Journal of Integrative Agriculture 2020, 19(12): 2866–2876

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ScienceDirect

RESEARCH ARTICLE

Impacts of the COVID-19 pandemic on vegetable production and

countermeasures from an agricultural insurance perspective

GU Hai-ying1, 2, WANG Chang-wei3

1
Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai 200030, P.R.China
2
Institute of Industry Research, Shanghai Jiao Tong University, Shanghai 200030, P.R.China
3
Institute of Finance and Economics, Shanghai University of Finance and Economics, Shanghai 200433, P.R.China

Abstract
In the face of the corona virus disease 2019 (COVID-19) pandemic, it is essential to stabilize the security of urban “shopping
baskets”. Through a survey and interviews with 46 agricultural cooperatives in Shanghai, this paper analyzes the impact of
the pandemic on vegetable production and offers suggestions on agricultural insurance. The research results show that:
(1) the pandemic has impacted almost all stages of the vegetable supply chain but has had a greater impact on the sales
stage; (2) the market risks of vegetable production have increased significantly, and the gap between the field price and the
market price has widened. The sales price difference between traditional channels and e-commerce is notable; (3) farmers’
incomes have generally declined due to the COVID-19 pandemic, and traditional small-scale farmers have suffered more
losses; and (4) agricultural insurance plays an important role in stabilizing the supply of vegetables to the city. To minimize
the impact of the pandemic on vegetable production and to stabilize both urban “shopping baskets” and farmers’ incomes,
it is necessary to further improve agricultural insurance, especially to provide insurance against market risks.

