In these gloomy times, spotting any good news is difficult. Yet, we can have some satisfaction that, so far, India seems to have contained the mortality rate from Covid-19 infections at around 3.3%. This is much lower than the global average of about 7%, and that of countries like the US (5.8%), Spain (11.6%), Italy (13.7%), the UK (15.4%), France (14.7%), and even Germany’s (4.1%). But, India is certainly not out of the woods yet. The real test will come when the lockdown is lifted.
Next to saving lives from the disease, comes the necessity of food to survive. On the food front, too, India has done reasonably well. Despite initial disruptions in supply lines of food, India has somehow managed to feed its large population of 1.37 billion. There have been no large-scale food riots, and no major flaring up of food prices for consumers. In fact, if there is any complaint, it is from the producer side, that prices of perishables collapsed in certain pockets. But, from the consumer point of view, even for perishables like milk and vegetables, supply lines were quickly restored, and food is easily available in the markets at reasonable prices. On keeping supply lines for essential food alive and running, those in the government managing food logistics surely deserve some compliments.
But, the biggest compliments must go to the states that have done a remarkable job of procuring the main rabi crop, wheat. A seamless procedure of issuing tokens to farmers, opening several thousand additional procurement centres for wheat, even in rice mill compounds, and logistics to procure and move it to deficit states is commendable. Within the first three weeks of the wheat procurement season (by May 7), 21.6 million metric tonnes (MMT) of wheat had already been procured. Punjab led the way with 10.4 MMT, while Haryana procured 5.1 MMT, and Madhya Pradesh 4.8 MMT.
These three states have done a great job of ensuring farmers get the minimum support price (MSP) of Rs 1,925/quintal. But, Uttar Pradesh, which is the largest producer of wheat, and Bihar have languished. Their wheat farmers, especially from eastern UP onwards to Bihar, are getting prices as low as Rs 1,700/quintal to Rs 1,850/quintal. Nevertheless, since farmers of the largest rabi crop have got reasonable money in their pockets, they are doing brisk buying of inputs for the kharif crop, from seeds to fertilisers. And, since the meteorological department has forecast a normal monsoon, we hope India’s food situation will remain quite comfortable in FY21.
Interestingly, agriculture still engages the largest chunk of India’s workforce, almost 44%. And, it may be the only sector registering a respectable positive growth this year, as almost all other major sectors are expected to plummet to negative growth territory. This would help absorb the shock of coronavirus on extreme poverty and malnutrition. I will take up more on this in my next piece. Suffice it to say here that we need to build on the success and resilience of agriculture. It cries out for reforms that can help farmers get a better price for their produce even as consumers pay a reasonable price for food.
This calls for large scale reforms in agri-marketing as well as the Public Distribution System (PDS). While the APMC markets can keep doing their business as usual, it is time to open channels for buying directly from farmers and farmer producer organisations (FPOs). Any registered large buyers, be it processors, retail groups, exporters, etc, must be encouraged with a single, all-India licence, and exempted from any market fee or other cesses as they will not be using the services of APMC market yards. e-NAM can flourish if grading and dispute settlement mechanisms are put in place.
Private mandis with modern infrastructure need to be promoted in competition with APMC. On the PDS front, we need to move towards cash transfers that can be withdrawn from anywhere in the country.
As they say, the wise and brave convert a crisis into an opportunity for reform, and here is an opportunity knocking at PM Narendra Modi’s door. He can always get these reforms expedited, at least, in BJP-run states. Some initiative has already been taken by the Madhya Pradesh chief minister, and even Uttar Pradesh is now moving along those lines. But, much more can be done to put India’s agri-marketing and PDS system on a more efficient path, with less leakages.
There is, however, one area in which India has failed miserably in handling the lockdown and its effects—the issue of migrant labourers. The first mistake was imposing lockdown 1.0 from midnight of March 24, without any advance warning. The next day, hundreds of thousands of migrant labourers thronged the railway stations and inter-state bus terminus, only to be disappointed that all means of transportation have come to a grinding halt. Thankfully, this did not result in large-scale riots, but the poor migrant workers started walking on foot for thousands of kilometres.
They did not receive the attention and care they needed either from our political class or from the administration of state and central governments. This is a blot not only on the government’s mishandling of the corona crisis but also on every citizen of India who cares for the well-being of its people. It was painful and shameful to watch even pregnant women walking for days together to reach their homes in villages. They surely deserved much better treatment as human beings.
Finally, the time for immediate relief has almost run out. The recovery of the economy, whether it is V-shaped or J-shaped, depends on the package that the government announces, which must include built-in mega reforms. This is a test of the Modi government’s wisdom and boldness. Timidity will not help.
Infosys Chair Professor for Agriculture, ICRIER. Views are personal