Impact of the pandemic on Agriculture

  • Peak harvest with no procurement
    • Since the lockdown, India has peak of Rabi season and Kharif seasonin India and crops like wheat, paddy, gram, lentil, mustard, etc. (including paddy in irrigated tracts) were at a harvestable stage or almost reaching maturity.
    • This is also the time when the farm harvests reach the mandis for assured procurement operations by designated government agencies.
  • Labour unavailability due to reverse migration
    • The non-availability of labour has hurt operations in many parts.
    • Consequently, the shortage of migrant labourhas resulted in a sharp increase in daily wages for harvesting crops.
    • Some parts of agriculture that have the luxury of deploying technology for harvestings, like Paddy and Wheat, are relatively more insulated since they often do not have to depend on large numbers of manual labour.
  • Fall in prices
    • Agricultural prices have collapsed due to lack of market access including the stoppage of transportation and closure of borders.
    • The rise in labour costs and lack of access means that farmers are staring at huge losses and hence allowing crops to rot in the fields, a better ‘stop-loss’ mechanism.
  • Scarcity of public goods
    • Making the food grains, fruits and vegetables and other essential items available to consumers, both in rural and urban areas, is the most critical challenge.
  • Transportation of public distribution system (PDS) items to last-mile delivery agents, by both rail and road, has been severely impacted in the beginning.
  • Restrictions on Sale
    • There were self-imposed restrictions on the inter- and intra-Statemovements of farmers/labourers, as well as harvesting and related farm machines.
  • Disruptions in supply-chain
    • The absence of transport facilities clubbed with vigilant blocking roads has a limiting effect on the movement of migratory harvest labour and agri-machinery.
    • Also, trucks and tractors are not inclusive of ‘farm machinery’ by definition.
    • This has led to glut in production with farmers dumping their produce by the streets.
  • Poor storage facilities:
    • The Planning Commission had long ago estimated the gap between agri-warehousing supply and demand at 35 MT, which is still not fulfilled.
  • India’s current cold storage capacity at 25 MT is barely sufficient for 10% of fruit and vegetables produced in the country.
  • Lockdown induced debt and Cash Flow Constraints
    • The most important issue that farmers have to surmount is the problem of repaying their crop loans, gold loans and other informal debts.
    • Crop loans are usually repaid between April and May and a fresh loan is granted at the onset of a new season.
    • Any failure to do so will mean that they will be forced to borrow money from the informal sector at high rates of interest for the new season.
  • Impact on Food Security
    • Border closures, quarantines, and market, supply chain and trade disruptions are restricting people’s access to sufficient/diverse and nutritious sources of food, especially in countries hit hard by the virus or already affected by high levels of food insecurity.
    • In slowdown times, as demand for food will decrease over the next months, prices should go down in 2020, and this will have a negative impact on farmers and the agricultural sector.
    • As of now, disruptions have been minimal as food supply has been adequate and markets have been stable so far to meet the ongoing demands though skewed.