Abstract
The aim of the study was to assess the economic impact of the Coronavirus on the production and distribution of livestock across the value chain approach in the case of Kellem Wollega Zone, Oromia National Regional State, Ethiopia, based on a total survey of 320 farmers. Descriptive statistics were used to present the effects of the pandemic on the marketing and consumption of major crop production and dairy products in the study areas. Survey result indicated that about 160 small holder farmers those involved in agriculture in the study areas were impacted by COVID-19 crises because the revenue of the farmer were close to down from 25 per cent to 50 per cent. The survey results also indicated that more than 37 per cent of the sample households in the study area affected by the COVID-19 crisis on workforce reduced consumer confidence. Lower demand in virus-affected states across the world will be transferred down the value chain, affecting demand and production levels at each stage, even in areas not directly affected by the virus. It seems that logistical issues linked to the COVID-19 crisis are creating extra costs in the coffee marketing system. Logistical and administrative issues regarding to the COVID-19 during the production time in the study areas were very low to providing service particularly input and fertilizer for the farmers on the time. Therefore, this study recommends that both fiscal and monetary policy instruments introduced by the government to fight the pandemic shall be continued, enforced and implemented in a coordinated way to support the effectiveness of interventions until the economy recovers.
Introduction
The coronavirus pandemic is global health crisis of our time and the greatest challenge the world has faced since the Second World War. Since its emergence in Asia late last year, the virus has spread to every continent except Antarctica. Cases are rising daily in Africa, the Americas and Europe. Long before the pandemic started sweeping the world, its analysis can be used to assess the likely COVID-19 impacts (World Bank 2020).
On 12 January 2020, the World Health Organization (WHO) confirmed that a novel coronavirus was the cause of a respiratory illness in a cluster of people in Wuhan City, Hubei Province, China, which was reported to the WHO on 31 December 2019. On 13 March, the first COVID-19 case was confirmed in Ethiopia. Three days later, the government closed schools, banned all public gatherings and sporting activities and recommended social distancing. Other measures to contain the spread of the virus soon followed. Travellers from abroad were put into a 14-day mandatory quarantine, bars were closed until further notice and travel through land borders was prohibited. Several regional governments banned all public transportation and imposed restrictions on other vehicle movement between cities and rural areas. On 8 April 2020, the Council of Ministers declared a 5-month long state of emergency in response to the growing number of coronavirus cases. The state of emergency was approved on 10 April by the parliament (ILO 2020).
Currently, it is spurring dramatic changes to economic, healthcare, transportation, agricultural production, input supply to agriculture, local and global trade and education systems around the world. No less important is the potential for COVID-19 to impact local and global food systems and their ability to provide safe, affordable and nutritious food as well as sufficient incomes for people working in food and agriculture sectors. As the COVID-19 pandemic is still evolving, it is difficult to know the geographic reach and degree of impact we can expect to see across food production and distribution systems in Ethiopia as well as the whole world (World Bank 2020).
Early estimates predicated that, should the virus become a global pandemic, most major economies will lose at least 2.4 per cent of the value their gross domestic product (GDP) over 2020, leading economists to already reduce their 2020 forecasts of global economic growth down from around 3.0 per cent to 2.4 per cent. To put this number in perspective, global GDP was estimated at around US$86.6 trillion in 2019—meaning that just a 0.4 per cent drop in economic growth amounts to almost US$3.5 trillion is lost economic output (World Bank 2020).
According to Geda (2020) the pandemic is estimated to reduce GDP by 11.1 per cent in the fiscal year 2020–21. This shock will be felt most in the industrial sector which is expected to decline by 17 per cent. This will be followed by the services sector, expected to decline by 15.6 per cent. The agricultural sector is expected to be the least affected as it is projected to decline by only 1.6 per cent. To our opinion, the agricultural sector being biological, labour intensive and time bounded and backward in Ethiopia, cannot be resilient to the strong hit of the virus and may be the first victim if the pandemic spreads in the rural area. The virus attacks the human factor or labour which is the dominant input of the Ethiopian agriculture. The same author at 9 per cent economic growth for the fiscal year of 2019–20 or a GDP of 2,043.411 billion birr, at 11 per cent decline in the growth rate computed the reduction in GDP level will be 227 billion birr (Geda 2020).
