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Evidence has poured in from different regions that the national lockdown imposed due to the Covid-19 outbreak has caused unprecedented damage to fruit (grapes, watermelon, capsicum, jackfruit, mango, etc), vegetable and flower producers.
There is no transport to take harvested crops to the market; farmers have been disposing off produce at throwaway prices. Why is our farm sector not prepared to face this kind of catastrophe?
A study carried out by scholars from Jawaharlal Nehru University using market arrival data of over 1,331 mandis showed a reduction of 94 per cent in arrivals of wheat, 94 per cent in chickpea, 96 per cent in mustard, 59 per cent in potato, 70 per cent in onions and 26 per cent in tomatoes in the first 21 days of lockdown as compared to the corresponding period last year.
This occurred because of the drop in bulk purchases from hotels, marriage halls, temple festivals and others. Household demand fell because of poor purchasing power and disturbance in the supply chain. The sharp drop in arrivals of commodities did not help farmers get a better price in the market. A report says that the market prices of many rabi crops were ruling much below MSP during the last month.
Sunny side
On the other hand, amidst the coronavirus lockdown, reports of farmer producer organisations (FPOs) exploring alternative marketing channels to connect directly with consumers continue to pour in from various parts of the country. For instance, Sahyadri Farms of Nashik, a leading FPO with 1,200 farmers, reportedly sold vegetables and fruits worth over ₹4 crore during the lockdown period by establishing a direct link with 57,000 customers.
In a social isolation environment, farmers’ collectives such as FPOs can work as the only trusted connect between farmers and consumers. Although many FPOs have been established in different parts of the country with the support of the Union government, more farmers need to be included.
This lockdown provides an opportunity to focus on making the agriculture supply chain robust in all circumstances. Certain well-crafted crucial initiatives need to be implemented on a war footing.
The first and foremost is to enable farmers to sell their produce without any hassles; this is in view of a lockdown scenario wherein transport facilities are curtailed, and given the inability of the vast majority of the resource-poor marginal and small farmers to directly transact at APMC or in other wholesale markets. Therefore, as announced in the Union Budget 2018-19, arrangements should be made to develop and upgrade the marketing infrastructure of all the existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) so that farmers can sell their commodities without travelling long distances.
Food processing
The other requirement, apart from creating FPOs and rural haats , is to increase processing capacity.
Though the country has created 162 million tonnes of warehousing, cold storage and reefer van facilities, a majority of which are available for foodgrains alone; very limited capacity is available for fruits and vegetables which are highly perishable. As announced in the Union Budget 2020-21, speedy steps are needed to set up efficient and big-sized warehouses with cooling facilities at the block level through the PPP model.
Massive efforts need to be taken not only to increase the produce handled by FPOs, but also to establish them across the country through NGOs with a proven track record. Given that farmers cultivating vegetables, fruits and flowers are the worst hit due to lockdown, the need for a robust food processing sector has emerged. This can go a long way in helping farmers to get a reasonable price.
The lockdown experience has further strengthened the need for expanding role of Electronic National Agricultural Marketing (e-NAM), an important initiative of the present government introduced during 2016. Under e-NAM, agri-commodities can be sold in a transparent way from one State to another free from middlemen. Over 1.66 crore farmers and 1.28 crore traders have already registered with it. State governments must connect their mandis with e-NAM wherever possible.
For all these to happen, the existing landscape of policy incentives that favour the two big staples of wheat and rice has to change. India became the second-largest producer of vegetables and fruit in the world and first in the production of banana, mango, lemon, papaya and okra. The horticulture sector exceeded the production of foodgrains with total production of 311 million tonnes. These achievements carry no meaning if they don’t help producers of these commodities; per day income of farm household was only ₹298 in 2016-17. Coronavirus provides a big opportunity to change tack on agriculture, making it market-centric.
Narayanamoorthy is former Member (Official), Commission for Agricultural Cost and Prices, and Alli is Senior Assistant Professor in Economics, Department of Social Sciences, Vellore Institute of Technology. Views are personal
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