Tashkent, Uzbekistan (UzDaily.com) - The COVID-19 pandemic did not significantly destabilize global food markets. However, its consequences pose a certain threat to food security, agriculture and agricultural exports in Central Asia. This conclusion was shared by Sergiy Zorya, the World Bank’s leading agricultural economist, during an online briefing for regional media and the expert community.

The crisis triggered by the coronavirus pandemic, unlike the global food crisis of 2008-2009, has not yet significantly affected international food markets. This is due to the presence of large world grain reserves, as well as stable prices for basic food products, due to the fact that a small number of countries have limited food exports (16 countries as of May 2020 against 33 in 2008).

In Central Asia, the above trends allowed mitigating the negative consequences for food security and agriculture, whose share in the GDP of each country varies: in Kazakhstan - 4.4%, Kyrgyzstan - 11.6%, Tajikistan - 19.2%, Turkmenistan - 20, 0% and Uzbekistan - 28.8%.

However, in the short term (1-3 months), the states of the region may encounter certain difficulties. For example, with price increases for certain types of food and reduced access to vulnerable groups due to lower incomes (on average 40-60% of household expenses in the region are food expenses). Failures in the supply chains of raw materials (seeds and fertilizers) can lead to a delay in agricultural work and adversely affect the future harvest of various crops.

In the medium term (up to 6 months), a decline in domestic food consumption is expected as a result of the economic recession, lower remittances of labor migrants to their families and devaluation of national currencies in the countries of the region. In addition, a decrease in demand for fruits and vegetables from Central Asia in Russia (its main sales market) is expected, where the economic crisis affected the purchasing power of the population. There will also be difficulties in repaying loans from local agricultural producers whose activities have suffered from the introduction of quarantine restrictions.

In the context of the pandemic, the countries of Central Asia took urgent measures to strengthen food security and support the agri-food sector. In particular, the regional governments activated state food reserves and began to increase their reserves, established administrative control over food prices, reduced their cost due to export restrictions and lower tariffs on imported food products. At the same time, the authorities accelerated the removal of restrictions on the transportation of agricultural products and the movement of workers in the industry, and also granted a delay to farmers and agricultural enterprises for paying loans and other benefits that stimulate their activities.

“In 2020, agriculture can become one of the main stabilizing factors and a growth driver for the economies of Central Asia. Moreover, it is able to provide more jobs than any other industry,” said Sergey Zorya.

The expert emphasized that after the pandemic, governments need to focus on restoring agricultural trade in Central Asia, improving regional cooperation in the field of sanitary and phytosanitary safety, managing state food reserves, and increasing investments in veterinary services and digitalization of the agri-food sector.

“Support for agriculture is one of the World Bank’s priorities in Central Asia. Currently, in the region, with our assistance, projects are being implemented for a total amount of about 1.6 billion US dollars. They are aimed at reforming and modernizing agriculture in order to increase its productivity, increase export potential and create new jobs, for example, in the horticulture and livestock sectors, ”said Lilia Burunchuk, World Bank Regional Director for Central Asia.

The World Bank Group is undertaking large-scale and operational actions to help developing countries improve their response to the pandemic. To date, 100 countries of the world, including the countries of Central Asia, have already benefited from this kind of assistance.

So, over the past two months, the World Bank has provided emergency financing in the amount of more than US$370 million to Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan to strengthen national health systems, support economies and provide social protection for vulnerable groups. Together with the governments of the region, the situation is assessed and current projects financed by this international financial institution are studied in order to reorganize and redistribute resources. The World Bank plans to raise additional funds to rebuild the economies of Central Asia.