The government of Ethiopia is responding to the pandemic on multiple fronts. Capacities for testing and treatment are being built. Arrivals from abroad are required to stay isolated for 14 days in designated hotels. Social (or more appropriately physical) distancing is highly encouraged. Schools and universities are closed. Most government offices are manned by a fraction of their staff with the rest working from home as much as practicable (FAO 2020).
The general objective of this study is, therefore, to investigate the obstacles to input supply and agricultural production/at the farm level/and the flow of products from the point of production to point of consumption/value creation. (This is the industry value chain analysis, which includes all of the value-creating activities within the whole industry, beginning with the basic raw material and ending with the after-sales service of the product sold.) The study extends from materials input, work-in-process/field operation/and finished goods/farm output/distribution or transport to the ultimate user of the products. Therefore, this study is holistic to identify the problems of farm industry along its channels from input supply to the ultimate consumer. The study specifically focused to identify the probabilistic fallout of expected farm revenue from farm gate price through end markets as the result of the/lockdown/outbreak/fear of the pandemic, to identify the availability of farm inputs (farm labour, agrichemicals, etc.) and wastage following the lockdown/outbreak/fear of the pandemic and to calculate the economic loss to the agricultural sector due to lockdowns/outbreak/fear of the pandemic along the selected market channels in the study areas.
Literature Review
Theoretical Review
According to (World Bank 2020), the economic impact of the COVID-19 pandemic is staggering. The pandemic is estimated to reduce GDP by 11.1 per cent in the fiscal year 2020–21. This shock will be felt most in the industrial sector which is expected to decline by 17 per cent. This will be followed by the services sector, expected to decline by 15.6 per cent. The agricultural sector is expected to be the least affected as it is projected to decline by only 1.6 per cent. The government projects a growth figure of 9 per cent for the fiscal year 2019–20 or a GDP of 2,043.411 billion birr. The effect of the 11 per cent decline in the growth rate is equivalent to reduce such GDP level by 227 billion birr. In the event of the best-case scenario, the effect being limited just to the first quarter of the new fiscal year and, hence, a 5.6 per cent decline in GDP, this will be 114 billion birr for this amount of GDP.
According to (Geda 2020), a strong focus on the agricultural sector with the aim of increasing food production to an unprecedented level is a key policy imperative. Increased effort on the agricultural front would not only greatly reduce the contraction in GDP but also minimise the potential deficit in food supply and export revenues. Creating a food bank to withstand the likely food shortages across regional capitals and Addis Ababa as a complementary political and policy intervention deserves special consideration. Boosting food production and food imports is also crucially important to ensure macroeconomic stability, especially during this trying time. A recent empirical analysis I did on inflation in Ethiopia shows that a 10 per cent rise in domestic food production would lead to a significant 26 per cent reduction of general prices. The converse is also generally true.
According to (IATA 2020), tourism, an important sector of economic activity for many countries in Africa, will be heavily affected by COVID-19 with the generalisation of travel restrictions, closing of borders and social distancing. IATA estimates the economic contribution of the air transport industry in Africa at US$ 55.8 billion, supporting 6.2 million jobs and contributing 2.6 per cent of GDP. These restrictions affect international airlines including African giants Ethiopian Airlines, Egyptair, Kenya Airways, South African Airways, etc. The first effects will result in the partial unemployment of airlines staff and equipment. However, in normal times, airlines transport around 35 per cent of world trade, and each job in air transport supports 24 others in the travel and tourism value chain, which creates around 70 million jobs (IATA 2020).