Keywords: COVID-19, vegetable supply chain, agricultural insurance, market risks

2020). To prevent and control the pandemic, China has

1. Introduction
The sudden outbreak of the corona virus disease 2019
(COVID-19) is wreaking havoc on a wide array of health,
economic and social factors (Ali and Alharbi 2020; Kanitkar
Received 18 May, 2020 Accepted 24 September, 2020
GU Hai-ying, E-mail: ghy@sjtu.edu.cn; Correspondence WANG
Chang-wei, Tel: +86-21-65903794, E-mail: wang.changwei@
mail.shufe.edu.cn
© 2020 CAAS. Published by Elsevier Ltd. This is an open
access article under the CC BY-NC-ND license (http://
creativecommons.org/licenses/by-nc-nd/4.0/).
doi: 10.1016/S2095-3119(20)63429-3
adopted a phased policy of self-quarantine, which has had
a serious impact on the production, distribution and sale of
agricultural products (Jiang et al. 2020). For cities, the supply
of vegetables has also been challenged (Zhou 2020). By the
end of 2019, China’s urbanization rate had reached 60.60%,
with an urban population of 848.43 million (NBSC 2020).
Products such as vegetables and fruits are daily necessities
for urban residents. The vegetables supplied to cities come
mainly from two areas: sub-urban rural areas and other
areas outside of cities. To ensure an adequate vegetable
supply in cities, China has adopted a policy in which
mayors are in charge of the “shopping basket program”.
During the pandemic, stabilizing vegetable production and
ensuring farmers’ incomes became important tasks for city
governments. To minimize the impact of the pandemic on
 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
vegetable production, the State Council of China issued a
policy on February 12, 2020: the implementation of mayors’
responsibility for the “shopping basket” to ensure the stable
production and supply of agricultural products. Many cities in
China have also introduced incentives to encourage farmers
to produce vegetables.
Two issues need to be addressed regarding the impacts
of the pandemics on agriculture: one is to ensure the
production and supply of agricultural products, and the
other is to stabilize farmers’ incomes, which in turn affects
the production of agricultural products. The impacts of the
pandemics on agriculture is a risk in agricultural production
and operation, and agricultural insurance is an important
method for managing agricultural risks (Hazell 1992; Zhang
et al. 2019). Since China increased financial subsidies for
agricultural insurance in 2007, agricultural insurance has
developed rapidly in China, with insurance premiums rising
from about 5.18 billion CNY in 2007 to 68 billion CNY in
2019. The total insured amount increased from 112.6 billion
CNY in 2007 to 3.6 trillion CNY in 2019 (Zhang Q Q 2020).
The number of households served by agricultural insurance
increased from 49.81 million in 2007 to 180 million in 2019
(Zhang 2019). China’s agricultural insurance industry is
now ranked second in output value in the world (Tuo 2018).
To stabilize the vegetable supply, many local governments
have supported the development of local vegetable
insurance. For example, Shanghai launched vegetable price
insurance in 2010 and vegetable weather index insurance in
2014, which effectively stimulated farmers’ enthusiasm for
production and stabilized the supply and price of vegetables
(Liu 2016). Agricultural insurance plays an important role in
helping farmers cope with the impacts of the pandemic on
agriculture. Many provinces such as Zhejiang and Hainan
have introduced vegetable price insurance during the period
of the pandemic and subsidized the premium, which has
increased the willingness of vegetable farmers to engage in
production and stabilized the supply of vegetables.
As a large city with a population of more than 20 million,
adequate supplies of agricultural products are of great
significance to Shanghai, especially during pandemic
periods. Although the amount of locally produced agricultural
products in Shanghai is limited, local production plays an
important role in the emergency supply and price stability
of agricultural products. For green leafy vegetables, local
production accounts for more than 80% of the total demand
in Shanghai (Zhou and Jia 2020). During the pandemic,
the Shanghai municipal government and Shanghai Anxin
Agricultural Insurance Company, only one agricultural
insurance company in Shanghai, introduced a series of
measures to minimize the impact of the pandemic. For
example, the government provided more subsidies during
the pandemic period to farmers who grew green leafy
2867
vegetables, and the insurance company increased the
compensation, which weakened the impact of the pandemic
on the supply of produce.
With the spread of the COVID-19 pandemic worldwide,
the impact of the pandemic on agriculture has become
a major issue in current agricultural development.
Studies have analyzed the impact of the pandemic
on agriculture from different aspects (Henry 2020;
Morton 2020). Some studies analyzed the impact of the
pandemic on food security (Pu and Zhong 2020; Zhang
H Y 2020), some studies focused on the impacts of the
pandemic on agricultural supply chains (Gray 2020),
and some studies analyzed the impact of the pandemic
on food safety (Unhale et al. 2020). For example, Uddin
et al. (2020) analyzed the effect of COVID-19 on the food
system, including food safety and food security, in low and
middle income countries. Zhang Y et al. (2020) assessed
the potential economic cost of the COVID-19 pandemic
