Farmers lose Rs 20,000 crore as fruits and veggies perish

Published: May 11, 2020 8:27 AM

Farmers may have lost at least Rs 20,000 crore during the lockdown period so far, as parts of fruits-and-vegatables produce perished due to transport gridlocks and labour paucity.

If the lockdown proves to be a three-month affair, the farmers’ losses could swell to Rs 50,000 crore, if not more.If the lockdown proves to be a three-month affair, the farmers’ losses could swell to Rs 50,000 crore, if not more.

By Prabhudatta Mishra

Farmers may have lost at least Rs 20,000 crore during the lockdown period so far, as parts of fruits-and-vegatables produce perished due to transport gridlocks and labour paucity. This assumes, on the basis of inputs from sources in the trade and farmer communities, that mandi arrivals of these crops during the lockdown days have been nearly a third lower than usual (see chart). If the lockdown proves to be a three-month affair, the farmers’ losses could swell to Rs 50,000 crore, if not more.

In fact, the extent of losses would have been higher unless the mandi arrivals improved in recent weeks. Arrivals of fruits and vegetables have picked up since April 15 after several mandis were opened and the government swung into action to ease movement of trucks, including inter-state ones. While the mandi arrivals were down by a half (year-on-year) until April 10, the average drop has now narrowed down to a third.

“Unless the situation is completely normalised, farmers will not be able to sell their produce in a seamless fashion. The demand has also slumped due to the closure of eateries,” asked V M Singh, convenor of All India Kisan Sangharsh Samiti. He also asked the government to procure all crops including fruits, vegetables at minimum support prices, as an emergency measure.

There is technology available to keep the vegetables under cold stores, which is very capital intensive and only high value crops can be put there, said B B Patnaik, former chairman of Central Warehousing Corporation (CWC). Besides, vegetables like cauliflower, cabbage and brinjal were used to be consumed within days after harvesting, so there was never any necessity felt to develop cold storage facilities earlier, he said.

Logistics is another factor that contributed to the overall drop in mandi arrivals. Amid reports that inter-state movement of trucks was not smooth due to local authorities insisting on separate passes other than national permit licences, the Centre had last week wrote to the state governments, asking them to ensure this practice is stopped forthwith and its April 15 guidelines in this regard are truly complied with.

As many as 3.6 lakh national-permit trucks plied on Indian roads on April 30, up from 1.5 lakh on April 20 and 1.2 lakh on April 12, in what indicates a gradual improvement in inter-state commerce. However, it would be a long road ahead before the plying rate returns to over 10 lakh vehicles or 70% of the NP-registered that prevailed before the outbreak of Covid-19 pandemic.

“Farm-gate prices of perishables have fallen as the supply chain has been disrupted with trucks not plying. Also, all shops are closed, so there is no demand for products like milk, poultry and egg. The major problem is while farmers are unable to get values for their crops, at consumers’ end, prices have not declined,” noted economist Ashok Gulati had said last month.

The value of fruit and vegetables produced in the country – at prices realised by farmers – was Rs 5 lakh crore in 2019-20. Production of fruit in the last fiscal was estimated at 95.74 million tonne and that of vegetables at 188 million tonne.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Covid blues: Wedge between CPI, WPI widens
2Unemployment rate falls to pre-lockdown level; CMIE says fall in labour participation ‘debilitating’
3Rescuing HFCs: NHB disburses record Rs 25,000 crore in just 4 months