A communiqué from IATA indicated that ‘international bookings in Africa declined about 20 per cent in March and April, domestic bookings declined about 15 per cent in March and 25 per cent in April. According to the latest data, that Ticket refunds increased by 75 per cent in 2020 compared to the same period in 2019 (1 February to 11 March)’. According to the same data, African airlines have already lost US$4.4 billion in revenue by 11 March 2020 due to COVID-19. Ethiopian Airlines has indicated a loss of $190 million (IATA 2020).
Since 2006, tax revenues have increased significantly in absolute terms, as African countries have been growing wealthier. Tax revenues increased in absolute terms. The greatest source of tax revenues was tax on goods and services, which accounted for 53.7 per cent of total tax revenues on average in 2017 with VAT alone representing 29.4 per cent. Tax-to-GDP ratio ranged from 5.7 per cent in Nigeria to 31.5 per cent in the Seychelles in 2017. Only Seychelles, Tunisia, South Africa and Morocco had tax-to-GDP ratio above 25 per cent while the majority of African countries are falling between 11.0 per cent and 21.0 per cent. The average tax-to-GDP ratio of 17.2 per cent is too low (as compared to Latin American countries (22.8% and OECD countries (34.2%) (AU/OECD/ATAF, 2019) to finance the basic social services in particular healthcare with the high probability of spread of the COVID-19 in Africa. Overall Africa could lose up to 20 per cent–30 per cent of its fiscal revenue, which is estimated at 500 billion in 2019. Governments will have no option than to rely on international markets which may increase countries debt levels. Debt should be used for productive investment or growth-enhancing investments rather than maintaining their spending plans.
According to World Bank (2020), there is a high probability that many countries could face an implosion in the stock of external debt and servicing costs due to the increase in fiscal deficits as more emphasis will be put to fulfilling social needs including healthcare systems, socio-economic stimulus to householders, small- and mid-size enterprises (SMEs) and enterprises. Yet one-third of African countries are already or about to be at high risk as a result of recent sharp increase of debt levels owing to favourable international (rise of bilateral donors and the non-residents subscriptions to nationally issued bonds on the African market). Debt in many African countries is on concessional terms and multilateral institutions have no other choice than to help countries to secure even easier terms. However, countries with commercial debt from emerging economies will need to refinance in the current economic crisis. According to EIU Views wire (2020), credit default swap rates on 5-year sovereign issues have increased (Angola’s by 408% year on year in late March, Nigeria’s by 270 per cent and South Africa’s by 101 per cent.
According to IATA (2020), the trend is particularly worrisome since fiscal policy in African countries is highly pro-cyclical, meaning that spending increases in the good times but falls in the bad. Public spending will be affected due to the scarcity of resources that the COVID-19 crisis will create. Spending in infrastructural development could drop by at least 25 per cent due to lower tax revenues and difficulty in mobilising external resources. Government expenditure of African countries represent 19 per cent of the continent’s GDP and contributes 20 per cent to annual economic growth. Public spending in Africa is dominated by spending on health, education and defence and security. These three areas represent more than 70 per cent of public spending. Government spending to healthcare system is expected to increase in order to contain the spread of COVID-19 and limit the impact on the economy. As a reminder, Ebola claimed 11,300 lives and World Bank estimated an economic loss of $2.8 billion, yet the virus hit only Central and Western Africa.
Research Methodology
Description of the Study Area
The study was conducted in three selected woreda’s (Dalle Sedi, Jimma Horo and Hawa Galan) of Kellem Wollega Zone, South western Ethiopia which are described as follows (Figure 1). Dalle Sedi district is located in south-western Ethiopia in Oromia region at 550 km away from the capital city of the country to west. It lies at latitude of 8°52’51" N and longitude 35°13’18" E and altitude of 1,515 m above sea level. It has a warm humid climate with average minimum and maximum temperature of 14°C and 30°C, respectively (Dale Sedi Agriculture Office Annual Report, 2017). The area receives average annual rain fall of 1,000 mm and its distribution pattern is uni-modal.
