A lockdown exit plan with a focus on the rural sector

Milindo Chakrabarti | Updated on April 10, 2020

Processing and marketing logistics for agri produce, particularly perishables, needs to be restored, with SHGs, banks and civil society groups taking the lead

The present phase of lockdown across the country is linked to immediate concerns for citizens lives. But a lockdown — bringing almost all economic activities to a standstill — impacts the security of livelihoods of a vast section of the population as well. There are millions in the country caught in this vicious trap. Even though a lockdown potentially protects them from the threats of related morbidity and even mortality, it puts a big question mark on their livelihood security. Rapid increase in unemployment throughout the country during the lockdown attests to this concern. In the absence of a credible social security support, those rendered unemployed face a severe crisis of sustenance.

A recent ILO report puts the potential number who may slip into poverty due to loss in employment opportunities in the country at a staggering 40 crore. En masse effort by the migrant labourers to walk back home covering hundreds of miles, post declaration of the 21-day lockdown, bears testimony to this fear. Most of them have limited access to health services and social security protection. The desperate march on foot for days to home with kids in tow, despite the declaration of a complete lockdown, perhaps indicates their craving for social protection as they prefer to be among their close relatives at their ancestral homes.

Criteria for lifting lockdown

Soon, a decision would be taken on lifting the lockdown, and undoubtedly, the country cannot persist with such restrictions for an indefinite period. Continued restrictions on economic and social activities today would entail a huge long term cost to our socio-economic structure that will increase exponentially with the extension of the duration of lockdown. Consensus eludes us about the timing, nature and scope of such withdrawal.

Most of the criteria proposed so far for easing the restrictions emphasised largely on security of life and are linked to locational perspectives of lockdown measures. Exit plans that facilitate enhanced livelihood security are yet to emerge in a comprehensive way. What’s needed is criteria that may combine the geographical features along with the sectoral features.

This may well begin with the agricultural sector, which employs the largest share of the population of the country and caters to their livelihood concerns, even though its share in the national GDP has been falling steadily. The consequences are not hard to locate. Those engaged are already the most vulnerable in protecting their livelihoods. The flow and extent of rural-urban migration indicate their sheer helplessness. Restrictions in movements have added to further fuel to the fire.

Agri products

India’s agricultural sector produces two types of primary products — those which are perishable, like vegetables, fruits, fish, specially coming out of capture fisheries, milk, poultry products including eggs, flowers etc; and those which may be stored, like grains, pulses and some cash crops.

The perishable products must be passed on to the ultimate consumers within a very short period of time. The country developed an elaborate supply chain for most of them and the networks are spread across the states. In view of the countrywide lockdown, such supply networks got snapped, perhaps with some exception in case of milk. If restrictions on inter-State or even intra-State mobility of these products persist further, the producers would be hard-pressed to realise the value of their production and hence suffer from considerable distress.

Efforts at creating local supply chains that links local producers to the local consumers, spread mostly around the nearest urban locales, can be of help. An experiment by a small farmers’ collective of 37 members to build a farm-to-home model in the Nhavi Budruk village of the Satara district emerged effective in this respect. A network of local producers and local consumers, facilitated by local government officials, civil society organisations (CSOs), bankers, transporters and SHGs may stem the rot with immediate effect.

Such an exercise may be effective with adequate regulatory support from the government officials, communication support from the local CSOs, and required short-term credit — working capital support from the local bankers, while SHG members may be engaged in procurement and selling. Local transporters will provide the logistic support. Local self governments would be happy to coordinate.

The efforts necessary in respect of the agricultural products that are not perishable and can be stored till the prices are remunerative enough would require a different strategy. Some mobile storage facilities — for example, unused railway wagons, containers used by the transporters, even tankers — need to be immediately created at local levels in regions that would be freed from lockdown. Some amount of the stored produce may be directly sold to the local consumers, while the rest may be taken to larger markets while the transportation network starts operating seamlessly beyond the local boundaries.

The same mechanism proposed for perishable products may be applied, with government officials, CSOs, bankers, transporters and farmers joining hands together and the local panchayats providing the coordination supports. Members of the SHGs will manage the storage operations in return of some reasonable commission for the services rendered.

Processing and harvesting

The demand for processed agricultural products is not insignificant. Local MSMEs would feel encouraged to participate, may be not immediately, but in the medium term, in joining the local marketing network. The experience, however sporadic, of engaging local SHG members in procuring and milling paddy into rice in some districts of West Bengal may be studied in depth and operationalised elsewhere with suitable modification for processing foodgrains like wheat and other coarse cereals. Processing of fruits and some vegetables may also be explored.

Adequate financial support from financial institutions with necessary built-in insurance packages that take care of possible risks will be a pre-condition for the processing units to flourish locally.

There is a concern about local availability of adequate farm labour to take care of imminent harvesting. If needs be, necessary provisions in the guidelines of MNREGS may be introduced — even as a temporary, one-time measure — to include payments to farm labour under its ambit. Even family labour can be paid out of the designated funds. The migrant labourers who could make it to their villages would be compensated for their loss of existing livelihood opportunities.

These measures, if implemented in letter and spirit will play a big role in protecting a large part of the Indian economy from the shocks that present pandemic brought in. One may rest assured that the flow of urban migrants would also be arrested considerably in the longer run, as the rural population will find livelihood opportunities nearer home that are too attractive to look for a greener pasture in urban India.

The writer is Professor, OP Jindal Global University and Visiting Fellow, RIS. Views are personal

Published on April 10, 2020

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