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Coronavirus Lockdown Impact: Fear Clouds over India’s Agriculture and Farming Sectors

Agriculture Business
Coronavirus Lockdown Impact

Earlier the inclement weather including rains in the first three weeks of March and then the nationwide lockdown over Coronavirus Outbreak hit the Indian farmers twofold.

The coronavirus pandemic has disrupted global food supplies and is causing labour shortages in agriculture worldwide.

The subsequent lockdown imposed nationwide is fracturing the functional sequence of agricultural produce movement, which is, production-distribution-consumption.

Trucks stranded with agricultural products, shortage of buyers, departure of migrant workers, and other threats, coronavirus’ impact on agriculture is already being felt.

Further, worsening the situation, the main rabi (winter) crop – wheat, which is sown between late October till December- now stands at the harvesting stage in Punjab, Haryana, Western UP & Madhya Pradesh, making the coronavirus lockdown impact, inevitable damage for farmers.

Coronavirus Outbreak has happened at a crucial farming time – the new crop is ready, waiting to be sold.

Although strict measures like social distancing must go in for curbing the spread of COVID-19, tuning out the agriculture sector would be a grave mistake as the economic loss the farmers will bear outweighs the other sectors due to the disturbance in the supply chain.

Coronavirus Lockdown Impact – Indian Agriculture Labour

Agriculture labour hit the most due to coronavirus pandemic.

Around 30 million agricultural labourers, who survive on their daily income, are without work, in the peak season, due to social distancing measures.

The agriculture industry contributes nearly $265 bn to India’s GDP. India is a labour-intensive economy, especially the agriculture sector, where about 60% of farm activities are usually done by manual labourers, that is, the migrant workers.

The return of these migrant workers to their native village will affect the post-pandemic situation in the country.

Post-lockdown in the coming months will not bring much relaxation to farmers.

That’s why, if we continue to undercut agriculture and Indian farmers from the precautionary measures and relaxations, there might be an alarming situation in due course of time.

Time has witnessed, that, agriculture sector becomes a stage of public protest and anger, during such crises.

The government action to provide farmers 2,000 rupees ($30) in April as an advance payment from an $80 annual pay-out to tide over the situation, was a welcoming step.

However, this is only a drop in the ocean because:

  • exports are at a halt
  • soaring food prices in cities for profiteering
  • shortage of buyers in the rural areas, hence farmers won’t be able to sell their crops

Hence, the biggest challenge lies down is to transport this food from rural areas to cities amidst lockdown.

Any failure in the continuance of agricultural operations will be resultant to massive losses for Indian farmers and a nationwide food and nutrition insecurity.

Earlier the ministry of agriculture expected the wheat production of this year about 109 million tonnes, 6.27 per cent more than the previous year’s output.

The minimum support price for wheat is Rs 1,925 per quintal. The picture stands blurry today, due to the recent delays and crises.

Challenges to Global Economy

The Food and Agriculture Organization (FAO) food price index, which records monthly changes in the international prices of commonly-traded food commodities, averaged 180.5 points in February, 1% lower than in January.

It is worth noting that the fall in food prices in February is the first recorded incidence in the last four months.

According to FAO, wheat prices were already fetching lower prices, partly due to the continued well-supplied markets.

However, the negative impact on demand resulting from the spread of the coronavirus (which causes the COVID-19 disease) has further contributed to the decline in prices.

The report further suggests that the price of maize has also slumped primarily because of expectations of less demand from the feed sector.

FAO report & India’s perspective

The following keynotes appear on the surface:

  • FAO’s report brought clouds of worries for the Indian farmers when wheat production in the country this year have recorded to massive 106.21 million tonnes
  • Indian maize market will further witness a crash in prices due to bird flu reports in some areas and wrongly held beliefs about eating non-vegetarian foods during the coronavirus outbreak
  • Disbalance between wholesale and retail prices of perishable fruits and vegetables, where the retail price of fruits and vegetables have gone up to 20-30% as a result of panic-buying and hoarding, influenced by coronavirus lockdown announcement, the wholesale price of such perishable goods have fallen by 15-20%, due to reduction in demand

The current situation is an alarm to an increase in the pricing of agri-products due to limited availability.