Map of the Study Area
Jimma Horo is located at about 665 km west of Addis Ababa. The area is located at an elevation of 1,400–1,830 m above sea level. The climatic condition alternates with long summer rain fall (June to September), short rainy season (March to May) and winter dry season (December to February). The minimum and maximum annual rainfall and daily temperature range from 800 to 1,200 mm and 15 to 25°C, respectively (Jimma Horo Agriculture and Natural Resource Office, 2018).
Hawa Gelan is located 623 km from Addis Ababa in west direction. The minimum and maximum temperature is 19 and 25°C, respectively, with the average annual rain fall which ranges from 500 to 900 mm. The woreda is located geographically between 701 and 2,204 m asl., which ranges from low land to high land. It is also known by mixed agriculture (crop production and raring animals) (Hawa Galan Woreda Agriculture and Natural Resource Office, 2018).
Source of Data
Both primary and secondary data was investigated for the purpose of this study. Quantitative and qualitative data was collected from individual households through pretested interview schedule and focus group discussion. Primary data sources were smallholder farmers, assembler, cooperative, union, wholesalers and exporters from three purposely selected kebeles. Secondary data will also be collected through review of materials published sources such as International Food Policy Research Institute (IFPRI), Food and Agriculture Organization of the United Nations (FAO), World Food Organization (WFO), International Livestock Research Institute (ILRI), World Bank (WB), United Nations Office for the Coordination of Humanitarian Affairs (OCHA), World Health Organization (WHO) and Ethiopian Economic Association (EEA).
Sampling Technique and Sample Size Determination
Four-stage sampling techniques were selected for this study. In the first stage, Kellem Wollega was selected purposely in the west for the study. In the second stages, three districts out of 11 districts were purposely selected from the zone. In the third stage, with the consultation of woreda agricultural experts and development agents, three kebeles having potential for selected crop and livestock, were purposively selected based on the high production of the kebeles. In the fourth stage, 320 respondents were determined by ungrouped one stage random likelihood sampling method (Yamane 1967). 1 Accordingly, 30 collectors, 20 wholesalers, 10 retailers, 10 processors and 5 exporters were selected. In total, 60 traders and 10 processors will be selected starting from study area to regional and national level.
Methods of Data Analysis
Descriptive statistics like tables, percentage, mean, minimum and maximum standard deviation were used to present the COVID-19 on the major crop production and livestock products and to identify the possible short-run and long-term effects of COVID-19 on the marketing and consumption of major crop production and dairy products in the study areas.
Analysis of Value Chain Approach
Value chain approach is a systemic analysis tool that looks at how opportunities deriving from end markets can drive a sequential chain of value-adding activities, from production of raw materials to sales of final products to consumers. The approach goes beyond the analysis of individual actors to examine the nature of horizontal and vertical linkages and their governance mechanism. Linkages are depicted in a value chain map with some indications on the numbers of agents, product-flow values and volumes and key points of leverage. The latter are points in the system at which many actors connect or through which high volumes of product flow (e.g., a large processor, a geographic cluster) or that affect the value chain as a whole (e.g., policy). The analysis starts from understanding the characteristics and requirements of end markets in order to identify real market opportunities as well as the performance gaps within the value chain with regards to meeting those requirements (Porter 1985).
Result and Discussion
Demographic and Socio-economic Characteristics of Sample Producers Under COVID-19
Tables 1 and 2 present the demographic and socio-economic characteristics of the sample households under COVID-19. The total sample size of the producer households interviewed during the survey was 320. Out of 320 producer households, male and female households were 224 and 96, respectively. From the result of survey data, the education levels of the households 10 per cent, 37.5 per cent, 37.5 per cent, 12.5 per cent, 2.5 per cent were no formal education, 6th grade or less, 7th grade to 12th grade, certificate and diploma, respectively. This revealed that large per cent of household were under primary school and read and write with equivalent perception for COVID-19. Average age of household head was 38.07 years; dominated by younger heads that encourage crop production and livestock participation decision of farmers on the behalf of COVID-19. The maximum and minimum family size of the respondents was 8 and 2, respectively.
