The Zoonotic diseases, agricultural production, and impact channels: Evidence from China.

ABSTRACT

The outbreak and wide spread of COVID-19 poses a new threat to global food security. This paper aims to address two important policy related issues, that is which agricultural subsector suffers more under zoonotic diseases and how do zoonotic diseases affect these subsectors. Using provincial panel data of 24 main farm commodities in China from 2002 to 2017, this paper identifies the impacts of zoonotic diseases and projects the potential disruption of COVID-19 to agricultural output in China under three scenarios. The main findings are as follows. First, zoonotic diseases have adverse impacts on almost all the farm commodities, while livestock on average suffers more than crops. Second, zoonotic diseases affect these subsectors mainly through the channel of adverse shocks on total factor productivity (TFP). Third, while a few subsectors can find a way to offset part of the TFP loss by applying more input, most subsectors suffer from both input reduction and TFP loss. Fourth, the spread of COVID-19 is projected to lower the growth rates of China's crop and livestock sector by 1.1%-2.3% and 1.3%-2.6%, with TFP loss by 1.1%-2.0% and 1.4%-2.7%, respectively, in 2020. This paper then discusses several policy implications for mitigating the negative impacts of COVID-19 on agricultural production in China and elsewhere.