Article: Food and Ag Policy Briefing

This article has been taken from our IEG Policy platform dated 20/04/20.

Policy moves in Europe and the US last week sort largely to ameliorate the effects of the continuing COVID-19 epidemic on food supplies and the wider economy. At the beginning of last week, the organization Feeding America, the largest hunger-relief organization in the US, called on the United States Department of Agriculture (USDA) to establish a food voucher scheme.

Feeding America. which operates a network of around 200 food banks and 60,000 food pantries and meal programs across the country, said their outlets were "under tremendous pressure to meet the skyrocketing demand" during the outbreak.

A voucher program, the group said, "would deepen the relationships between farmers and food banks, allowing them to work directly with one another instead of relying upon third parties and what is sometimes a longer pathway to get food from farms to food bank shelves." The proposal was met "with enthusiasm" by the USDA.

The USDA's Agriculture Secretary Sonny Perdue reassured US consumers two days later, at a White House press conference, that there were no shortages of food and that the supply chain is "strong, resilient and safe". The announcement followed the closure of major meat plants to contain the spread of the virus among staff.

Leaked plans revealed last week that the European Commission was set to put off its flagship Farm to Fork (F2F) strategy until the Autumn owing to the COVID-19 pandemic.

The Commission also published a document that looked at food safety in relation to COVID-19, emphasizing previous advice from the European Food Safety Authority (EFSA) that there is no evidence that food is a transmission source of the virus.

The World Health Organisation (WHO) published its' own COVID-19 guidance document for the food industry which looked at, among other areas, transport and delivery of food, social distancing in the workplace and use of disposable gloves.

Taxes, green lanes and not much yeast

Norway reported running low on yeast as more people turned to home baking. Food conglomerate Orkla announced it was stepping up production of yeast to meet demand.

Hungary imposed a new retail tax on foreign-owned retail chains saying that the money raised will go to a coronavirus fund to pay for protective equipment for medical professionals and finance additional salaries for those employed in the healthcare system.

Serbia reported that a "green lane" system for essential goods such as food and medicine had been established throughout the Central European Free Trade Zone to ensure efficient supply of the goods and prevent border delays.

Bans on imports, exports

In Bulgaria, a cabinet minister proposed a ban on imports of fruit and vegetables as part of the country's response to the coronavirus outbreak and its negative impact on Bulgaria's food sector.

"We eat tomatoes imported from Jordan, it is not normal [and it does not] encourage Bulgarian farmers," Deputy Prime Minister and Defence Minister Krasimir Karakachanov said. It follows the drafting of a regulation in Bulgaria to support local food producers through obliging retailers to ensure that more than half of the offered food products are locally produced.

Romania was criticized by the European Commission for suspending exports of some of its major agri-food products as it sort to cover the needs of its citizens during the COVID-19 pandemic. The Commission said that there were no valid market-related reasons to limit trade within or outside of the EU's Single Market.

In the UK, representatives of 32 food industry associations published a joint letter calling on all Governments to ensure the continuation of critical imports and exports as some countries moved to restrict imports and exports to support their local populations. "Our manufacturers rely on exports to grow their businesses and imports to complement their use of domestically produced ingredients and raw materials," Ian Wright, head of the UK Food and Drink Federation, said.

Direct-to-consumer

In Portugal, wholesalers started selling food products direct to consumers due to difficulties encountered by the population getting food through normal channels.

Meanwhile, the Czech government was preparing to re-launch a significant segment of the country's economy that was shut down amid the coronavirus outbreak. Czech Industry and Trade Minister Karel Havlicek announced the cabinet's schedule for re-opening farmers markets and food catering outlets.

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Posted 21 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.