Hello again from Washington, where baking elaborate Easter cakes is the new drinking wine in your living room, as far as new evening pastimes go.
Twitter over Easter weekend was unusually full of delicious-looking cakes, a lot of them requiring strawberries and raspberries, which were probably picked by seasonal migrant workers, a key part of the food supply chain and the subject of our main piece today. Our person in the news is Gita Gopinath, chief economist at the IMF, while our chart of the day looks at the IMF’s predictions for global growth.
The human cost of picking strawberries
It’s springtime, and thousands of Mexican workers around now would usually be gathering in US consulates en route to harvesting crops on US farms. Coronavirus, with its travel bans and widespread consulate and embassy closures, has made that more difficult.
The prospect of not being able to hire foreign seasonal farm workers — who overwhelmingly come from Mexico — has panicked US farmers, who argue they cannot recruit local hires to do the work. In order to be allowed to fill posts using workers on the H-2A visa, they must prove they’ve tried to do that. If those visas, which are specifically for temporary agricultural workers, are not processed or are processed more slowly, fruits and vegetables ranging from strawberries to lettuce would go unpicked.
In response to the panic, secretary of state Mike Pompeo last month relaxed visa processing rules for the H-2A visas, allowing greater numbers of Mexican labourers to come into the US without an in-person interview.
For now, that has averted disaster. Jason Resnick, of the Western Growers Association, a trade body representing Californian farms, says there have been some delays in processing visas for seasonal workers, simply because consulates are staffed more thinly and are following strict distancing procedures when processing prospective workers.
But anecdotally, farmers say coronavirus has not put off workers from coming. This is both a blessing and a curse. These workers are essential to getting food from the ground to the tables of Americans, and their absence would lead, at least temporarily, to empty supermarket shelves.
Still, even if they can secure a visa, workers are at risk. The H-2A visa programme mandates American farms, which range from small, family run businesses to large corporate enterprises, to provide workers with accommodation. This often takes the form of dormitories, while workers are transported to and from the fields on buses. Each worker must have a minimum of 100 square foot of living space. But even in the best case, workers are in closer quarters with each other than most American labourers.
There are tales of worse cases. The Centro de los Derechos del Migrante, an organisation that seeks to protect the rights of migrant workers, recently issued a report that found nearly half of seasonal agricultural workers said they lived in “overcrowded” or “unsanitary” housing. Workers might be “particularly vulnerable” to exposure to coronavirus as a result, the report found.
Farmers say extra precautions, such as disinfecting the dormitories more often and only half-filling buses, are being taken. They are also trying to source extra accommodation to use as quarantine houses, whether that’s setting aside existing rooms to be used as isolation chambers, or being prepared to pay for hotel rooms. Some are monitoring the temperatures of their workers.
Even so, seasonal workers are not commonly provided with US health insurance. If they become sick, they’re on their own. The personal cost to them if they fall ill is huge — and includes great financial cost, as well as the physical costs of ill health and the emotional costs of being stuck far from family members, who might get ill themselves. It also, to put it in more economic and less human terms, temporarily removes them from the workforce, thus causing a glitch in the food supply chain.
In a letter to Pompeo in late March, the Agriculture Workforce Coalition — a group representing various agricultural trade bodies — pointed out that “an interruption to the processing of agricultural worker visas will undoubtedly cause a significant disruption to the US food supply”. The same would be true if these workers stopped coming to the US, or became ill in large numbers. For all the animosity towards Mexican workers in US political discourse, the real threat that they might stop coming en masse has exposed the reality: America desperately needs them.
The IMF warned this week that the coronavirus crisis is expected to exact the biggest toll on the global economy since the 1930s Great Depression. It forecast that world output would decline 3 per cent in 2020, 6.3 percentage points down from the growth forecast of 3.3 per cent that it expected as recently as late January. While growth would rebound in 2021, it would still be significantly lower than previously predicted, the IMF said.
Person in the news
Who is it?
Gita Gopinath, chief economist at the IMF
Why are they in the news?
Gopinath forecast that coronavirus will do lasting damage to the global economy, warning that developed countries should expect their economies to be 5 per cent smaller on average in 2021 than the IMF previously predicted. But she said that the lockdowns were necessary to get the pandemic under control. “There is no trade-off between saving lives and saving livelihoods,” she said.
South Korea is chartering flights for business people with factories in foreign countries to help reboot supply chains as a breakdown of the world’s visa and travel systems caused by coronavirus wreaks havoc on multinational operations.
Australia has promised to nurture local manufacturing to ensure it is less reliant on global supply chains after an acute shortage of medical equipment exposed what critics labelled its “dependence” on China.
The heated issue of fishing rights is threatening to stall Brexit talks, as Britain’s lack of detailed proposals on fishing rights increases tensions with the EU just as the two sides seek to restart talks about the future relationship.
The best trade stories from the Nikkei Asian Review
Coronavirus has exposed south-east Asia’s divisions on food security, particularly as rice-growing nations such as Vietnam and Cambodia impose export bans while domestic consumers hoard supplies.
The technology industry’s supply chain faces the risk of a bottleneck in south-east Asia, where Sony and Panasonic are keeping Malaysian factories closed longer than planned.