Thus, average family sizes of sample producers during survey were 5.02. Further, the result reveals that the major income sources of the farmers are crop-livestock and crop production which account 99.2 per cent and 0.8 per cent, respectively. Survey result indicates that about 70 per cent of respondents own land. That means, only 12 per cent of sampled farmers rent this land from someone else.
Demographic and Socio-economic Characteristics of Sample Producers (Categorical Variables) Under COVID-19.
Demographic and Socio-economic Characteristics of Sample Producers (Continuous Variables) Under COVID-19.
Gross Margin Loss due to COVID-19 on Crop and Livestock Value Chains in the Study Areas
According to Geda (2020), COVID-19 is likely to impact a wide range of value chains and activities within them. Survey result indicated that about 160 sample household in the study areas were agriculture impacted by COVID-19 crises and revenue close to down from 25 per cent to 50 per cent (Table 3) impact on their livelihood activity caused by the wider economic slowdown setting in. As countries implement lockdowns and factory shutdowns, demand from both consumers and businesses slumps for the duration of the lockdown.
Gross Margin Crop and Livestock Loss.
The result also indicated that about 120 sample households in the study area impacted by the COVID-19 crisis on workforce reduced from 25 per cent to 50 per cent due to restriction of movement to contain the pandemic. Measures affecting the free movement of people, such as seasonal workers, might have an impact on food production in the study areas. According to the survey result, agriculture labour force shortage in fear of the disease and because of illness could significantly affect the production of crops and livestock in the study areas. Such restriction of movement impedes many labourers not to move to their places of work or carry out their jobs (ILO 2020). In response to the restriction on travel and gatherings, these workers are increasingly returning to their villages.
According to (ILO 2020), the survey results also indicated that more than 37 per cent of sample households in the study area impacted by the COVID-19 crisis on workforce reduced consumer confidence, lower demand in virus-affected farmer across the regional will be transferred down the value chain, affecting demand and production levels at each stage, even in areas not directly affected by the virus. Demand impacts are likely to vary strongly across sectors (e.g., demand for agricultural products is likely to fall less than demand for seasonal garments) and the number of employees affected is also strongly mediated by the degree of labour-intensive stages in the production process. As movement restrictions increase and reduce the availability of the agricultural sector, in particular, it may face sharp demand increases for zonal or regional produce.
Availability of Agricultural Inputs and Distributions (Crop and Livestock) Under COVID-19
According to (ILO 2020), in the study areas more than 60 per cent of sample households were using fertiliser, whereas the remaining 27.5 per cent and 12.5 per cent were using seeds and pesticides as input to increase agricultural production and productivity during period of production season under COVID-19. The study indicated that application range of agricultural packages and inputs including appropriate use of fertiliser and improved seeds, judicious use of pesticides and improved agronomic practices are required to increase agricultural production under the line of COVID-19. Smallholder farmers rely on primary cooperatives, cooperative unions and, most significantly, informal markets to access agricultural inputs (ILO 2020).
In the study areas, fertiliser and high-yield variety of crops are the most important technologies to increase crop production. According to the survey result, shortage of farm inputs such as improved seeds, fertilisers, pesticides and other inputs, as well as movement restrictions may adversely affect the sector in the line of supply side. Accordingly, the numbers are limited, commercial farms may also reduce their employees because of COVID-19 pandemic implementing ‘social distancing’ on their part. Consequently, both demand and supply factors will adversely affect agricultural production levels sooner or later ultimately leading to layoffs to some extent in some agricultural activities (Geda 2020).
Input Used by Smallholder Farmer Under COVID-19.
