We are still seeing major social and economic consequences of the worldwide Covid-19 epidemic, and the Dutch agricultural sectors are no exception. There have been many (potential) threats and uncertainties in recent months, but what is the actual impact of the corona crisis on the Dutch agricultural sector? Researchers from Wageningen Economic Research have been involved in analysing the consequences from the beginning of the crisis. They share their findings in the report titled The impact of the corona crisis on the Dutch agricultural complex (Dutch: De impact van de coronacrisis op het Nederlandse agrocomplex).
The consequences of the coronavirus outbreak were felt immediately. For example, the internationally operating food system was disrupted from one moment to the next by the halt in air traffic and the temporary closure of borders. There was also an immediate drop in demand due to the suspension of catering and food services. In addition, there were concerns as to whether agricultural production would not be seriously disrupted by reduced availability of (seasonal) labour.
Need for information
The Ministry of Agriculture, Nature and Food Quality (LNV), like other ministries, was confronted from the beginning with the question of whether additional policies would be necessary to limit the consequences of the crisis. To this end, the (possible) bottlenecks in the business processes in the agricultural sector had to be identified. Insight was also needed into the options for preventing or limiting those bottlenecks.
In the period from March to August, under the leadership of Wageningen Economic Research, monthly analyses were carried out for 17 subsectors of the agricultural complex. A number of questions were central to this process, such as: which bottlenecks exist in the business processes (primarily at the company level but also further down the chain), what are the consequences of these bottlenecks, what can be done about them and who is involved?
Bottlenecks in a timeline
The bottlenecks were plotted on a timeline for six sectors (arable farming, floriculture, greenhouse vegetable cultivation, dairy farming, pig farming and poultry farming). This timeline clearly indicates what the current and possible bottlenecks are per month as well as per part of the business process. The timeline and summary form a coherent picture.
Impact seems limited
Looking back at the first six months of the corona crisis, the impact on the Dutch agricultural sectors in this period appears to have been relatively less than was feared at the beginning. This is largely due to the short duration of the first lockdown period, but also to the setting up of green lanes in the EU that allowed trade to continue. The biggest problems occur in the areas of labour, sales and price development.
From the beginning of the lockdown, there was concern about the availability of (seasonal) labour forces. In the end, the use of labour did not become a very big problem, partly thanks to initiatives in the sector to recruit young people, for example. At the beginning of the corona crisis, slaughterhouses in particular were hindered by personnel limitations due to a combination of sick employees, the need to keep their distance from the slaughter line, and foreign personnel who were less readily available.
Sales outside the EU
The Dutch agricultural sector is heavily embedded in an international network. Due to the measures taken, the fine-meshed and efficiently organized value chains have suffered temporary or long-term disruption. This concerns, for example, sales of products outside the EU. This international interdependence can also be a major bottleneck in a subsequent outbreak. Domestic sales have also been hit hard as a result of the corona measures.
Product prices under pressure
Related to sales, prices are (still) under pressure for many products, but not for all. Free-range eggs and vegetables, for example, have better prices thanks to increased sales. The prices for various types of fish have also returned to the level they were at before corona and the butter price is picking up again. Other factors may also play a role in these price developments, such as seasonal fluctuations in prices as a result of temporary (international) shortages and surpluses.
First dust has settled
The first wave of the corona crisis is behind us and although the first dust has settled and we can cautiously take stock, a full understanding of the consequences is not yet possible in all cases. The analysis at the start of the second wave does show that the impact of the crisis will increase if lockdowns are stricter, last longer and occur more frequently in subsequent phases.