on China’s macroeconomy and agri-food system and
found that more than 46 million agri-food system workers
(approximately 27% of total employment) lost their jobs
due to COVID-19 in the lockdown phase. Among them,
there are few studies on the impact of the pandemic on the
“shopping basket” of Chinese cities and especially on the
role of agricultural insurance in minimizing the impact of the
pandemic on agriculture (Zhou and Jia 2020). In addition,
agricultural cooperatives have developed rapidly in China in
recent years (Zhang S et al. 2020). Cooperatives not only
improve the efficiency of agricultural production (Ma et al.
2018; Gong and Battese 2019) but also help to control the
quality of agricultural products (Zhou et al. 2016; Ji et al.
2019), and have become important elements of agricultural
production in China. Vegetable cooperatives have also
developed rapidly. Taking Shanghai as an example, there
are nearly a thousand vegetable cooperatives in Shanghai,
and the planting area occupies approximately about 50%
of the total vegetable area in Shanghai (Sun et al. 2015).
Cooperatives are the main service objects of agricultural
insurance. In response to the impact of the pandemic,
cooperatives have also become important subjects of policy
regulation and production supply.
Through a survey and interviews with Shanghai vegetable
cooperatives, this study investigates the impact of the
COVID-19 pandemic on vegetable production and offers
suggestions to ensure the stability of the urban “shopping
basket” through agricultural insurance. This study provides
two main contributions: first, the impact of the pandemic
on vegetable production is investigated and analyzed, and
the pandemic is found to have a greater impact on the
demand side; and the second contribution is the proposal
of measures to manage the impact of the pandemic on
agriculture based on agricultural insurance. It should be
2868 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876

noted that the research area of this study is Shanghai,
which has certain uniqueness in vegetable production as
a megalopolis. The impact of the pandemic on vegetable
production and the role of agricultural insurance have some
general conclusions in some aspects, but other regions or
cities should combine their actual situations when referring
to the research results.
The rest of the paper is organized as follows: the second
section presents the analytical framework, the third section
introduces the data sources and methodology, and the
fourth section discusses the research results. Finally, the
conclusion and policy implications are presented.
2. Analytical framework
The COVID-19 pandemic has had an extensive impact
on the vegetable supply chain. Taking the supply chain
of vegetables in Shanghai as an example, the process
of getting vegetables from farmland to consumers goes
through different stages, such as production, transportation,
wholesale and retail. The impact of the pandemic on the
vegetable supply chain and the function of agricultural
insurance are plotted in Fig. 1.
Theoretically speaking, the impact of the pandemic on the
vegetable industry can be divided into two periods, the initial
blockade period and the later period of the pandemic. During
the period of blockade and self-isolation, the pandemic
affected nearly every link of the vegetable supply chain.
In terms of production and supply, most of the vegetables
consumed in Shanghai need to be supplied by areas outside
of Shanghai, which accounts for approximately 60%, but
for green leafy vegetables, approximately 80% of the
consumption is supplied locally. However, the vegetables
produced locally in Shanghai are also largely dependent
on migrant farm workers. Because the pandemic broke out
during the Chinese New Year, some workers had returned to
their hometowns. Due to the blockade policy, these workers
were either restricted from returning to Shanghai or they
were temporarily unwilling to return. Therefore, there was
a labor shortage for vegetable production at the beginning
of the pandemic in Shanghai. The logistics of vegetables
have also been affected. Although the government did not
restrict the transportation of agricultural products during the
pandemic, the efficiency of vegetable logistics decreased
due to the impact of inspections and the shortage of workers.
Considering the wholesale and retail sale of vegetables,
some vegetable brokers affected by the self-quarantine
policy did not return to Shanghai in the early stage of the
pandemic. Meanwhile, the decline at the demand for
vegetables also led to a certain decline in the business of
vegetable middlemen. However, for new business models,
such as e-commerce, an opportunity for development
emerged. On the demand side, in the first few days of
the pandemic, there was a temporary increase in demand
for vegetables due to public panic and the need to stock
up during the Spring Festival, but then demand dropped.
Although agricultural products are a necessity of daily life,
demand for vegetables has been greatly impacted by the
shutdown of factories, the suspension of restaurants and
the closing of schools. As a result, the pandemic reduced
the demand for vegetables.
In the next period, as the pandemic gradually came under
control in China, the self-isolation policy was lifted, and
the production and transportation of vegetables gradually
returned to normal. The pandemic had a major impact on
vegetable production and distribution for approximately two

