The Performance of the Agri-food Sector in the Recent Economic Crisis and during Covid-19 Pandemic

Tamás Mizik

doi:10.28991/hij-2021-02-03-02

Abstract

Crises impact every sector of the economy; however, the magnitude of that impact varies between the different sectors. The agri-food sector-related lessons learned from the last two crises (global financial crisis in 2008, and the sanctions against Russia in 2014) are that international trade becomes lower and commodity prices rise. This article analyzes the performance of the Hungarian agri-food sector during the last three crises based on international and Hungarian datasets. The results show that impacts depend on many factors, such as the type of the agri-food products (raw material vs. processed product, perishable vs. non-perishable goods, etc.) or the depth of trade integration. It should be noted that Hungary is heavily integrated into the EU’s common market, its major trade partners are the other member states. At the commodity level, the share of raw materials is higher on the export side (e.g. cereals) compared to the import side (e.g. meat products). Based on the results, the impacts of the COVID-19 pandemic were different from the two previous crises. Despite the difficulties in transport, Hungarian exportation expanded and resulted in an increasing trade surplus, while international commodity prices remained stable. The identification of the different impacts of the coronavirus compared to the other two crises is the major finding of the article. Doi: 10.28991/HIJ-2021-02-03-02 Full Text: PDF

Highlights

Food security and, mostly in developed countries, food safety are becoming more important
The agri-food sector could contribute to the Net Foreign Exchange (NFE) earnings
Based on the related literature, the common impacts of the last two crises were lower food security and higher prices. These were harmful to the countries with agri-food trade deficits and less developed countries

Summary

Introduction

Mostly in developed countries, food safety are becoming more important. The higher the value-added of the agri-food products is, the higher the amount the NFE could become. The exportation of high value-added products, as well as the importation of raw materials, are key elements of international trade success. As of the last two decades, humanity has faced numerous, agri-food related crises. In the case of global crises, the world financial crisis of 2007-2008, the EU sanctions against Russia in 2014, and the COVID-19 pandemic in 2020 should be mentioned. These crises hit other multiple sectors of the economy. Their impacts were different in the agri-food sector.

Methods

Results

Conclusion