Statistics suggest COVID-19 drastically affected small and large-scale businesses. The global market decreased its operations, and the world’s economies had to face the brunt of all inconveniences. The outbreak posed severe challenges to strategists tasked with devising tactics to help businesses continue operations.
According to statistics, Financial Times Stock Exchange 100 Index (FTSE) witnessed a 14.3% drop in 2020, which was the worst performance since 2008. Thus, several countries’ stock markets cut down their interest rates to help economies grow since it encouraged consumer spending.
Similarly, the past year was difficult for job seekers. Most employees lost their jobs because businesses halted their operations. In the United States, unemployment escalated to 8.9%, as explained by the International Monetary Fund (IMF). The IMF states the global economy shrank by 4.4% in 2020, and this decline is considered the worst since the Great Depression of the 1930s. Likewise, the tourism industry also stopped operations as the entire world went into lockdown, forcing millions of employees to lose their jobs and companies to declare bankruptcy. The tourism industry lost billions of dollars last year, and the entire world is said to struggle with similar conditions until 2025.
While COVID-19 has undoubtedly impacted each industry, not much has been stated on its impact on the agricultural industry. Below are some ways in which the agriculture industry has changed since COVD-19 appeared on the world’s stage.
Unemployment
COVID-19 has led the agricultural industry to leave some workers unemployed irrespective of their job level and type. Agronomists, farmers, veterinarians, clerical staff, and even suppliers have been affected based on how a specific business has decided to adapt to the pandemic. The massive dismissal of personnel results from the low demand for services and products, causing significant losses to businesses. Maintaining a staff when the money being spent is more than the money earned is nearly impossible, which leads to workers quitting or being downsized.
Limited Product Access
Closing international borders because of lockdowns across numerous countries has made it difficult for the agricultural industry to engage in cross-border trading. For instance, if a specific country depends on its neighbors for organic compost, closed borders will delay fertilizer import and export. This has a current outcome in which fields are not fertilized, so crops are left to wilt and die.
Limited product access also means that the businesses might shift strategies to satisfy supply demands. For instance, if a company carried crop boxes with six varieties of crops, they might have to change the box to include just three crops. This can ultimately result in the loss of clients due to changes in the quantity or quality of the product the crop produced.
Lack of Production
Agricultural employees might need to stay at home based on the lockdown measures in a geographical zone. A complete lockdown means that no crop production occurs, resulting in a decreased supply that cannot meet customers’ demands. If the need for a product grows or remains constant, but the supply is just reduced, the product will increase in price, such as the law of supply and demand. Farmers must significantly examine their recent production techniques and adopt new ones during challenging times to meet demand without exorbitantly increasing prices.
Loss of Income
Based on the nature of the agricultural businesses, there is no income when there is no production. This means that employees must find alternate sources of income to meet their own needs. Unfortunately, this is hard to do when lockdowns are in place, and people have been recommended to stay home.
Uncertainty
The pandemic made the future uncertain. Farmers and agriculturalists do not know when borders will be open, and they will be permitted to trade again. When borders reopen, they can only hope customers will support their businesses as they used to since their customers have also been impacted economically by the pandemic. This sort of uncertainty means farmers or agriculturalists must tread lightly and wisely plan for the best and worst possible scenarios.
Conclusion
The pandemic destructively hit the agriculture industry, bringing unemployment, product import and export restriction, lower production rates, waste, loss of income, and uncertainty of the future.
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