The pile-up of harvested or un-harvested perishables may have caused farmers a loss of around Rs 15,000 crore. Market arrivals of fruits and vegetables have sharply fallen since the imposition of the lockdown.
By Nanda Kasabe, Prabhudatta Mishra & BV Mahalakshmi
The pile-up of harvested or un-harvested perishables may have caused farmers a loss of around Rs 15,000 crore. Market arrivals of fruits and vegetables have sharply fallen since the imposition of the lockdown (see chart), and if it is extended by another month, losses could swell to Rs 40,000-Rs 50,000 crore, if not more, traders and economists say.
“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 observed.
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. Currently, market arrivals are less than half the normal levels for key crops, leading to monthly losses of around Rs 20,000 crore, assuming most of the stocks with farmers perish.
FE spoke to fruits and vegetable traders and farmer groups across the country to gauge the situation. Grape farmers from Nashik in Maharashtra are staring at losses worth Rs 1,500 crore, according to Vilas Shinde, managing director at Sahyadri Farms, a farmer producer company. Around 6 lakh tonne of grapes still remain to be harvested, he said, adding that harvesting is now a tenth of the usual level of 1,500 tonne/day.
“Except potato, carrot and beet root, all other vegetables are rotting in fields since small and marginal farmers lack access to cold-storage facilities. Also, many of these vegetables, including leafy ones, cannot be kept in cold stores,” said Subhash Deshwal, a retired colonel growing carrots in Sikandarabad.
Similar sentiments prevail among all vegetable growers surrounding Delhi, which is India’s biggest trading hub for fruits and vegetables. Several places of Haryana such as Sonepat, Kondli, Hapur, Bahadurgarh, Rohtak and
Bakhtawarpur used to send truckloads of vegetables to Delhi everyday. Some of the vegetables like baby corn, mainly grown around Sonepat, have no takers with restaurants and hotels closed.
Maharashtra’s Vashi mandi, which reports average daily trading turnover of Rs 5.5 crore, and the country’s second largest, was shut, effective Saturday after a trader tested Covid-19 positive.
“The system has failed. Mother Dairy, which was set up to buy directly from farmers and sell to consumers, should have been asked to purchase from farmers after lockdown,” said Gaurav Sikri, who works in his family-owned 4-acre farm growing baby corn.
”Market dysfunction hurts both producers and consumers. As per news reports, only a fraction of the nearly 7,000 wholesale markets in India are functioning. For non-perishable output like wheat and pulses farmers have some holding power, and government stockpiles and an existing public distribution system should limit sustained market shortages. But for perishables like vegetables and fruits, this disruption means lower incomes for farmers (nowhere to sell, some are feeding spinach to cows), whereas consumers see scarcity,” wrote Neelkanth Mishra, Abhay Khaitan and Prateek Singh of Credit Suisse.
Farmers at Guntur in Andhra Pradesh, where the largest chilly market yard in the country is located, are seeing no sign of relief, following a huge migrant labour issue caused by the lock-down. Guntur’s chilli market yard has been shut down, according to I Samuel Ananda Kumar, district collector. As the market yard is located in a containment zone, the farmers and traders are facing the heat of the crisis.
According to a rough estimate, the country’s chilli production stood at 25.1 lakh tonnes during this season with Andhra and Telangana making up for nearly 50% of it. The prices of chillies have fallen by 50% and there is no way out for farmers to recover costs, trade source say.
After a bumper crop, chilli farmers were expecting remunerative prices for their produce. According to a farmer from Palanadu Farmer Producing Organisation (FPO), the prices of premium variety such as teja used to command a price of Rs 230 per kg which has now dropped to Rs 160. “Varieties such as teja, huntu and badiga, which are premium export-quality varieties, dropped from Rs 15,000 to Rs 18000/quintal to below Rs 10,000 /quintal,’’ says Venkatesh Reddy, a trader at Guntur market yard.
As per state agriculture department’s estimate, the losses could be over Rs 1,500 crore at Guntur market yard, with these to be borne by small and marginal farmers, traders and the daily wage labourers. In Telangana, where traders are refusing to lift the produce at remunerative prices, huge stocks are piling up at the market yards at Khammam market adding to high storage costs.
Sahyadri Farms’ Shinde says the supply chain for fruits has been broken and only 50 trucks now operate out of Nashik as against the 450 trucks before the lockdown. No manpower is available and therefore harvesting grapes has become difficult, he said. Shinde’s company, which also supplies vegetables and fruits to institutions, have now decided to directly sell these to housing societies in Mumbai and Pune
Shriram Gadhave, president, Vegetable Growers Association of India, has begun a similar initiative through farmer groups in housing societies. According to him, around 40% of the tomato produce still remains to be harvested. Nearly 1500 acres in Junnar Parner, Khed and Narayangaon and nearby areas are under tomato cultivation, with acre yield of 8 tonnes. “The direct auction held at Narayangaon between farmers and traders has come to a standstill due to the lockdown. Normally this auction has a turnover of Rs 150 crore. We have begun sourcing directly from the farmer at our farmer group collection centres but we do not have the capacity to scale up,” he said.
At Lasalgaon- the country’s largest wholesale onion market, it is, however, business as usual with daily arrivals of 13,000 to 14,000 quintals To tackle labour shortage, the market has opted for jute sacks that can be carried by farmers themselves and loaded onto trucks. Farmers are getting average prices of Rs 1,200-1,400 per quintal for the jute sacks, she said, adding that both exports and interstate trade is running smoothly.
Mango growers from Devgad and Ratnagiri in Maharashtra are also reporting losses. Already hit by an extended monsoon last year, the growers now find no demand for mangoes. Ajit Gogate, president, Devgad Mango Growers Association known for the alphonso variety says that they have lost their peak marketing period due to coronavirus. Production has reduced to 15,000-20,000 tonne from a normal level of Rs 40,000 tonne and the farmers are trying to sell directly to customers to cover losses to an extent.