The potential impact of COVID-19 on SDG 2 (food security) – in China and globally

©IFAD/Qilai Shen

Last week’s OECD Interim Economic Outlook confirmed, as predictable, that the impact of the COVID-19 outbreak on China’s and the rest of the world’s economy is going to be extremely severe.

Restrictions on the movement of people, goods and services, as well as containment measures such as factory closures, have cut manufacturing and domestic demand sharply in China. As a result, OECD lowered its forecast on China’s GDP growth for 2020 – from an initial 5.7 per cent growth estimate in November 2019 to a much lower 4.9 per cent in March 2020.

Similarly, because of China’s weight on the global economy and the rapid expansion of COVID-19 globally, OECD suggested that global GDP growth could drop from an already weak 2.9 per cent in 2019 to an even lower 2.4 per cent in 2020.

While the economic impact of COVID-19 on China’s and the world's economy is being carefully monitored and assessed, at the moment little is known about the impact of the outbreak on other "non-economic" sectors such as development.

As an IFAD staff member based in China, I will share some personal reflections on the possible impact of COVID-19 on the achievement of the Sustainable Development Goals (SDGs), particularly on SDG 2: food security – both in China and globally.

Let me state beforehand that the very limited data currently available make such assessment extremely difficult. My considerations are thus mainly based on my personal observations in China.

Considering that the agricultural sector contributes to about seven per cent of the GDP in China, the impact of COVID-19 on China’s overall economy would equally affect the agricultural and food security sector. In this regard, we can anticipate a shorter-term, or immediate, impact, and a longer-term impact – which could potentially have global consequences.

Immediate impact

The restrictions on the movements of people and the factory closures implemented by the Government of China have had an impact on the circulation, and thus availability, of food and agricultural products, and have also interrupted several value chains, with a potential impact on prices.

Counterintuitively, however, what has been observed so far is that, despite the limited circulation of food, the food supply has overall remained stable, and – with limited exceptions – food prices in the country have overall remained stable as well. This can probably be attributed to the large availability of food stocks at the time of the outbreak, when movement restriction measures began to be implemented.

However, the longer the situation persists and the longer the restrictive measures continue, the more stress will be exerted on the whole system. If the circulation of people is not re-established soon, food stocks are destined to decline, and prices to increase.

Obviously, the most impacted would be the poorest and the most vulnerable segments of the population, who have less capacity to deal with the prolonged negative effects of the restrictive preventive measures, especially those affecting labour/wages and production and – ultimately – household income.

Medium- to longer-term impact (and potential global impact)

Beyond the short-term impact of these measures on the food supply, if the situation persists and restrictions on movements continue, there is a risk that agricultural production would be impacted, with consequent longer-lasting and deeper impacts on food availability, prices and – ultimately – overall food security.

March is in fact the beginning of the planting season in many provinces of China. If, because of the movement restrictions, the planting season is missed or delayed, this year’s production would likely suffer, internal food demand would likely not be met, and pressure on agricultural imports would increase – with consequences for global food availability and food prices. The risk of ending up facing a situation similar to that of the food crisis in 2008 is, although currently remote, a possibility not to be completely overlooked. State l