Production Logistics Middlemen Demand

Contract producers
outside Shanghai Supply out of Shanghai
(total 60%, green Transportation Consumers
Other suppliers leafy vegetables 20%) Wholesale/Retail Customers
Return to cities is Groups
restricted Impact of
blockade E-commerce development
opportunities Demand is
Migrant fammers affected
Local supply Transportation
(total 40%, green distribution E-commerce
Local farmers leafy vegetables 80%)
Natural Cost increase
disaster risk risk Price risk Demand risk

Agricultural Stabilize farmer income

Production risks Logistics risks Market risks
insurance and vegetable supply

Fig. 1 Pandemic’s impact on the vegetable supply chain and the function of agricultural insurance.
 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
months, after which the impact was relatively small. However,
the overall impact of the pandemic indicates that it will take
a relatively long time for the full recovery of economic and
social activities, especially with the spread of the pandemic
overseas, which will affect the recovery of production and
consumption activities in China. A decline in social activities
will lead to a drop in demand for vegetables in cities.
The impact of the COVID-19 pandemic on the vegetable
industry has led to operational risks for farmers. Agriculture
is recognized as a high-risk industry, with risks mainly
being divided into natural disaster risks and market risks.
The major sources of production risks arise from adverse
weather conditions such as drought, freezing, or excessive
rainfall at harvest or planting. Production risks may also
result from damage due to insect pests and disease despite
the control measures employed1. Market risks mainly come
from price or demand fluctuations.
The pandemic is a major health event. The risks it brings
to agriculture are an increase in production costs due to the
lack of agricultural workers in the production stage, a loss
of efficiency due to blocked transportation in the logistics
stage, and a decline in sales volume and prices in the market
stage (Jiang et al. 2020; Ye et al. 2020). The increased risk
will affect farmers’ motivation to produce vegetables and the
ultimate yield. Agricultural insurance is the main method for
dispersing the risks of agricultural production and operation
and stabilizing farmers’ incomes.
At present, agricultural insurance mainly focuses on
natural disaster risks and market risks. Price insurance
for vegetables will play a role in coping with the impact of
the pandemic on vegetables. With agricultural insurance,
farmers receive compensation when the price of vegetables
drops, thus reducing their losses, stimulating their
enthusiasm for production and stabilizing the “shopping
basket” in cities. However, it should be noted that
agricultural insurance currently does not cover some risks
to the vegetable supply chain caused by the pandemic.
To minimize the impact of the COVID-19 pandemic on
vegetable production and farmers’ incomes, it is necessary
to further improve the function of agricultural insurance.
3. Data and methods
3.1. Data
To understand the impact of the COVID-19 pandemic on
agriculture, especially on vegetable production in Shanghai,
we conducted a survey and interviews with 46 agricultural
1
The New England Vegetable Management Guide website lists “The Big Five Risks Faced by Farmers” (https://nevegetable.org/big-five-
risks-faced-farmers).
2869
cooperatives in Shanghai in March 2020. The survey covers
all nine districts with vegetable production: Qingpu, Jinshan,
Baoshan, Jiading, Fengxian, Songjiang, Chongming,
Minhang, and Pudong. Five cooperatives were surveyed
in each district, with the exception of six in Pudong. The
survey was conducted by questionnaire and interview.
The sample cooperatives involve a total of 5 000 farmers,
with an area of more than 2 600 ha of farmland and annual
sales revenue of agricultural products exceeding 150 million
US dollars. Most sample cooperatives produce vegetables
as their main products, and some also produce other
agricultural products, such as rice and pigs. On average,
the total sales revenue of the cooperatives is 3.9 million
US dollars, while the sale revenue of the leading product
accounted for 60.0% of all sales. The average farmland
area of each cooperative is 66 ha, and the number of
farming households is 167. As the sample included one
large cooperative, the Shanghai Honggang Green Lentil
Cooperative, the average and median characteristics of
the sample cooperatives are somewhat different (Table 1).
In addition to the survey data, we also obtained statistical
data on vegetables during the pandemic period from Qingpu
Agricultural Bureau, Shanghai. Qingpu is an important
vegetable production area in Shanghai, accounting for
approximately a quarter of the city’s vegetable output.
During the pandemic, to monitor vegetable planting, the
government required all cooperatives and large farms to
submit data on the vegetable labor force, yield and price.
We obtained the data of 29 major vegetable cooperatives
in Qingpu on February 3, February 25 and March 5, which
better reflect the vegetable production during the pandemic.
The data involve the daily sales volume, sales channels and
sales prices of more than 20 vegetable varieties. There are
330 data points for various vegetables. The cooperatives
on average represent a vegetable area of 20 ha and sell
3.6 tons of vegetables per day.
3.2. Methods
To investigate the impact of the pandemic on vegetable
production, we adopt two analytical methods: comparative
Table 1 Sample characteristics of cooperatives
Characteristics Mean value Median
Proportion of leading product 60.0% 62.5%
Sales revenue (million US dollars) 3.9 1.2
Farmland area (ha) 66.0 20.7
Number of households 167 34
2870 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
statistics and econometric analysis. Comparative
statistics refer to a conventional statistical method that can
preliminarily judge differences between samples during
the comparison period. Since the production and sales of
vegetables generally show periodic changes with season
changes, seasonal effects can be eliminated and the impact
of the pandemic on vegetable production can be better
investigated only by comparing the production and sales
data of vegetables in the same period of a normal year.
Therefore, based on survey data and government statistics,
we use comparative statistics to analyze changes in
vegetable production, sales and prices during the COVID-19
outbreak to investigate the impact of the pandemic on the
vegetable industry.
In addition to comparative statistics, we also use
