Spillover effects of pandemic crisis to the EU agricultural sector

ABSTRACT

The economic crisis caused by the external shock in the form of the COVID-19 pandemic had the character of a systemic risk affecting all markets in the world. Due to high levels of economic integration, negative spillover effects were inevitable. Indirect effects particularly affected the agricultural sector with simultaneous shocks on the supply and demand side. The research includes an analysis of negative distortions of a macroeconomic nature in order to show in the most adequate way the vital importance of the agricultural sector at the level of the European Union (EU). Given the acute nature of the economic crisis, interventions at the EU level (and in countries) targeting exit strategies have a key role to play. The analysis of the implemented strategies in the EU in 2020 indicates that (a) economic policymakers have minimized the gap in the implementation of measures, by applying generous and prompt programs aimed at the agricultural sector;(b) there is a need to move from urgent rescue programs to "no regrets" programs that can improve the resilience of the agricultural sector to future external shocks in the long run.