Easing of lockdown restrictions to revive Indian economy may suggest end of Covid-19 ordeal for agriculture. But gaps in food value chains show fight is far from over.
Accustomed to healthy demand, India’s vegetable and fruit growers were in for a rude shock when the coronavirus pandemic hit. Since these commodities diversify farms and boost nutrition, there is a need for creating multiple market avenues, including e-platforms and links with processors, to minimise risk and prevent a glut that can crash prices once the lockdown is lifted.
Following the Union government’s recommendations, many states temporarily suspended the Agricultural Produce Marketing Committee (APMC) Act and let farmers sell farm produce anywhere. This is an opportunity to develop consensus across states to reform agricultural marketing and minimise restrictions on movement and sale of agricultural commodities. Also, agro-processing enterprises should be allowed to buy produce directly from farmers and back-linkages to farms must be encouraged.
Taking the initiative, the Madhya Pradesh government modified the MP Krishi Upaj Mandi Act. Other states should follow suit.
Even under reformed agri markets, farmers need price information. A central project can help create a dashboard, like indices displayed by stock exchanges, to inform everyday prices of major agriculture commodities from major markets.
If needed, governments could engage professional private warehousing companies to procure farm produce. SMS-based pre-registration systems have been used to regulate the arrival and manage logistics for agri-produce in Madhya Pradesh. Such innovations can be deployed in all states.
Previously, the NITI Aayog recommended a differential price payment scheme for crops, which Madhya Pradesh implemented as Bhavantar Bhugtan Yojana. Using the scheme will avoid panic selling when the markets become operational and assure farmers reasonable returns.
Digital, digital, digital
The coronavirus crisis has shown how digital technologies can make supply chains functional and resilient. Problems can be forecast and temporary shortages addressed to preserve food chains. New technologies could facilitate the supply-demand interface, which would greatly help perishable goods. Horticulturalists are among the most affected owing to problems in harvesting and sale of produce.
To help them, Haryana roped in nearly 81 farmer producer companies (FPCs) that aggregated vegetables and fruits from their member-farmers and supplied it to end-consumers. Such farm-to-market linkages can see greater involvement of agri-tech start-ups post the Covid-19 crisis. Supportive actions for e-commerce and delivery companies will strengthen agri-supply chains. Governments can also initiate mobile procurement of crops with the help of the National Agricultural Cooperative Marketing Federation of India (NAFED).
Dairy, a key source of nutrition, cash and stability for rural livelihoods, has brought significant losses to smallholders, especially those that link to vendor-driven milk markets. To prevent such losses in the future, there is a need to create local milk grids at sub-regional levels, and connect vendors and organised dairies, processors and input suppliers through digital platforms that can leverage improved technology, inputs and market information.
Forget not the ‘man’ in management
India’s agri-food systems support half its workforce and associated small, medium and large industries. These enterprises are connected to other sectors that use raw material from agriculture and inputs to it. Many rural migrants work in the industry and services sectors. The Covid-19 crisis has exposed how an upheaval impacts migrant workers, rural wages, livelihoods and the rural economy while dampening overall demand.
A safety net for semi-skilled and skilled migrant workforce has to be created. A national-level Aadhaar-linked database will improve the targeting of support to agricultural migrant labourers during crises and let them travel within and across states. The One Nation One Ration Card (ONORC), which entitles beneficiaries to claim subsidised food irrespective of their place of residence, would surely help soften hardships. Implementing the ONORC will require revamping the public distribution system (PDS) by designing evidence-based instruments that may include physical delivery and food stamps.
Until the crisis ends, National Rural Employment Guarantee Scheme (NREGS) funds could be used to pay a part of the farm labour wages — farmers would pay the balance — to lessen the farmer’s monetary burden and provide landless labourers and workers wage employment (Kareemulla et al 2013).
Scarcity of farm labour has been a growing concern for agriculture. Policies must incentivise and facilitate the availability of machinery through state entities, FPCs or custom hiring centres (CHCs). Small farms must be mechanised while R&D efforts must be intensified and business models innovated. Access to farm machinery can be improved by making the inventory available at block or sub-district levels. The launch of Kisan Rath app is proving to be a boon; 1.5 lakh farmers and traders have already registered to avail the app’s services.
Capital and credit
Shortage of capital is a major constraint for agricultural productivity enhancement and diversification. It is more pronounced now given the disruptions in harvesting and markets. Coverage under the Pradhan Mantri Fasal Bima Yojana (PMFBY) needs to be extended to all farmers, including those not enrolled in the scheme. Farmers of high-value commodities need to make higher capital investments and thus need to be compensated through the PMFBY.
Semi-urban and urban unorganised or small and medium-sized enterprises (SMEs) carry out many of the agri-food sector’s tertiary activities. The Covid-induced lockdown has been detrimental to their operational viability and will impact farmers as well. These enterprises facilitate post-harvest handling and processing of agriculture produce; supporting them would maintain value chains and keep the markets afloat for farmers. Reasonable credit lines from banks, especially during the crop season, will help these SMEs manage the crisis and add value agriculture.
Decentralise, go local, diversify
Supply of vegetables and fruits has been constrained for people in urban India. This situation can be used to encourage urban households to grow food, especially vegetables, where possible. Urban gardens would add to dietary diversity and make safely produced vegetables available, particularly leafy greens, with a smaller environmental footprint. Agricultural research institutions are equipped to develop a suitable package of agronomic practices to facilitate urban farming.
Going ahead, investing in developing diversified local food systems, particularly in tribal areas and other vulnerable regions, steeped in poverty, food and nutrition insecurity, must be prioritised. A shift in the implementation of government schemes such as Nutrition and Millets Missions to include local solutions for achieving sustainable diets for people in these regions will contribute here.
The food policy mandates a buffer stock for a certain number of months at the national level. This crisis has revealed the need for regional and communal buffer stocks, especially in poor households, for at least two months.
In the future, climate change may result in Covid-19 like global shocks. We need to promote decentralised food systems that encourage regenerative agriculture and make the local food environment and systems resilient. A post-Covid situation offers a unique opportunity to repurpose existing food and agriculture policies for resilient and healthier food systems. Structural reforms such as land leasing, contract farming and privatisation of agricultural markets have been under deliberations for quite some time with limited progress in implementation. The political dynamics relating to excessive price support, procurement operations and the PDS favouring few calorie-rich crops need to change for a diversified agricultural production system.
Initiating system-wide measures can ensure agriculture exits the current crisis with the prospect of becoming resilient.
About the authors:
Markets, Institutions, Nutrition & Diversity
Dr Anjani Kumar
Research Fellow, South Asia Office,
International Food Policy Research Institute (IFPRI).
Views from the authors are personal.