econometric methods to measure the impact of relevant
factors on vegetable prices to analyze the ability of
producers with different characteristics to cope with
COVID-19. Specifically, we build the following model:
yi=αi+β×Channeli+γ×Volumei+δ×Areai+θ×Datei
+μ×Locationi+ρ×Variety+εi (1)
The impact of the pandemic on vegetables is partly
reflected in the price change of vegetables. In the
econometric model, y i represents the sale price of
vegetables and is the explained variable. Although many
factors affect changes in vegetable prices, based on the
purpose of the study and limited by the data, the explanatory
variables in the model include sale channels, cooperative
land areas, daily sales of each vegetable variety and
dates. The sale channels include field sales, wholesale,
supermarket and e-commerce, with the field sales price as
the benchmark. The date variables are February 3, February
25 and March 5, with February 3 as the benchmark. The
variables “variety”, “volume” and “area” capture the varieties
of vegetables sold by the cooperative on a certain day, the
sales volume of such vegetables and the land area owned
by the cooperative. In addition, the model will also control
the location of the producers and the cooperative variable.
εi is the random error term. The least squares method will
be used to estimate the model.
4. Results and discussion
4.1. Descriptive results of the impact of pandemic on
vegetable supply chain and famers’ incomes
Vegetables need to go through a series of supply chain
processes from farmland to market. To understand the
2
Since the survey question allows multiple choices, the sum of the selected results exceeds 100%.
impact of the pandemic on each stage of the vegetable
supply chain, the question in the survey was “Which aspect
of your production and operations has been most affected
by the pandemic?”. The options are “production”, “logistics”,
“sales” and “other”. The results show that 24.64% of
cooperatives chose “production”, 20.29% chose “logistics”,
47.83% chose “sales” and 7.25% chose “other”. From this
result, it can be seen that the pandemic has an impact on
all stages of the vegetable supply chain, but it has had the
most significant impact on the produce sales stage.
To further understand the impact of the pandemic on
vegetable production, we asked the cooperatives this
question: “What are the main aspects of the impact of the
pandemic on production?” with the options for responses
being “lack of production inputs”, “labor shortage”, “increase
in labor costs”, and “others”. The results show that an
equal number of cooperatives chose “labor shortage” and
“increase in labor costs”, which each account for 65.2% of
the total sample; “lack of production inputs” accounts for
19.6%2. During the early period of the pandemic, China
adopted a strict quarantine policy, which created a temporary
shortage of labor for vegetable production and led to an
increase in labor costs. From the perspective of agricultural
inputs, although the pandemic has had a small impact on
production inputs in the short term, given the impact of the
pandemic on the agricultural inputs industry, the stable
supply of fertilizers, pesticides and other substances should
also be considered.
We learned from the interviews that most of the
vegetable farmers in Shanghai are not local, and some
of them returned to their hometowns before the Spring
Festival and were not able to return to Shanghai quickly
due to the pandemic, which affected the labor supply for
vegetable production. According to the statistics of the
Qingpu Agricultural Bureau, 88.57% of vegetable-growing
households are from other areas, and 92.30% of vegetable
workers are migrant farmers. During the Spring Festival, the
migrant vegetable farmers who left Shanghai accounted for
32.19% of the total number of migrant farmers. By February
23, a total of 8.72% of migrant farmers had not returned
to Shanghai, and by March 5, a total of 6.08% of migrant
vegetable farmers had not returned (Table 2). The delay of
migrant farmers’ return to Shanghai definitely affected the
production of vegetables.
The pandemic has had an impact on the logistics of
agricultural products. Through interviews, we know that
due to traffic restrictions during the pandemic, the logistics
were greatly affected for vegetables and other agricultural
 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
products. For cooperatives with vehicles and distribution
capacity, many agricultural products such as vegetables
could not be shipped in time due to traffic restrictions. For
those cooperatives without vehicles, the number of vehicles
from purchasers of vegetables was greatly reduced due to
the pandemic. Due to the quarantine policy, many vehicles
that purchased vegetables could not enter the villages. To
sell vegetables, some farmers used tricycles to transport
vegetables out of the village and then loaded them into cars
to transport them out. Transportation efficiency declined,
and its cost rose. In addition, many vegetable middlemen
and vegetable brokers were not local to Shanghai. The
COVID-19 pandemic affected their return to Shanghai and
therefore affected the logistics of agricultural products.
The pandemic has a major impact on the demand for
agricultural products such as vegetables. To the question,
“How much have your sales declined due to the outbreak?”,
the results show that 15.9% of cooperatives saw their
sales volume of agricultural products unaffected, 4.5%
saw a decrease of less than 10%, 29.5% saw a decrease
of 10–30%, and 50.0% saw a decrease of more than 30%.
Interviews with producers confirmed the survey results.
During the height of the pandemic, factories, schools and
restaurants in Shanghai were temporarily closed, leading to
a sharp drop in demand for vegetables. The investigation
shows that after the sixth day of the first lunar month, some
vegetables in Shanghai began to appear to be unsaleable.
Farmers who did not have stable distribution channels,
for example, those who normally rely on brokers to come
to the fields to purchase agricultural products, were more
severely affected by the pandemic. According to our
survey, approximately 10% of the vegetables produced in
February were not sold due to the pandemic in Shanghai.
Affected by the pandemic, some large-scale and capable
agricultural production enterprises or cooperatives began
to change their sales mode, for example, by increasing the
supply to communities and supermarkets and developing
e-commerce, which somewhat alleviated the impact of the
pandemic.
The impact of the pandemic on agricultural production,
