Agri Business

Work pending to fix supply chain disruptions in agri-sector

Pratim Ranjan Bose Kolkata | Updated on March 27, 2020

The government, on Wednesday, clarified that shops selling seeds and pesticides are out of the purview of the lockdown. However, a lot is yet to be done to ensure logistics for smooth functioning of the sector and avoid black marketing of agri-inputs.

Covid-19 struck India during the busy season for the agriculture sector. It is harvesting time for potato (Bengal, UP, Jharkhand, Odisha), wheat, pulses, and oilseeds. Boro rice (in Bengal, Bihar, and Odisha, among others) which will be harvested in April-May is now in milk-stage (the formation period of rice). It is sowing season for sesame, jute, and maize.

It is also the time to grow summer vegetables and spraying season for major fruits like mango and apple (Kashmir and Himachal Pradesh).

Job opportunity

The brighter side of the story is that job opportunities are plenty in rural markets this time of the year, which can be used as a fall-back option for the daily wage earners in cities who are most affected by the lockdown.

However, farm sector activities suffered over the last few days as law enforcers forced shutdown of shops and establishments to prevent community spread of the disease. Farming, as an activity might be on, but farmers are not getting much-needed inputs.

While the Centre issued due clarifications yesterday, this is yet to percolate to the ground level.

“Some shops opened in Hooghly district (West Bengal) today, but majority are closed as ground-level officials are yet to be informed,” said Jayanta Chakrabarty, President of Eastern India Crop Care Association, a body of pesticide company officials. He is expecting the issue to be resolved soon.

Supply-chain disrupted

However, opening shops will not solve all the problems. A bigger problem awaits the logistics sector. The lockdown and general fear of infection have created huge shortage of labour and transport infrastructure.

Warehouses of all pesticide companies are virtually closed due to non-availability of transporters. Subhasis Pal, a distributor of fertilizer and pesticides in Malda, says though he has enough stocks, the goods are not moving to dealers and village-level retailers.

Retailers normally operate with low stock levels to minimise working capital needs. This means if the supply line is not restored immediately there will be scarcity in the market.

Supply from plants to warehouses is also impacted. Unloading of rakes have been delayed as authorities are wary of deployment of huge labour force that goes against the norm of social distancing, inviting the risk of infection.

Satish Chandra, Director General of the Fertiliser Association of India (FAI), confirms that there are issues pertaining to logistics and supply-chain and “the government is aware of it”. He is expecting more directions to iron out these issues in the coming days.

Double-edged sword

However, supply-chain disruptions have limited impact on fertilizer and pesticides in the immediate future. This is because there is low demand for fertilizer at this time, and consumption of pesticides is need-based. Except in apple orchards, demand is low.

However, availability of seeds is a concern. And moving the harvested crop from the farm to consumption points is another major concern.

Resolving these issues, therefore, is necessary to avoid food inflation and long-term impact on the economy. The fate of nearly 75 per cent of microcredit portfolio and a good chunk of two-wheeler and other financing is directly linked to the health of the farm sector.

On the flip side, normalising agri operations will virtually free up nearly half the population from the restrictions of the lockdown and social distancing.

New Zealand, which has a huge agri economy, is solving the problem by enforcing strict operational guidelines. It is questionable, if India can force its crores of small farmers, agri-traders, operating mostly in the unorganised sector, to adhere to such restrictions.

Published on March 27, 2020

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