic and social vulnerability and reliance on markets (and lower agriculture production) were negatively associated with diet quality. Although recovery was evident, consumption of healthy diets remained low. Systematic efforts to address the underlying causes of poor diet quality through transforming food system value chains, and mitigation measures, including social protection programs and national policies are critical.
| S-EPMC10309633 | biostudies-literature