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Business News/ News / India/  Corona has pushed Bharat to the brink

Corona has pushed Bharat to the brink

  • A prolonged lockdown will hurt farmers about to harvest the winter crop and the landless living on daily wages
  • Continued disruption in the food supply chain will eventually hit consumers if prices vary widely across regions. This uncertainty has also hit 70 mn households in rural India who own small dairies

A farmer crushes his cabbage crop as there are no takers for it, in Kadoli, Karnataka, on Wednesday.

NEW DELHI:Baburao Sanap has no clue how to pull himself out of a big mess —he’s saddled with 40 tonnes of fresh grapes and a loan of 40 lakh. “Corona is worse than notebandi," Sanap said, recalling the ban on high-value currency notes announced in November 2016.

Then, payments were delayed, farm gate prices crashed and people were scrambling for cash. Now, there is no labour available to work on the fields—most have either run away or are afraid to step out. There are no buyers in wholesale markets, as traders have stopped taking calls from farmers. Even container ships are not available to export the premium grapes from Nashik in Maharashtra where Sanap farms.

“I am finding it hard to even dry the grapes to make raisins... the chemicals are not available in the market," Sanap told Mint over the phone.

Some 600km away, Devilal Patidar, a farmer from Mandsaur district of Madhya Pradesh, had to throw about 20 quintals of guava which he usually sends to a wholesale market in Delhi. Another 20 quintals will be ready in a few days which are also likely to be dumped, taking his total loss to over 2 lakh.

The milk Patidar sells gets him 20 a litre now, about two-third the price he received a fortnight ago. “Dairies are only transporting liquid milk, they are not processing it to make other products so we are making a loss in milk too," Patidar said.

As the Indian government announced a countrywide lockdown on 24 March in an attempt to stop the perilously-agile coronavirus in its tracks, Sanap, Patidar and millions of others residing in the rural hinterland are staring at an uncertain future.

The sudden announcement of a countrywide lockdown has thrown life out of gear for most Indians. But for farmers who grow high-value perishable crops, it has led to an immediate and severe financial blow.

The Centre has allowed wholesale markets to function as well as transport of all food items across the country, but in reality, the food supply chain is anything but smooth. Trucks and migrant labourers working in wholesale markets are in short supply and small retailers in urban centres are finding it difficult to access mandis due to lack of transport facilities.

A bigger crisis may unfold when farmers across India begin harvesting winter crops like wheat, chickpeas and mustard beginning April. Will government procurement at support prices function normally? Any disruption in peak harvesting season will hurt small farmers disproportionately since they usually sell their produce right after harvest to repay loans and fund the next crop.

Uncertain harvest

Sandeep Singhroha, a farmer from Haryana, summed up a 40-minute phone conversation around the lockdown with the following words: “system hang ho raha hai" (the system is getting stuck). In March, Singhroha’s wheat crop was damaged by a freak hailstorm. The crop loss assessment began in his village in Karnal district on 21 March, a day before Prime Minister Narendra Modi appealed for a day-long public curfew.

The loss assessment for insurance claims got stuck as a total lockdown was announced a few days later. “In a week I will be harvesting the wheat crop. There will be nothing left to assess," Singhroha said.

However, Singhroha and farmers across the country are more worried about the impending harvest season. Going by estimates from the agriculture ministry, farmers will be harvesting a record 326 million tonnes of foodgrains and oilseeds beginning April which is the peak harvest season for the winter crop.

“We have been asked to delay the harvest till 20 April or store the harvest and not bring it to wholesale mandis," Singhroha said. What is unclear is how farmers will store such large huge quantities. If the harvested crop is left in the field, it runs the risk of getting spoiled by a sudden spell of rain or hailstorm.

Further, government procurement at minimum support prices is likely to be delayed. Farmers looking to sell their crops in wholesale grain markets will also face a shortage of buyers who in turn will be struggling to find casual workers to sort, grade and load the produce.

If harvesting and procurement is delayed and farmers’ are unable to make money, it is likely that summer planting will be severely affected, fears Amith Agarwal, executive director at Star Agriwarehousing and Collateral Management Ltd.

According to Agarwal, there is a severe liquidity crunch and nearly everyone, from wholesale traders to retailers are conserving cash. So commodity prices have tanked not just for perishables but for pulses and oilseeds too. In Maharashtra, farmers are willing to sell chickpeas for as low as 25 a kg while in Rajasthan farmers are looking to sell mustard at 34 per kg, significantly lower than government-announced support prices.

Few days after the countrywide lockdown was announced the Centre exempted wholesale crop markets and allowed all agencies to procure from farmers. Yet major markets in states like Madhya Pradesh and Maharashtra dealing in grains, pulses and oilseeds have shut their operations. The final call on agriculture marketing rests on states as the Centre can only issue advisories.

If the lockdown continues

A larger risk to farmers will emerge if the lockdown is extended beyond 14 April. Mandis are essentially aggregation centres where a large number of farmers, traders and labourers gather during the peak harvest season. For instance, in the Ujjain or Indore mandi in Madhya Pradesh, the crowd can swell over 5,000 in a day. The process of auction where traders and farmers huddle together in close proximity is essentially a physical process which raises the risk of spreading infection.