Preventive Measures Taken by the Smallholder Farmer Against the COVID-19
In the study areas, more than 50 per cent sample households were informing workers on preventive measures against the COVID-19, particularly on transmission and prevention of the virus during the period of production. According to Table 5, efforts taken by the smallholder farmer to contain the spread of the disease through the period of production were stay at home (7.5%), social distancing (12.5%), informing workers on COVID-19 transmission and prevention (55%) and providing personal protection equipment like masks (12.5%) are strong measurement taken by the smallholder farmer in order to fight COVID-19. In addition, firms that rely on supply chains may be unable to get the required inputs, from the nearest market. It is also important to note that restrictions on the movements of people will interrupt several value chains, availability of food and agricultural products, with a potential impact on prices. These disruptions contribute to a rise in business costs and constitute a negative productivity shock, thereby reducing economic activity.
Preventive Measures Against the COVID-19 in the Study Areas.
Impacts of the COVID-19 Crisis on Crop and Livestock Value Chains in the Study Areas
According to Geda (2020), the agriculture sector has been affected more than 60 per cent by COVID-19 compared to sectors like tourism, construction and transport. In Agriculture, there might be an income shock, if import and distribution of necessary inputs the planting season (especially fertilisers) is disrupted. Other drivers of shocks in agriculture are potential decline exports of key cash crops such as coffee and sesame and decline in the local production of poultry and egg due to compound feed supply limitations in the study areas.
The result also indicated that more than 25 per cent of sample farmers in the study areas are advised to stay at home and about 25 per cent of them were impacted on selling from produce and business firms are lying off their workers. As a result, more than 15 per cent (Table 6) of the sample household in the study areas were impacted on daily wages since labourer is also reducing their effort with many forced layoff days. Although the impact of the pandemic on economic activities may differ, almost all sectors and sub-sectors are expected to be negatively impacted by the COVID-19 layoff effects, on the one hand, and workers who lose their jobs spend less, on the other (ILO 2020).
Impacts of the COVID-19 Crisis on Crop and Livestock Value Chains in the Study Areas.
Disruption on Livelihood Activity Smallholder Farmer due to COVID-19.
There is uncertainty on the duration of the pandemic in Ethiopia and worldwide. This implies that recovery may not come as quickly as would be anticipated putting the Ethiopian economy closer to the severe scenario rather than the mild case. Government support is much needed not only by increasing its spending under the COVID-19 response plan, but by creating an enabling environment that would allow businesses to thrive and social safety nets to share the burden.
As the Consequent of the Pandemic/COVID-19 Outbreak, to Which Value Chain Analysis Actors and to Whom Smallholder Farmer Sell Their Products
According to the ILO (2020), rural farmers were vulnerable due to low average incomes, a lack of protection and seasonal or climate-related disturbances; they were particularly at a risk of losing their livelihoods due to falling consumption and constricted access to markets and inputs. The study result indicates that farmers and traders are also exposed to significant health risks if lockdowns are lifted, given the scarcity and poor quality of sanitation and healthcare infrastructure. As a result, there is a very short market channel forming a trade-off between disease and starvation, which supports the need for greater testing and information around risk.
In the study areas, a number of actors across value chains, starting from input supply to final consumers, have been subject to crises. Particularly, the rural poor are even more affected than the non-rural poor. The poor might be relying on seasonal activities (ploughing, weeding, harvesting, loading, etc.) for their livelihoods in addition to crop and livestock production. Following the relatively bigger negative impact of the shock on the agriculture sector, as expected, land and unskilled labour are more severely affected.
Value Chain Actors and to Whom Smallholder Farmer Sell Their Products.
Table 8 indicated that, because of the COVID-19 only 5 per cent of wholesaler and 2.5 per cent of cooperative in the study areas of collectors were directly buy product from producers and resell to processor and exporters, respectively. Studies indicated that wholesaler are with a better economic status are more vulnerable to rising rates of chronic illness from the COVID-19 further complicated by economic and social welfare hardships (ILO 2020). Most exports have limited domestic market potential. The government imposes price restrictions on some export commodities to avoid the under-invoicing of exports.
