On June 2nd, the IFPRI Latin America and Caribbean program organized the virtual policy seminar “Food in the Time of Pandemic: Realism Without Magic.” Conducted in Spanish, it was the first general IFPRI event in a language other than English. The event is part of IFPRI’s work in support of the people and governments of the region, with the short-term goal of helping design and implement policies to overcome the COVID-19 pandemic, and, looking ahead into the future, facilitate the necessary transformation of the region’s food systems. These should be more efficient and economically dynamic, inclusive and fair, environmentally sustainable, generating nutritious and healthy diets, and—clearly, given the current conditions—resistant to future pandemics.

The event was moderated by Eugenio Díaz-Bonilla, head of the IFPRI Latin America and Caribbean Program. Speakers included: Valeria Piñeiro (IFPRI Senior Research Coordinator), Pedro Martel (Head of the Division of Environment, Rural Development and Disaster Risk Management, the Inter-American Development Bank (IADB)), Carolina Trivelli (Senior Researcher at the Institute of Peruvian Studies and former Minister of Development and Social Inclusion of Peru), Christian Gomez (Director of Global Government Affairs for Latin America, Walmart) and Rubén Echeverría (President of the Commission on Sustainable Agricultural Intensification, Director General Emeritus of CIAT, and IFPRI Senior Research Fellow).

Díaz-Bonilla mentioned several facts to contextualize the pandemic. First, Latin America and the Caribbean (LAC) plays a central role worldwide in terms of food security (it is the main net food exporting region) and environmental sustainability (its forests constitute a large carbon sink, the region is fundamental for the global cycles of oxygen and water, and is a main biodiversity reserve). Therefore, actions taken in the region with regard to these two issues affect not only its member countries, but the planet. Second, LAC is the developing region with the greatest inequality. Third, whereas malnutrition has decreased significantly (around 7% of the population), rates of obesity and overweight are among  the highest in the world (exceeding 50%). Fourth, it has high urbanization (around 80%), but these cities are some of the most violent in the world (except for cities in countries at war, 42 of the 50 cities with the highest rates of per capita homicides are in LAC). Fifth, about half of employment is in informal activities. Sixth, with the downturn of the commodity cycle in the last decade, the region’s economy has been stagnant; this has affected the vitality of its democracies which must be strengthened.

In the midst of this complex panorama, the novel coronavirus has hit the region hard. According to the Pan American Health Organization (PAHO), the region is now the epicenter of the global pandemic.

Countries have reacted to the pandemic with a variety of measures: First in relation to health issues; second, in strengthening and expanding social protection networks; and third with different measures to preserve production and employment.

Valeria Piñeiro presented estimates of the pandemic made by IFPRI. “The crisis can be analyzed in three phases: impact, transmission and mitigation. At IFPRI we are working to measure the impacts and design mitigation strategies for a quick and efficient recovery,” she said. The impact is linked to sanitary measures that lead to movement and logistics restrictions, food waste, and unemployment. In the transmission stage, greater problems are expected in production chains, with increases in poverty rates and food insecurity. At the global level, the transmission channels of the crisis include reductions in international trade, falling prices of primary products, worsening global financial conditions and declines in tourism. A global recession of 5% will increase the number of extreme poor by almost 150 million worldwide (+ 20%), affecting all regions. Dietary quality is expected to deteriorate as the global consumption of fruits and vegetables falls due to logistics complications and declining income.

Pedro Martel explained the Inter-American Development Bank’s response to the crisis, which includes lines of financing in four areas: health programs; expansion of social safety nets; support to small and medium sized enterprises (SMEs) to maintain production and employment; and budget support to governments. He mentioned that in an IADB survey of about 200,000 people, half have suffered from poverty problems and 40% have had a deterioration in their diets. Other surveys showed that 61% of producers have reported problems with production and sale of their products; 78% suffer from liquidity problems, and 64% are having transportation problems in the first mile (due to problems with small carriers). The danger is the breakdown of payment chains, affecting many small companies that provide services to vulnerable populations.

Martel also analyzed the problems of the Caribbean’s agri-food systems. These countries are affected by declining tourism and trade problems, while an intense 2020 hurricane season is projected.

“Specialists in the agricultural sector need to open their perspective and speak with other areas such as health, transportation, education, and others, so that we learn to work in complex food systems,” he concluded.

