Worst case, fast government response stops collapse.

Despite significant disruption to the agriculture and food supply chains, particularly in the first half of 2020, most sector shocks were absorbed rapidly, with trade and markets recovering during the year. Average gross farm receipts for OECD and emerging economies actually increased in 2020, and the sector was the best performing or least affected economically in several countries. At the same time, restricting measures impacted the food security of many low income or unemployed consumers.

This relative economic resilience of the agriculture and food sector was largely due to sector specific policy measures undertaken by governments in response to the COVID-19 pandemic and associated restrictions. Many governments moved swiftly to keep agricultural supply chains functioning, including by designating agriculture and food as an essential sector and by ensuring international co-operation to limit trade disruptions.

An estimated 776 unique policy response measures were adopted by governments of 54 OECD and emerging economies in 2020. These measures were widely diverse, highlighting the breadth and responsiveness of public actions to address the impact of the crisis. Close to 20% of the total were urgent measures, adopted in order to contain the pandemic while keeping food and agriculture supply chains working. Just under 70% of measures took the form of temporary relief, seeking to contain the impact of the crisis on agriculture and food sector actors, and should be phased out as the crisis recedes. Most of the remaining measures (10%) were “no regrets” policies with the potential to improve the long-term resilience of the agro-food sector, and which have the potential to be scaled up further. At the same time, 11% of measures had the potential to distort markets or be harmful to the environment.

A first assessment of budgetary expenditures in response to the COVID-19 crisis suggests that a minimum of USD 157 billion was earmarked in funding or offered in financing means to the sector in 2020, including USD 75 billion in OECD countries and USD 82 billion in emerging economies. Actual disbursements have so far been lower, partly reflecting the overall resilience of agriculture to the COVID-19 shock, and the fact that recovery packages in several countries include multi-year investments.