The Impact of COVID-19 Policy Response on Food Prices: A Case Study in China

Abstract

The COVID-19 pandemic has threatened human lives and caused an unprecedented impact on the global economy, notably on the global food system. COVID-19 itself and its policy response have severely affected food prices. This paper analyzes the short-term and long-term impacts of COVID-19 cases and policy responses (government response index (GRI), economic support index (ESI), stringency index (SI)) on food prices (Chinese cabbage price (CP), pork price (PP), flour price (FP), rice price (RP)) in China’s major food producing areas and major food selling areas through the autoregressive distribution lag error correction (ARDL-ECM) method and graphical analysis. as the purpose is to provide evidence for food security policy regulation to stabilize food prices and improve the food system’s ability to withstand similar emergencies in the future. This study finds that the short-term impact of COVID-19 policy responses on food prices is larger, while the long-term impact is smaller. The impacts of COVID-19 itself and COVID-19 policy responses on food prices vary by food type and food production and consumption region. For food type, the Chinese cabbage price was most affected by the COVID-19 policy response, followed by pork, and the staple food prices (flour price and rice price) were least affected. For regions, the Chinese cabbage price in food producing areas was more influenced by COVID-19 and the pork price in food selling areas was more influenced by COVID-19. For the single indexes, GRI and SI had uneven effects on different food prices. However, ESI had a significant positive impact on the Chinese cabbage price (CP) and pork price(PP), except in Guangdong and Hubei. Staple food prices were almost unaffected by COVID-19 confirmed cases and policy responses. Then, taking the Chinese cabbage price in Beijing, Shandong, and Hubei as an example, we find that “dynamic clearance” influenced the Chinese cabbage price in the short term, and Chinese cabbage price increased largely in the first stage. Finally, the reasons behind the research results of this paper are analyzed, and scientific suggestions are put forward for the implementation of food supply policies to ensure food price stability and food security in the face of similar pandemics in the future.