Carolina Trivelli commented on the situation in Peru. The country enjoyed a stable economic and social situation, with years of sustained growth, fiscal consolidation, and generation of savings.  However, despite early action, the pandemic has had a strong impact. Peru is among the most affected countries in the region, partly due to its informal economy, which exacerbates contagion problems.

The country’s initial health response was to decree the state of emergency, accompanied by social protection measures to alleviate the economic effects on households. Seventy five percent of Peruvian households have received a monetary transfer of up to $220, and workers have been allowed access to pension funds and savings in the face of unemployment, to alleviate the liquidity problem in families.

Still, in recent polls, half of those surveyed indicated that they are not coping effectively with confinement due to lack of income. “As it is an aggregate crisis, families have little chance of resorting to their traditional means of support, because on the one hand there is no community activity such as soup kitchens or community food places, but neither can family and friends be relied on because they are suffering the same circumstances. Only the state remains as a source of aid,” she said.

The fiscal effort has been enormous (between 12% and 16% of GDP), but that was possible because Peru had the fiscal space thanks to prudent macroeconomic policies in the past, Trivelli said. She estimated that the future context is quite complex, with GDP projected to fall 8%-20% in 2021, and an increase in poverty (especially urban poverty). Recovery may only take place towards 2022. In addition, Trivelli highlighted the need to rethink social protection networks because the negative impact of the pandemic will affect other sectors besides the poorest groups currently served.

Christian Gomez presented a perspective from the private sector, based on the experience of Walmart. This company is present in eight Latin American countries, with some 13,000 stores, of which 5,000 are in Mexico. Eighty percent of Mexican stores have a low-cost format with a more simplified supply. Due to the crisis, they are promoting about 100 low-cost items. Walmart is also helping with the liquidity of its 30,000 suppliers, most of them SMEs, by shortening the payment periods to seven days during April-June.

Regarding food security, Gómez noted that poorly thought-out distinctions between essential and nonessential companies can disrupt the food supply chain and limit citizens’ access to food, particularly the most vulnerable. He also noted that the needs and preferences of customers have changed throughout the crisis, with increases in the demand for electronic equipment and games for children, as well as for personal protection products (the case of sanitary gowns, which Walmart began to produce in Central America to export to the United States).

In addition, he warned that confusion and panic can increase perceptions of scarcity and lead to looting, even when supply chains in Latin America have, so far, proven resilient and have not seen major disruptions. When shortages have occurred (as in the case of some fruits), supply alternatives have been found.

Ruben Echeverría presented his perspective on science, technology and innovation. He highlighted the multisectoral quality of the work that is being carried out in LAC. Previous animal-to-human disease outbreaks, or zoonoses, such as avian influenza, SARS, MERS, and Ebola, have been addressed from the point of view of human health, but this crisis presents an opportunity for those working in animal health to cooperate more in analyzing interactions with humans. This pandemic showed the importance of food traceability, and the need for greater transparency regarding health.

Science and technology systems must innovate with an inclusive vision, he said, accounting for the enormous challenges of poverty, inclusion, malnutrition (in all its forms, including overweight and obesity), climate change and the degradation of ecosystems.

Greater investment in science and technology is needed because zoonoses will occur more often, and to prevent is better than to cure. Many countries in the region do not even invest 1% of agricultural GDP. Obtaining results takes time, he said, adding that he regretted that sometimes scientific work is not prioritized, especially during budget crises.

It is necessary to strengthen internal cooperation within and between countries, Echeverría argued. At the regional level, LAC is very rich in institutional innovation and cooperation mechanisms in agricultural science (such as FONTAGRO). Cooperation between research from universities, international centers, NARIs (National Agricultural Research Institutes), and private companies is necessary.

Finally, Rubén Echeverría highlighted the need to address this health crisis and prevent it from becoming a food crisis. This requires investing in the medium and long term, and now is the time to start doing so.

Díaz Bonilla, closed the event by pointing out that: “What we do as societies and governments in LAC will have enormous consequences for the inhabitants of the region, especially the poorest, marginalized and vulnerable, with whom we have a great outstanding debt, but It will also have fundamental externalities for the rest of the world, in terms of food security, environmental sustainability, migration, and peace and democracy.”

Eugenio Díaz-Bonilla is Head of IFPRI’s Latin-American and Caribbean Program; Florencia Paz is a Research Analyst with IFPRI’s Markets, Trade, and Institutions Division.