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The COVID‐19 pandemic: Anticipating its effects on Canada's agricultural trade

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  • Richard Barichello

Abstract

With the deep recession now forecast for the world economy, trade can be expected to fall even more steeply. Agricultural trade will be less significantly affected, being insulated by its relatively low income elasticities of demand. However, a drop in the range of 12%–20% in real trade value should be expected. Canada can be expected to share in this, but, within agricultural exports, cereals will be least affected. This minimal expected impact to cereals stems partly from the risk of wheat export bans by Russia and Kazakhstan, due to increases in wheat prices. Livestock, pulses, and horticulture exporters can be expected to face a larger decline in trade prospects and revenues. An equally large threat, along with falling incomes in our trade partners, is their policy responses, particularly the potential increase in import restrictions. These may take the form of more costly inspections, tightened SPS and food safety regulations, and protectionist measures from competing domestic producers. Avec la profonde récession qui est maintenant prévue pour l'économie mondiale, le commerce devrait chuter encore plus fortement. Le commerce agricole sera moins affecté, étant isolé par ses élasticités‐revenus de la demande relativement faibles. Il faut cependant s'attendre à une baisse de l'ordre de 12% à 20% de la valeur réelle des échanges. On peut s'attendre à ce que le Canada y participe, mais, dans le cadre des exportations agricoles, les céréales seront les moins touchées. Cet impact minimal attendu sur les céréales découle du risque d'interdiction des exportations de blé par la Russie et le Kazakhstan, en raison de l'augmentation des prix du blé. On peut s'attendre à ce que le bétail, les légumineuses et l'horticulture subissent une baisse plus importante des perspectives d’échanges et des revenus. Une menace tout aussi importante à la baisse des revenus de nos partenaires commerciaux réside dans leurs réponses politiques, en particulier l'augmentation potentielle des restrictions à l'importation. Ces mesures peuvent prendre la forme d'inspections plus coûteuses, d'un resserrement des réglementations PSP et de mesures protectionnistes de la part de producteurs nationaux concurrents.

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  • Richard Barichello, 2020. "The COVID‐19 pandemic: Anticipating its effects on Canada's agricultural trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(2), pages 219-224, June.
    • Handle: RePEc:bla:canjag:v:68:y:2020:i:2:p:219-224
    DOI: 10.1111/cjag.12244
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    1. Scott R. Baker & Nicholas Bloom & Steven J. Davis & Stephen J. Terry, 2020. "COVID-Induced Economic Uncertainty," NBER Working Papers 26983, National Bureau of Economic Research, Inc.
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    2. Yury B. Melnikov & Egor Skvortsov & Natalia Ziablitckaia & Alexander Kurdyumov, 2022. "Modeling of Territorial and Managerial Aspects of Robotization of Agriculture in Russia," Mathematics, MDPI, vol. 10(14), pages 1-17, July.
    3. Ezeaku, Hillary & Asongu, Simplice & Nnanna, Joseph, 2020. "Volatility of International Commodity Prices in Times of Covid-19: Effects of Oil Supply and Global Demand Shocks," MPRA Paper 107544, University Library of Munich, Germany.
    4. Dionysis Bochtis & Lefteris Benos & Maria Lampridi & Vasso Marinoudi & Simon Pearson & Claus G. Sørensen, 2020. "Agricultural Workforce Crisis in Light of the COVID-19 Pandemic," Sustainability, MDPI, vol. 12(19), pages 1-13, October.
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    7. Richard Barichello, 2021. "Revisiting the effects of the COVID‐19 pandemic on Canada's agricultural trade: The surprising case of an agricultural export boom," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(2), pages 251-260, June.
    8. May T. Yeung & William A. Kerr, 2021. "Canadian Agri-Food Export Opportunities in a Covid-19 World," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 14(5), February.
    9. Ezeaku, Hillary & Asongu, Simplice, 2020. "Covid-19 and Cacophony of coughing: Did International commodity Prices catch influenza?," MPRA Paper 107094, University Library of Munich, Germany.
    10. Xinyue Lin & Lingli Qi & Haoran Pan & Basil Sharp, 2022. "COVID-19 Pandemic, Technological Progress and Food Security Based on a Dynamic CGE Model," Sustainability, MDPI, vol. 14(3), pages 1-18, February.
    11. Ziming Bai & Chenyang Liu & Hongye Wang & Cuixia Li, 2023. "Evolution Characteristics and Influencing Factors of Global Dairy Trade," Sustainability, MDPI, vol. 15(2), pages 1-20, January.
    12. Meuwissen, M.P.M. & Feindt, P.H. & Slijper, T. & Spiegel, A. & Finger, R. & de Mey, Y. & Paas, W. & Termeer, K.J.A.M. & Poortvliet, P.M. & Peneva, M. & Urquhart, J. & Vigani, M. & Black, J.E. & Nichol, 2021. "Impact of Covid-19 on farming systems in Europe through the lens of resilience thinking," Agricultural Systems, Elsevier, vol. 191(C).
    13. Kondej, Magdalena, 2022. "Assessment of the Financial Condition of Selected Dairy Cooperatives during the COVID-19 Pandemic," Problems of World Agriculture / Problemy Rolnictwa Światowego, Warsaw University of Life Sciences, vol. 22(4), December.
    14. Derek Gerald Brewin, 2021. "The impact of COVID‐19 on the grains and oilseeds sector: 12 months later," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(2), pages 197-202, June.
    15. Luciano Gutierrez & Guillaume Pierre & Maria Sabbagh, 2022. "Agricultural Grain Markets in the COVID-19 Crisis, Insights from a GVAR Model," Sustainability, MDPI, vol. 14(16), pages 1-13, August.
    16. Santeramo, Fabio G. & Dominguez, Ignacio Perez, 2021. "On the Effects of the COVID Epidemic on Global and Local Food Access and Availability of Strategic Sectors: Role of Trade and Implications for Policymakers," Commissioned Papers 309037, International Agricultural Trade Research Consortium.
    17. Feng Wang & Min Wu, 2021. "The Impacts of COVID-19 on China’s Economy and Energy in the Context of Trade Protectionism," IJERPH, MDPI, vol. 18(23), pages 1-23, December.
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