transportation and sales in Shanghai directly affects the
incomes of farmers. For the question “how did your February
Table 2 Labor supply in vegetable production on February 23, 2020
Labor source Local
Households
Number 219
Proportion (%) 11.43
Workers
Number 295
Proportion (%) 7.70
1)
Data source: Qingpu District Agricultural and Rural Committee, Shanghai, China.
2871
incomes compared to normal?”, 8.9% of cooperatives
chose “increase or no change”, 11.1% of cooperatives
chose “declined by less than 10%”, 20.0% of cooperatives
chose “declined by 10 to 20%”, the same proportion
chose “declined by 20 to 30%”, and more than 40.0% of
cooperatives chose “declined by more than 30%”. Clearly,
the incomes of most agricultural producers decreased
during the pandemic period, accounting for 91.1% of the
total sample size. From the perspective of the range of the
decline, 40% of producers saw their incomes decrease by
more than 30%, further indicating that the pandemic has had
a significant impact on the incomes of vegetable farmers.
We further investigated the impact of the pandemic on
farmers’ incomes through interviews with producers. The
profit of vegetable farmers mainly depends on their sales
income from November to March of the following year
because the prices of vegetables during this period are
generally higher, and farmers can obtain higher returns.
Vegetable prices in summer are low, and their contribution
to farmers’ annual profit is limited. Therefore, from this
perspective, the decline in farmers’ incomes during the
pandemic period would have a large impact on their annual
incomes. Some interviewed farmers said that the loss of
the two months’ incomes would cause their annual profit to
drop by approximately 40%.
Although the pandemic in China has been under
control, its impact on economic and social activities will
be delayed and sustained. Meanwhile, the spread of the
pandemic abroad will also have a certain impact on the
control measures and agriculture in Shanghai. Therefore,
the pandemic is predicted to continue to affect vegetable
production in Shanghai for a long time. For the question
“what are you most worried about in the next six months?”,
the response options are “labor shortage and cost increase”,
“produce price fluctuation”, “difficulty selling produce” and
“others”. According to the survey results, 26.7% of the
respondents chose “labor shortage and cost increase”,
53.3% chose “produce price fluctuation” and 68.9% chose
“difficulty selling produce”. We find that farmers are more
worried about market risks. Therefore, key issue to be
considered in the later period of the pandemic is how to
dissolve the market risks while ensuring the enthusiasm of
Other places Leave Shanghai Not returned yet
1 697 544 148
88.57 32.06 8.72
3 536 1 020 272
92.30 28.85 7.69
2872 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
vegetable farmers in production.
4.2. Empirical results of the impact of the pandemic
on vegetable prices
The impact of the pandemic on demand for vegetables is
directly reflected in vegetable prices. In response to the
question “What was the change in the sale price of your
major products during the pandemic compared to a normal
year?”, the results show that 22.7% of the cooperatives
chose “increase or no impact”, 20.5% chose “declined by
less than 10%”, 27.3% chose “declined by 10 to 20%”, 20.5%
chose “declined by 20 to 30%”, and 9.1% chose “declined
by more than 30%”. The findings suggest that the prices
of most vegetables sold by cooperatives fell during the
pandemic in Shanghai.
The market price of vegetables includes the cost of
logistics and other intermediate processes, and the actual
sale price of vegetables received by farmers is lower due
to the influence of supply chain obstruction. By comparing
the prices of vegetables during the pandemic this year
with the prices during the same period in the past, we can
preliminarily see the impact of the pandemic on vegetable
prices. Table 3 shows the prices of vegetables (including the
weighted equal price of vegetables and pak-choi (Brassica
chinensis var. chinensis)) in February and March of this year
compared with the same period of last year. The prices
include field price and wholesale price. As shown in Table 3,
on the one hand, the prices of vegetables during pandemic
period this year have dropped significantly compared with
those during the same period last year. On the other hand,
field prices have fallen more sharply than wholesale prices.
Taking the pak choi as an example, the average wholesale
price of pak choi in March was 2.31 CNY kg–1, down 32.85%
compared with the same period last year. However, the
price of pak choi sold by farmers in their fields was only
1.25 CNY kg–1, down 50.98% compared with last year. The
drop in field price is much larger than the drop in market
price. Since most of the producers who sell vegetables to
brokers in the fields are traditional smallholders, the results
suggest that traditional smallholders were more severely
Table 3 Comparison of vegetable prices during the pandemic this year and the same period last year
Weighted vegetables
Price
2020 2019
Field price
February 2.43 2.75
March 1.79 2.71
Wholesale price
February 4.39 4.59
March 4.22 4.82
1)
Data source: Shanghai Municipal Agricultural and Rural Committee, China.
affected by the outbreak.
As mentioned above, the pandemic has a considerable
impact on the prices of agricultural products. In the survey,
we found substantial differences in the degree of the impact
of the pandemic on vegetable prices in different sales
modes. To further explore the change in vegetable prices
and its influencing factors during the pandemic period, we
apply regression analysis using statistical data obtained from
Qingpu Agricultural Bureau. The econometric models are
described in the methodology section above. The results
of the pooled OLS regression are shown in Table 4, where
the first column only controls the vegetable varieties. As the
prices of different vegetable varieties vary greatly, and the
same variety may have price differences in different regions,
the regression further controls the vegetable varieties and
production locations, and the regression results are shown
in the second column in Table 4. In addition, due to different
market advantages, vegetable selling prices of different
producers are also different. Therefore, individual producer
variable is controlled in the regression in column (3).
It can be seen from the regression results that there are
significant differences in the prices of vegetables sold in