Impacts of the COVID-19 Crisis on Coffee Value Chains in Ethiopia
Coffee exporters’ warehouses are normally full, and exporters are busy purchasing, cleaning and processing and doing deals for exporting. However, due to the COVID-19 crisis, there is significantly less trade taking place compared to previous years. A number of exporters reported they sit idle and while they could lay off the daily labourers; they are, however, obliged to pay their permanent employees (as required under the recent state of emergency) and also bear other costs, often linked to longer storage. However, not only COVID-19 issues are causing delays in sales. The Ethiopian Coffee and Tea Authority (ECTA) has imposed minimum prices this year, contributing to delays in sales as the ECTA minimum price might have been set too high initially and exporters are waiting for an adjustment in this minimum price.
It seems that logistical issues linked to the COVID-19 crisis are creating extra costs in the coffee marketing system. The logistical and administrative issues mentioned in our stakeholders’ interviews schedules. Coffee prices in Ethiopian markets have not been in complete sync with international prices due to a number of reasons, most importantly due to exchange rate policies and foreign exchange shortages and lack of liquidity at banks in the beginning of the year. These disruptions have especially started in the middle of last year. However, movements up or down in international markets are usually followed after a lag of a month on the Ethiopian Commodity Exchange (ECX) platform.
Due to the reduced local and export demand, compounded with global uncertainty, export prices and trading activity are on the decline in Ethiopia. Some traders active at the ECX stated that there are fewer orders from importing countries. Even for the existing orders, the two shipment dates are often extended by mutual consent between exporting and importing (from Ethiopia) companies. Moreover, it has also been reported that some importing firms in Western countries are hesitating to honour the contract. Other Western importers, on the other hand, often demand more urgent shipments. As a support to exporters, the Ethiopian government has waived fines and costs associated with ‘Letter of Credit’—such letters are widely used in international trade to assure an economic guarantee from a bank to an exporter—contract extensions.
Conclusion and Recommendations
This study was aimed at assessing the economic impact of the Coronavirus on the production and distribution of livestock across the value chain approach on the case of Kellem Wollega Zone, Oromia National Regional State, Ethiopia, based on the total survey of 320 farmers. The study specifically focused on identifying the probabilistic fallout of the expected farm revenue from farm gate prices through end markets as a result of the lockdown/outbreak/fear of the pandemic to identify the availability of farm inputs (farm labour, agrichemicals, etc.) and wastage following the lockdown/outbreak/fear of the pandemic and to calculate the economic losses to the agricultural sector due to lockdowns/outbreak/fear of the pandemic along the selected market channels in the study areas. Three-stage sampling was used to select the survey keble and respondents. Descriptive statistics, such as tables and percentage, were used to identify possible short-run and long-term effects of COVID-19 on the marketing and consumption of major crop production and dairy products in the study areas. According to the finding of study, the agriculture sector has been affected more than 60 per cent by COVID-19 compared to sectors such as tourism, construction and transport.
The result also indicated that more than 25 per cent of sample farmers in the study areas are advised to stay at home and about 25 per cent of them have had an impact on the sale of their products and business firms are laying off their workers. COVID-19 delivers a number of shocks in a single package, namely health, supply, demand and financial shocks. The supply-side impact of the pandemic on the economy is through the loss of labour inputs due to social distancing, movement restrictions, homestay, sickness and disruption in production. Therefore, this study recommends that both fiscal and monetary policy instruments introduced by the government to fight the pandemic shall be continued, enforced and implemented in a coordinated way to support the effectiveness of interventions until the economy recovers. Assessments to find out the impact and contingency planning to support the impacted livelihoods should continue. Support contextualised agri-based initiatives that mitigate the impact of COVID-19 from disrupting crop and livestock value chain and associated livelihoods of the smallholder farmers.
Footnotes
Acknowledgements
The authors would like to thank for Dambi Dollo University to support for grant funding to this research. The second also thank for all data collectors and farmer’s informants in the study areas really, deserve special acknowledgement for their cooperation and willingness to answer the interview questions and share a rewarding experience for support to conduct research and writing this article.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The authors received no financial support for the research, authorship and/or publication of this article.
