Анализ глобальных цепочек добавленной стоимости агропродуктовой отрасли в условиях ковид-кризиса / Analysis of Global Value Chains in agro-food industry in the context of COVID-19 crisis
Аннотация
The COVID-19 pandemic has been a major shock to the global economy and has severely affected the agro-food industry, which encompasses agriculture, food processing and distribution. The pandemic has disrupted the functioning of global value chains (GVCs) in the agro-food industry, which are complex networks of production and trade that span multiple countries and sectors. Understanding the impact of the pandemic on GVCs in the agro-food industry is crucial for assessing the challenges and opportunities for resilience and recovery.
This topic is highly relevant for several reasons. First, the agro-food industry is a key driver of global trade, food security and economic growth. According to the OECD, trade in agro-food products has grown strongly over the last two decades, reaching almost 7% in real terms annually between 2001 and 2019. The agro-food industry also contributes significantly to employment, GDP and trade flows in many countries, especially developing ones. Analyzing GVCs allows us to capture the economic significance of the agro-food industry and its linkages with other sectors of the economy. Such insights are essential for policymakers and stakeholders to make informed decisions that support the development of the industry.
Second, the pandemic has exposed vulnerabilities and risks within GVCs in the agro-food industry, such as dependence on a few suppliers or markets, lack of diversification or flexibility, and weak governance or coordination mechanisms. These vulnerabilities have resulted in supply shortages, price volatility, trade restrictions and increased costs for producers and consumers.
Third, the pandemic has altered global trade patterns and demand and supply dynamics within the agro-food industry. According to FAO, the pandemic has led to shifts in sourcing, production and distribution strategies within GVCs, as well as changes in consumer preferences and behavior. For example, some countries have increased their domestic production or diversified their suppliers to reduce their reliance on imports, while some consumers have shifted to online shopping or local products to cope with lockdown measures or health concerns. Analyzing GVCs provides insights into these changing trade patterns and their implications for market opportunities and competitiveness. This knowledge is valuable for businesses seeking to adapt to new market conditions and consumer demands.
Lastly, the agro-food industry faces increasing pressure to adopt sustainable practices and reduce its environmental impact. The agro-food industry is a major contributor to greenhouse gas emissions, water use, land degradation and biodiversity loss. GVCs can amplify or mitigate these environmental effects depending on how they are organized and managed. GVC analysis sheds light on the environmental consequences associated with different stages of the value chain, enabling the identification of opportunities for a greener and more resilient industry.
The aim of this work is to analyze the changes in global value chains (GVCs) in the agri-food sector during the COVID-19 crisis and to propose measures to improve GVCs for overcoming the negative situation.
The following tasks were completed in this scientific work. It explains the concept and nature of GVCs, shows their impact on the national economy and assesses the economic effects of participation in GVCs. It also analyses the concept and consequences of the COVID-19 crisis, assesses how the crisis affected GVCs in the agri-food sector, and develops measures to reduce the negative impact of the crisis and increase the resilience, flexibility, cooperation, coordination, social responsibility and environmental standards of GVCs. Finally, it analyses forms of social responsibility of producers in GVCs in the agri-food sector.
This scientific paper proposed a methodology of our research on the impact of COVID-19 pandemic on the global agri-food sector and its actors. We examine various aspects of this impact, such as global food exports, value added in the agri-food sector, the share of global agricultural supply chains in the sector’s turnover, the dynamics of vegetable oil prices, Russia’s participation in global value chains in agri-food industry, the openness index of the economy, trends in robotization and social responsibility of companies in the agri-food sector. We also develop recommendations for reducing the negative impact of the crisis on the development of GVCs in the agri-food sector. The following methods were used: literature review using online databases Elicit and Google Scholar; economic and statistical analysis of official data from Rosstat, Rosselkhozbank, Worldbank and UNCTAD on global food exports, value added in the agri-food sector, the share of GVCs in the sector’s turnover, and the openness index of the economy; comparative analysis of data by different countries, regions, and time periods; calculation of indicators of self-sufficiency of the country by value added in exports to third countries and foreign value added in Russian exports; study of the dynamics of the global robotics market and specific cases of companies successfully following the trend of robotization; case-study of the financial and economic activity of specific large Russian agroholdings and examples of their social responsibility.
As the result, we identified problems that negatively affect GVCs in the agri-food sector that emerged after the COVID-19 crisis, and developed measures to reduce the negative impact of the COVID-19 crisis on the development of global value chains in the agri-food sector: the problem of expensive logistics is solved by using a multimodal transportation system. The unemployment rate can be reduced by retraining workers, which should be organized by states depending on the type of participation in GVCs. The purchasing power will increase with increasing production rates and reducing the price of elemental components of the product. The growth of global investments can be achieved by outsourcing parts of production processes. These measures together will increase the share of GVCs in global turnover. Also we established that social responsibility of the sector creates competitive advantages in the global market, promotes cooperation and international division of labor: for the fastest and most effective recovery of the sector after global crises similar to pandemic-2020, it is advisable to create international social anti-crisis programs that will be implemented by all participants of GVCs.