So, if the lockdown is extended and grain markets remain shut, farmers will likely resort to fire sales. “The way out is to allow and encourage decentralized procurement at the farm level," said Yogesh Dwivedi, who manages a consortium of farmer producer companies in Madhya Pradesh with over 1,60,000 grower members.

Telangana has announced such a scheme where the entire paddy and maize crop will be purchased from farmers at support prices through village-level procurement centres. It remains to be seen how smoothly the new system functions.

The Centre, however, is yet to announce a plan to streamline procurement or stem the collapse in farm gate prices. The relief package unveiled on 26 March promised an advance payment of 2,000 from the direct cash transfer scheme (PM-Kisan) and a moratorium on loan repayments which is not enough for cash strapped farmers.

A continuing disruption in the food supply chain will eventually hit consumers if prices fluctuate widely across regions. For instance, tomatoes are now selling in growing areas at throwaway prices of 2 per kg, while consumers in the national capital are paying 60 per kg.

Milk blues

The uncertainty faced by farmers growing perishables like fruits, vegetables, grain and pulses has also impacted 70 million households in rural India who own small dairies. For them, cattle rearing is a regular source of income unlike crops which are usually sold twice a year, during peak harvest seasons in April-May and October-November.

Earlier this week, social media was replete with images of dairies in Karnataka pouring hundreds of litres of milk into a canal and those in Maharashtra feeding ripe strawberries to cattle.

Over the past year, cattle-feed prices have increased sharply (from 900 to 1,300 per bag) but since 15 March milk prices have fallen to 20-25 per litre (from 30 a litre), said Ganesh Barge from Baramati in Maharashtra. He sells 200litres of milk daily. According to Barge, sales of milk products, be it sweets, ice creams or cottage cheese, fell sharply in the past two weeks. If prices fall any further, he will incur heavy losses.

“I am unable to harvest the sugarcane crop as labourers (who usually come from other districts within Maharashtra) have left for their villages fearful of the rapid spread of the virus. Nor can I sell my fodder crop as mandis are shut," Barge said.

Demand for milk products has fallen sharply since the hotels, restaurants and the catering industry is practically shut, said Srikumar Mishra, managing director of Milk Mantra, an Odisha-based dairy company. Liquid milk volumes procured by the firm fell by 30% over the past few weeks.

“The front-end is severely hit with many retailers shutting shop. Even landlords are not allowing some of our workers to step out of home," Mishra said. Milk and milk products are usually sold via an extensive network of small shops. Not more than 60% of these are functional in Odisha. The panicky consumer is also purchasing only what is really essential. For the masses, this isn’t the time to relish a scoop of ice cream.

The other half

But, farmers make only a part of the distress story unfolding in rural India. Daily-wage earners and migrant labourers are undoubtedly the worst hit. Hundreds and thousands are now stuck in different states, away from their homes. An estimated 500,000 to 600,000 were walking barefoot to their villages (the government informed the Supreme Court on Tuesday), hoping to cover hundreds of kilometres on foot, dependent on public generosity for food and water during the arduous journey.

In the villages in remote Bundelkhand region of Uttar Pradesh, there is a palpable sense of fear around the (covid-19) disease, said Raja Bhaiya who runs a rights-based non-profit in Banda district. Returnees are now lodged in quarantine camps in schools but it is unlikely they will find employment in villages post lockdown as people fear they may contract the disease from the migrants, he added.

Even the nomadic tribes are not spared. The Kushbandhiyas in a small hamlet in Banda, for instance, were unable to move around even before the lockdown was announced. “We used to roam in villages selling traditional grinders and trinkets but no village is allowing us to enter. For households who are excluded from the PDS (food security scheme), arranging a square meal a day is difficult now," said 32-year-old Raja, who is also a panchayat ward member from the hamlet. “If corona does not kill us, hunger will."

Earlier this week, Sanjay Sahni, a social worker from Bihar’s Muzaffarpur district, received a call from a woman dependent on daily wages for survival. “All she wanted was a bottle of mustard oil to tend to her new born child," he said.

Sahni added that the state government is distributing free food for the poor affected by the lockdown. The destitute are made to stand in queues for hours but the food gets over fast, so many go hungry. Migrant workers who managed to return are often treated like criminals, ostracized by fellow villagers.

Take for instance, 32-year-old Gonaur Paswan, who returned to his village in Muzaffarpur after being on the road for six days, after covering a distance of 900km. Paswan left after his employer, who owns a small steel factory in Kasganj, Uttar Pradesh, asked workers to pack up and exit on 23 March, a day before the countrywide lockdown was announced. Paswan and seven other labourers walked and hitchhiked on trucks—by the time they reached Muzaffarpur, Paswan was left with 60.

On reaching his home district, Paswan was made to do rounds of the local school, the police station and the primary healthcare centre for a check up. He now lives outside the courtyard of his own house—isolated. Being the only earning person in an eight-member household with four children, his daily meals are contingent on the generosity and mood swings of a local grocer.

Around noon on Thursday when I spoke to Paswan over the phone, he was yet to have a morsel. But what hurt Paswan the most is how neighbours and friends have treated him.

“They won’t speak to me, even from a distance. No one cares if we are dead or alive."

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Sayantan Bera

Sayantan Bera is National Editor with the Long Story team at Mint, writing on food and nutrition, agriculture, environment, and the rural economy. His work ties notes from the field with larger economic trends. A journalist with over fifteen years of experience, he writes for the curious reader.
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