The situation in Indian Mandis (goods’ marketplace)

Large mandis countrywide are impacted due to the lockdown.

The usual speed to unload and redistribute to the various places has slowed down.

Asia’s largest mandi (marketplace) for fruits and vegetables, which, on usual days receives 5,000-8,000 trucks daily and does about 23,000 transactions per day, is not able to put away even 25% of its capacity.

On the other side, the prevailing situation has created a shortage of fruits and vegetables in cities as they are the epicentres of supplies from mandis.

Overall, India can imagine the extent of loss in its agricultural sector and the farmers who are still bearing the burden of the coronavirus outbreak.

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Impact of delayed harvest

  • Madhya Pradesh & Uttar Pradesh states have local labourers which worsen the situation of Punjab and Haryana. Farmers are ready to harvest their rabi crops in Madhya Pradesh, Punjab, Haryana & Western Uttar Pradesh, but are stuck in the same situations; either there are no buyers or arhatiyas (commission agents) are not ready to accept the produce. Farmers, left with no choice are pressurised to store their produce with themselves, burdening them further to either find storage or transport them to mandis.
  • Farmers in Bihar are struck with matured banana, as there is no transportation facility available amid coronavirus lockdown.

Farmers also worry about government procurement and their ability to sell their crops, given that many mandis or agricultural markets are still closed, despite fresh Home Ministry orders to exempt all such farming activities from the shutdown.

India has to wait longer for observing improvements in the status of mandis, supply chain management, procurement, and distribution of agri-products.

Ramandeep Singh Mann, a Haryana-based farmer activist, in his interview with a media publication, pulls out the prevailing situation in Punjab and Haryana.

“Punjab’s mandis alone employ 3.5 lakh agricultural workers during this season, to load, weigh, clean and bag the produce. How is procurement going to be possible without them?” he asks.

He noted that many of the mechanical combine harvesters owned by Punjab and Haryana farmers are also stuck in Madhya Pradesh, Maharashtra and Gujarat, which harvest their wheat earlier than the northern States.

“They have been caught by the lockdown, usually with four or five workers accompanying them.

Now they have to cross multiple state lines to return, so it is unclear how many will make it on time, leading to shortages,” he added. “At the end of the day, harvesting cannot be postponed beyond 7 or 8 days, or the grain will shatter.”

Government Role

Haryana & Punjab have delayed wheat procurement to April 15, in the hopes of lockdown lift.

Central Food Ministry has received a request from Haryana, for incentives to farmers to slow down the procurement process to avoid further congestion at Mandis after the harvesting season.

Haryana govt is also looking ahead to offer an additional ₹50 per quintal for those able to store their crops and wait to sell until May 5, and ₹125 for those willing to hold on till June.

A big relief came for Telangana farmers when the Telangana govt. announced to procure all non-perishable crops at the village level itself, freeing the farmer of the responsibility of finding storage or transport to the mandis.

Ministry of Home Affairs issued an addendum to its lockdown guidelines, exempting all farming activities, after an uproar by the agricultural community. Yet the implementation on the ground level is still cloudy.

The state governments have assured the farmers of smooth operations of harvesting and procurement before the marketing season.

Yet, farmers are nervous about the outcome and the prevailing fears, as there is still, no notification from the government about the procurement dates and other concerns like storage, the opening of mandis and guidelines for harvesting the crops.

On Saturday, the government granted exemptions and relaxations for agriculture and allied sectors amid the ongoing lockdown due to coronavirus.

Shops of agricultural machinery, its spare parts including its supply chain and repairs and shops for truck repairs on highways, preferably at fuel pumps, can remain open to facilitate transportation of farm produce.

The tea industry, including plantations, can also function with a maximum of 50 per cent workers.

These are the crucial times for Indian agricultural sector and require crucial decisions from the government.

Immediate measures & relief efforts to support the farmers must be a priority as India cannot afford to wait for the post-lockdown period.

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