different sale channels during the pandemic. The prices of
vegetables sold through the wholesale market and through
e-commerce are significantly higher than the field sales
price, especially for new retail e-commerce. The average
price of green leafy vegetables per kilogram sold through
e-commerce is 4 CNY higher than the field sales price.
Through the interviews, we learned that sale channels
such as Freshippo and Vegetable Steward directly reach
consumers, and there are no middlemen channels, so the
price is higher. However, the regression results show that
the prices of vegetables sold through supermarkets are
not significantly different from those for vegetables sold in
the field. Generally, supermarkets have strong bargaining
power, so their purchase price from farmers is low. For
the variable of vegetable sales volume, the coefficient
is negative and significant, indicating that the larger the
vegetable sales volume is, the lower the price. This result
is consistent with economic theory. Considering the date
variables, the coefficients of February and March are
Pak choi
Decline (%) 2020 2019 Decline (%)
11.64 1.75 2.45 28.57
33.95 1.25 2.55 50.98
4.36 2.35 3.38 30.47
12.45 2.31 3.44 32.85
 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
Table 4 Impact of different channels on vegetable prices during the pandemic period
Variables Model (1)
wholesale 0.313 (0.297)
supermarket –0.189 (0.408)
e-commerce 5.197*** (0.365)
volume –0.028*** (0.006)
area –0.081 (0.100)
February –1.715*** (0.295)
March –1.873*** (0.291)
varieties Controlled
location Not controlled
cooperative Not controlled
constant 4.812*** (0.389)
R-squared 0.491
n 330
Standard errors are in parentheses. *, P<0.1; **, P<0.05; ***, P<0.01.
both negative and significant at the level of 1%, indicating
that the price of vegetables continued to decline during
the pandemic. Overall, the regression results show that
the e-commerce sales model can effectively address the
impact of the pandemic on vegetable prices. In addition,
with the growth in the vegetable supply, the market risks of
vegetables will increase in the next period of time.
The above regression results show that under the
control of related factors, the price of vegetables decreased
significantly during the pandemic period, and e-commerce
was less affected by the pandemic and even showed
development, indicating that the impact of the pandemic
on vegetable production can be mitigated through the
development of e-commerce.
4.3. Practices and problems of agricultural insurance
in response to the pandemic
Agricultural insurance is an important way to diversify
agricultural planting and management risks. In recent
years, to guarantee the supply of agricultural products and
the incomes of farmers, Shanghai has issued many policies
to support the development of agricultural insurance (Liu
2016). Agricultural insurance has also played an active role
in responding to the impact of the pandemic on agriculture
(Mu 2020). In this section, we will discuss the measures
taken by agricultural insurance in Shanghai and farmers’
expectations under the impact of the pandemic.
In response to the impact of the pandemic on the supply
of vegetables and other agricultural products, Shanghai
has taken many measures to make agricultural insurance
play a greater role. First, insurance coverage for vegetable
farmland was increased. All green leafy vegetables grown
during the pandemic were covered by price insurance. The
original policy for Shanghai vegetable price insurance limited
the covered area of vegetables, and so not all vegetables
2873
Model (2) Model (3)
0.527* (0.304) 0.733** (0.302)
–0.227 (0.404) –0.056 (0.397)
4.628*** (0.416) 4.023*** (0.433)
–0.026*** (0.006) –0.027*** (0.006)
–0.113 (0.100) –0.036 (0.099)
–1.670*** (0.292) –1.687*** (0.286)
–1.855*** (0.288) –1.871*** (0.282)
Controlled Controlled
Controlled Controlled
Not controlled Controlled
4.216*** (0.441) 3.748*** (0.446)
0.502 0.524
330 330
grown can be covered by insurance. During the pandemic, to
encourage farmers to produce more vegetables and stabilize
their incomes, the government allowed all vegetables to be
covered by policy-oriented agricultural insurance for those
farmers willing to participate in price insurance.
Second, insurance compensation for farmers’ losses
was increased. In response to the increase in labor cost
in vegetable production, the Anxin Agricultural Insurance
Company arranged a compensation reserve of 50 million
CNY to double the compensation for any vegetable
operation losses that triggered claims. In March, the first
compensation was paid to farmers, and the simple indemnity
ratio reached 132%, which effectively stabilized the incomes
of vegetable farmers and increased the motivation of
vegetable farmers to plant vegetables.
Third, agricultural insurance coverage for agricultural
products was increased. Some varieties of vegetables
and fruits in Shanghai were not covered by price insurance
and have suffered severe losses due to the pandemic. For
example, after the Spring Festival, strawberries were difficult
to sell and the price was low due to the drop in demand. In
addition to the lack of agricultural workers, a large number
of strawberries rotted in the fields, and farmers suffered
serious losses. Anxin Agricultural Insurance Company
developed strawberry price insurance in cooperation with
local governments. If the market price of strawberries is
lower than the average market price for the same period
in the previous three years, the insurance company will
compensate the farmers for their losses. Farmers only need
to pay 20% of the premium, while government subsidies
account for 80%. Agricultural insurance reduced farmers’
losses due to the pandemic by insuring more kinds of
vegetables and fruits.
Finally, vegetable production bases outside Shanghai
were insured. As an agricultural enterprise in Shanghai,
Bright Food (group) Co. has 150 plantation bases outside
2874 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
Shanghai. The cooperation between Anxin Agricultural
Insurance Company and Bright Food (group) Co. to provide
insurance to its plantation bases outside Shanghai helped
maintain the supply of vegetables to Shanghai during the
pandemic.
There are still some problems with agricultural insurance
in responding to the impact of the pandemic on vegetable
supply. First, insurance coverage needs to be expanded.
Current agricultural insurance does not cover risk in the
agricultural product circulation stage. Our survey shows
that most producers expect insurance companies to provide
insurance against risks in distribution and sales. Some
