While our immediate priority must be to protect people from the pandemic and contain its spread, ensuring food security and preventing more people to fall below poverty line (BPL) should also be on focus.
- Ashok Vishandass and Nitisha Thakwani
The COVID-19 pandemic is not just a public health emergency but the crisis goes far beyond that. It has impacted policy and regulatory instruments, agriculture, manufacturing, transportation, services besides impinging on psychology of citizens at large. It is different from other significant crises such as World Wars or even cyclone, or Tsunami and a total shutdown which the world has never seen in the past.
Covid-19 may be temporary but its impact is to stay for an ‘indefinite’ time period. It has high stakes and even higher uncertainty. While our immediate priority must be to protect people from the pandemic and contain its spread, ensuring food security and preventing more people to fall below poverty line (BPL) should also be placed in the forefront of the agenda. Pandemics impact our ability to get food, especially the vulnerable class. The Government must work to avert this dual crisis of lack of food security and rising number of people in the BPL as COVID-19 hits hunger hotspots.
With more than comfortable level of food grains stocks with FCI at 73.85 million tonnes, record high level of foodgrains production at 292 million tonnes in 2019-20 and stocks-to-use ratios of key food commodities near record highs, there would have been no cause of concern in the normal times.
However, disruptions in food supply chains result in food security concerns. Due to quarantine regulations, logistical hurdles, inadequate availability of labourers and drivers have led to increase in ‘transportation and distribution’ costs. Transport constraints are drastically affecting the supply of fertilizers, pesticides and other agricultural inputs will witness lower yields later in the year. The shuttered restaurants and less frequent shopping trips are curbing demand and will ultimately depress prices. Reduced labour mobility threatens to leave some crops rotting in the fields and deprive producers of their livelihoods. All these have resulted in a ‘paradoxical’ situation wherein prices are high at the consumer level on one hand, lower price realisation by farmers due to ample harvests on the other. Juxtaposing this on the fact that India is net agriculture exporting country and trade restrictions / border closures are affecting the agriculture exports. Given India’s heavy dependence on imports of edible oils, domestic consumers will end up paying higher prices of this commodity. At the end of the round, there is a wedge between consumer and producer prices of food. This, in turn, will lower the income levels of farmers and some of them could find themselves BPL.
There is heavy reliance on migrant workers in agriculture sector and there is wide spread reluctance of agriculture labour to travel in the wake of current Covid-19 which is already affecting agriculture activities as our agriculture continues to be labour intensive, given low level of farm mechanisation and scanty adoption of technology. Due to shortage of labour, just by way of an example, farmers resorted to direct seeding of paddy in April, 2020 instead of transplantation. This coupled with shortages of inputs, movement restrictions will adversely impact productivity, income levels of farmers and agriculture labourers. Leading up to the pandemic, a large number of labourers and most vulnerable would face a double crisis – hunger and COVID-19 in rural areas, notwithstanding the policy of ‘free food’. There is a huge gap between policy prescription laid down by the Centre / State Governments and governance /implementation.
In a BPL household, a child malnourished at a young age will be stunted for life. According to ILO, about 400 million workers from India’s informal sector are likely to be pushed deeper into poverty due to Covid-19 and inequality will worsen. Non-farm income from wages and salaries, through migrant labour was an important source of income for households. This is now severely hit and is likely to lead to poverty. As the number of infections among populations who are already malnourished, weak and vulnerable to disease grows, a crisis within a crisis could emerge.
India’s agriculture gross value added (Ag-GVA), as estimated by the Ministry of Statistics and Programme Implementation (MOPSI) in February, 2020, was likely to be Rs. 32.54 lakh crores in 2019-20 or Rs. 2.71 lakh crores per month on an average. Out of this, annual agri-exports were expected to account for about Rs. 2.80 lakh crores or Rs. 0.23 lakh crores per month. Based on back of envelope calculation, the adjusted Ag-GVA (adjusted for Covid-19 impact) growth would work out 1.9% in 2019-20 against 3.7% as per first advance estimates of MOPSI, assuming 18% low realization of prices inspite of higher MSPs and about 50% loss of exports in March, 2020.
However, losses in Ag-GVA will be of higher magnitude at Rs. 72,149 crores per month from the months of April, 2020 due to no exports and consequent subdued farm gate prices as a result of excess supply in the domestic markets. Let us remember that India is one of the largest exporters of cotton and rice, just as examples, and if agri-exports remain infeasible for the next two months too i.e. till the end of June, 2020, agri-GVA is likely to register a negative growth rate of (-)4.4% in 2020-21.
The Government must provide small holder farmers and herders with seeds, tools, livestock feed and other inputs, along with animal health support so they can continue to produce food and generate income. All agriculture activities need to be included ‘works under MGNREGA’ during the lockdown period to ensure wages of labourers working at famers’ fields are paid out of the Government’s exchequer. This will be a win-win situation as it will reduce the cost of production and uplift the agriculture sector on one hand and unemployed labourers will get work close to their villages on the other. People are looking upto leadership and the leadership must do new things that have not been done before, give psychological safety and hope to farmers and workers alike.
- Ashok Vishandass is Professor (Applied Economics) at Indian Institute of Public Administration and former Chairman (CACP), Ministry of Agriculture and Farmers Welfare, New Delhi. Nitisha Thakwani is MBA (IIM-K), and is a free lancer. Views expressed are the authors’ own.