Article: Food and Ag Policy - 18 May

This article is taken from our IEG Policy dated 10/05/20.

The White House Administration was being lobbied last week to provide aid to livestock producers to dispose of - or "depopulate" - healthy animals who are not being otherwise slaughtered because meat plants have been closed by the COVID pandemic.

In a letter to the Administration, lawmakers stated that in Minnesota "at least 10,000 pigs are being depopulated daily as plant closures have left farmers with no other option."

Remote audits and other alternatives to onsite visits have increased due to COVID-19 but may well continue when the pandemic begins to subside, both speakers and participants in a United Fresh Produce Association webinar said.

Three quarters (75%) of participants in the event - including representatives of United Fresh, the California Leafy Greens Marketing Agreement (LGMA), Wegmans, Dole, and Global GAP - said they believe audits after the pandemic will continue to be conducted mostly onsite but will include more and more portions that are conducted remotely.

About seven weeks after FDA suspended routine inspections of food facilities, the agency announced it had started working on a plan for resuming routine facility surveillance.

Meanwhile, three lawmakers on the House Agriculture Committee pushed for more state "farm to food bank" projects under The Emergency Food Assistance Program (TEFAP) due to rising food security concerns and the disposal of surplus ag commodities linked to the COVID-19 pandemic.

Under the lawmakers' Farm to Food Bank Enhancement Act, $25 million through Fiscal Year (FY) 2020 would be set aside to help states expand or establish new Farm to Food bank projects and states would be encouraged to "work with agricultural producers, distributors, and processors who grow or market products that have seen decreased demand due to the COVID-19 outbreak and cannot easily be repackaged for retail sale," according to a bill summary.

IHS Markit's Joan Murphy reported on consumers' embrace of technologies, especially to shorten the supply chain, as one of the trends emerging for sustainability in the wake of COVID-19.

Europe prepares to re-open

The European Commission issued guidance mid-week on the reopening hospitality sector following its hibernation during the COVID crisis. Hotels, restaurants, bars, cafés and canteens, which support millions of jobs across Europe, have been shuttered by the COVID crisis for weeks.

IHS Markit's Steve Gillman looked at how tourism's recovery from the pandemic could shape agri-food markets whilst IHS Markit's Pieter Devuyst reported on EU ministers' demands for an extension of the scope of the current private storage aid (PSA) and other market measures to additional sectors that are in serious difficulties because of COVID, such as horticulture, pig meat, potatoes, poultry and veal.

An analysis piece on VAT was featured last week, written by Russell Hughes of VAT consultant Accordance. It looked at the requirements for paying VAT on business to consumer sales (B2C) and business to business sales (B2B) and at the EU's Four Quick Fixes that were implemented in January this year.

Across Europe, McDonald's announced it would be slowly reopening stores in the UK and Ireland, food policy experts urged the UK government to set up a single committee to co-ordinate decisions on food issues, and France announced an aid package to help wine producers deal with the affects of COVID.

Poland announced its' schedule for reopening restaurants, a German meat processor defended its recod on COVID risks in meat plants as the industry was under fire both in Europe and the US, and it emerged that the Italian sugar and plastic taxes, planned for implementation this year, have been delayed until 2021.

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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.