vegetable varieties are not covered by insurance. In the
case of green leafy vegetables, agricultural insurance
covers only pak choi and Chinese cabbage throughout
the year. In addition, agricultural insurance companies
mainly provide agricultural insurance to cooperatives and
large farms, and many small farmers have less opportunity
to participate in agricultural insurance. Second, the sum
insured needs to be raised. At present, the sum insured of
most agricultural insurance types in Shanghai only covers
the materialized costs of production, and the standard is
low. Due to the impact of the pandemic, the field sales
price of agricultural products has dropped significantly to
only half of the market sales price. Price insurance, which
uses market price changes as a criterion for determining
whether to compensate, can only partially reflect farmers’
losses. Finally, agricultural insurance claims need to be
processed more quickly. There is still room for improvement
in the business process, claim speed and service efficiency
of Shanghai agricultural insurance. Our survey shows that
more than 60% of farmers wanted the speed of insurance
payments to be increased.
The expectation of vegetable producers on agricultural
Provide insurance for the risk of circulation
and sales of products
Farmers’ strongest expectation
Provide insurance for the risk of labor
shortages or cost incresaes
More products should be included in policy-
oriented insurance
Increase the insured area
Increase the sum insured
Increase the speed of compensation
0 10.0
Fig. 2 The service most expected by producers from agricultural insurance.
insurance under the impact of the pandemic was also
revealed in the survey. The survey shows that most
agricultural producers confirm the positive role of insurance
but also have considerable expectations for it. To understand
these expectations, we introduce the following questions:
“In response to the impact of the pandemic, what are your
expectations for agricultural insurance?”, and the response
options are “increase the speed of compensation”, “increase
the sum insured”, “increase the insured area”, “include more
kinds of agricultural products in policy-oriented agricultural
insurance”, “provide insurance for the risk of labor shortages
or cost increases” and “provide insurance for the risk of
circulation and sales of agricultural products”. The survey
results show that more than 60% of cooperatives chose
“increase the speed of compensation”, “increase the sum
insured”, and “provide insurance for the risk of circulation
and sales of agricultural products”. Among them, “provide
insurance for the risk of circulation and sales of agricultural
products” had the highest proportion, reaching 76.1%,
followed by “increase the sum insured”, with a proportion
of 69.6%.
The above question is a multiple choice question, and the
responses show that cooperatives have many expectations
for agricultural insurance. Extending the above question,
we further asked “what is your strongest expectation”. The
survey results show that most of the sample chose “provide
insurance for the risk of circulation and sales of agricultural
products”, accounting for 51.1% of the total sample (Fig. 2).
This shows the role of agricultural insurance in minimizing
the market risks of vegetables is an important issue to
cooperatives that agricultural insurance needs to focus on.
In addition to investigating producers’ expectations
through closed selection questions, we also obtained
producers’ advice on agricultural insurance through open
51.1%
15.6%
17.8%
4.4%
20.0%
15.6%
20.0 30.0 40.0 50.0 60.0 (%)
 GU Hai-ying et al. Journal of Integrative Agriculture 2020, 19(12): 2866–2876
questions. To the question “what are your suggestions
for the services of agricultural insurance?”, the producers
proposed: “increase insurance coverage for more vegetable
varieties”, “shorten the verification and claim process”, etc.
This study also has some limitations. For example, due
to the impact of the pandemic on the survey activities, the
sample size is limited, which restricts the further quantitative
analysis. There are some differences in vegetable
production modes and agricultural insurance products in
different regions, so the study reflects more of the situation in
Shanghai, which may affect the universality of the research
results. In the future, we will conduct surveys on different
types of agricultural producers in different regions of China,
further analyze the long-term impact of the pandemic on
the supply of vegetables and other agricultural products
in the context of the global agricultural supply chain, and
analyze the role of agricultural insurance in coping with major
unconventional events such as the pandemic.
5. Conclusion and implications
This study investigates the impact of the COVID-19
pandemic on vegetable production in Shanghai, and
analyzes the practices and problems of agricultural
insurance in response to the pandemic. Results indicate
that the pandemic has impacted almost all stages of the
vegetable supply chain especially the sales stage, leading to
a decline in vegetable prices and serious losses for farmers.
The e-commerce business model was relatively less
affected by the pandemic and that the price of vegetables
sold through e-commerce was substantially higher than the
price of vegetables sold through traditional sale channels.
Agricultural insurance played an important role in stabilizing
the supply of vegetables to Shanghai during the pandemic.
But many vegetable varieties are not included in the price
insurance catalogue, and the compensation provided by
agricultural insurance for the loss caused by the pandemic
is limited. Based on the results, agricultural insurance
should be further improved to cope with the impact of the
pandemic on vegetable production and farmers’ incomes.
For example, the coverage of policy-oriented agricultural
insurance for more vegetable varieties should be increased
and the amount of agricultural insurance should be further
increased to compensate for farmers’ losses. In addition,
it is necessary to encourage and help vegetable producers
to develop e-commerce to improve the ability to minimize
the impacts of the pandemic and the risks of external
environmental changes.
Acknowledgements
This study was supported by the Humanity and Social
2875
Science Youth Fund of the Ministry of Education of China
(18YJC790157) and the National Social Science Fund of
China (16ZDA019).
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Executive Editor-in-Chief HUANG Ji-kun
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