This topic is highly relevant for several reasons. First, the agro-food industry is a key driver of global trade, food security and economic growth. According to the OECD, trade in agro-food products has grown strongly over the last two decades, reaching almost 7% in real terms annually between 2001 and 2019. The agro-food industry also contributes significantly to employment, GDP and trade flows in many countries, especially developing ones. Analyzing GVCs allows us to capture the economic significance of the agro-food industry and its linkages with other sectors of the economy. Such insights are essential for policymakers and stakeholders to make informed decisions that support the development of the industry.
Second, the pandemic has exposed vulnerabilities and risks within GVCs in the agro-food industry, such as dependence on a few suppliers or markets, lack of diversification or flexibility, and weak governance or coordination mechanisms. These vulnerabilities have resulted in supply shortages, price volatility, trade restrictions and increased costs for producers and consumers.
Third, the pandemic has altered global trade patterns and demand and supply dynamics within the agro-food industry. According to FAO, the pandemic has led to shifts in sourcing, production and distribution strategies within GVCs, as well as changes in consumer preferences and behavior. For example, some countries have increased their domestic production or diversified their suppliers to reduce their reliance on imports, while some consumers have shifted to online shopping or local products to cope with lockdown measures or health concerns. Analyzing GVCs provides insights into these changing trade patterns and their implications for market opportunities and competitiveness. This knowledge is valuable for businesses seeking to adapt to new market conditions and consumer demands.
Lastly, the agro-food industry faces increasing pressure to adopt sustainable practices and reduce its environmental impact. The agro-food industry is a major contributor to greenhouse gas emissions, water use, land degradation and biodiversity loss. GVCs can amplify or mitigate these environmental effects depending on how they are organized and managed. GVC analysis sheds light on the environmental consequences associated with different stages of the value chain, enabling the identification of opportunities for a greener and more resilient industry.
The aim of this work is to analyze the changes in global value chains (GVCs) in the agri-food sector during the COVID-19 crisis and to propose measures to improve GVCs for overcoming the negative situation.
The following tasks were completed in this scientific work. It explains the concept and nature of GVCs, shows their impact on the national economy and assesses the economic effects of participation in GVCs. It also analyses the concept and consequences of the COVID-19 crisis, assesses how the crisis affected GVCs in the agri-food sector, and develops measures to reduce the negative impact of the crisis and increase the resilience, flexibility, cooperation, coordination, social responsibility and environmental standards of GVCs. Finally, it analyses forms of social responsibility of producers in GVCs in the agri-food sector.
This scientific paper proposed a methodology of our research on the impact of COVID-19 pandemic on the global agri-food sector and its actors. We examine various aspects of this impact, such as global food exports, value added in the agri-food sector, the share of global agricultural supply chains in the sector’s turnover, the dynamics of vegetable oil prices, Russia’s participation in global value chains in agri-food industry, the openness index of the economy, trends in robotization and social responsibility of companies in the agri-food sector. We also develop recommendations for reducing the negative impact of the crisis on the development of GVCs in the agri-food sector. The following methods were used: literature review using online databases Elicit and Google Scholar; economic and statistical analysis of official data from Rosstat, Rosselkhozbank, Worldbank and UNCTAD on global food exports, value added in the agri-food sector, the share of GVCs in the sector’s turnover, and the openness index of the economy; comparative analysis of data by different countries, regions, and time periods; calculation of indicators of self-sufficiency of the country by value added in exports to third countries and foreign value added in Russian exports; study of the dynamics of the global robotics market and specific cases of companies successfully following the trend of robotization; case-study of the financial and economic activity of specific large Russian agroholdings and examples of their social responsibility.
As the result, we identified problems that negatively affect GVCs in the agri-food sector that emerged after the COVID-19 crisis, and developed measures to reduce the negative impact of the COVID-19 crisis on the development of global value chains in the agri-food sector: the problem of expensive logistics is solved by using a multimodal transportation system. The unemployment rate can be reduced by retraining workers, which should be organized by states depending on the type of participation in GVCs. The purchasing power will increase with increasing production rates and reducing the price of elemental components of the product. The growth of global investments can be achieved by outsourcing parts of production processes. These measures together will increase the share of GVCs in global turnover. Also we established that social responsibility of the sector creates competitive advantages in the global market, promotes cooperation and international division of labor: for the fastest and most effective recovery of the sector after global crises similar to pandemic-2020, it is advisable to create international social anti-crisis programs that will be implemented by all participants of GVCs.