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Global Business Jet Market: Industry Analysis and Forecast 2021-2027

Agriculture and the Pandemic

The COVID-19 pandemic has incapacitated the entire world. The outbreak has created panic to such an extent that economic activities have almost come to a standstill. Different restrictions put in place in order to curb the spread of the virus have adversely affected all sectors of the economy. One of the sectors that received a severe blow is agriculture. Agriculture serves as a means of livelihood for about 45% of the world’s population. In India the percentage is even higher at about 60%. Human beings depend on agriculture for rice, wheat pulses, oils, beverages, milk products, non vegetarian products etc.
Besides the natural factors like climate, land relief, soil and vegetation etc, agriculture is also dependent on other factors like labour, transportation, storage facilities, market for exchange of products etc. During the pandemic this entire structure has toppled. The damage caused due to the restrictions put in place due to the pandemic combined with the panic-stricken atmosphere has not only affected common man but also has hampered the livelihood of farmers. India is an agrarian nation with agriculture accounting for about 17% of the GDP and agriculture serves as the primary source of income for rural people. However, during the ongoing crisis, different issues related to production, storage, transportation, price, demand, supply etc have plagued the agricultural sector and farmers have been the worst hit section of the population due to these issues.
Supply Chain Bottlenecking and Migrant Labourers
Supply chain in agriculture has been affected during the pandemic due to a variety of reasons. Due to the restriction of social distancing put in place, millions of labourers are without work as they used to work in groups prior to the pandemic. Further manual labourers engaged in specialised farm practises usually belong to the migrant labour category. After the lockdown was announced the migrant labourers returned to their native places thereby creating a vacuum in agricultural sector because about 60% of farming activities in India is dependent on manual labour. This has led to adverse effects like unavailability of labourers for harvesting and threshing of standing agricultural crops which in turn has increased the risks of fire, blowing winds, hailstorms etc damaging huge quantities of produce and also the destruction of perishable crops. Social distancing norms combined with fear among the labourers due to the pandemic has prevented them from returning to work even after announcement of relaxations on agricultural activities. Besides the harvesting activities, other activities like loading and unloading, packing, processing etc that used to be done by manual labourers have been severely affected. At places where labourers are available in small numbers, they have been demanding increased pay which has made it difficult for farmers to hire them for work.
In the previous year due to bountiful rainfall and farmers were expecting bumper yield of vegetables and cash crops like pulses and oilseeds. In this backdrop, the damage caused to the crops due to delayed harvesting has caused huge losses. Significant quantities of labour-intensive crops like paddy, wheat, cotton, sugarcane etc have also been damaged due to absence of labourers during the harvest and post harvest season. Further due to restrictions on transportation, the supply to the mandis, agricultural markets and different local distributors has been affected. These restrictions have cut down the supply of agricultural products in the market. In states like Bihar, operators are hired from neighbouring states to operate combined harvesters; this has also been stopped due to absence of labourers. Another issue affecting the supply chain is insufficient and inadequate storage facilities available with the farmers which prevent them from storing the excess produce.
Demand Side Issues
The demand side of agriculture has also been affected due to the pandemic. Even before the pandemic, a decline in the demand for agricultural products was marked which has been aggravated further due to the spread of COVID-19. Reported instances of bird flu and prevalent belief that eating non vegetarian food can cause coronavirus has decreased the demand for non-vegetarian food thereby decreasing the need for agricultural products like maize that are usually fed to the animals in poultry farms. Also spread of such wrong information has adversely affected the poultry farms. Due to lockdown number of hotels, restaurants and catering services are closed which has reduced the demand further as they used to buy different agricultural produce in bulk quantities. Even demand from big retailers, retail vendors or hawkers and domestic demand for fruits and vegetables have declined due to the fear that they may have been handled by too many people thereby may spread the virus. Some of the retail vendors who have resumed work take up only about 20% of commodities from the farmers. But reduced demand from the major consumers’ i.e. the wholesale buyers, hotels, restaurants etc have adversely affected the agricultural sector.
As the hotels, sweet shops and tea shops etc remained close due to restrictions, demand for milk declined and dairy farms have also been affected. Economic slowdown and the expected recession due to the pandemic will lead to lower demand for agricultural products. Demand for exports has also fallen due to the pandemic. For example, prior to the pandemic onion used to be exported to Malaysia and Middle East from Maharashtra but this export has reduced due to the ongoing crisis. Shutdown of industrial activity and restaurants has led to demand crash thereby leading to considerable decline in prices of perishable goods. Other areas from where there was significant demand for vegetables and other products like meat, eggs etc i.e. the government schools and anganwadis have also been affected. After shutdown of schools, the mid day meal scheme also came to a halt. Similarly, shutdown of anganwadis abruptly stopped the supply of supplementary nutrition (in the form of Bengal gram, groundnut, eggs, sweet potato, soyabean, rajma, kabuli etc) to children below 6 years, lactating mothers, pregnant women and adolescent girls. This has led to decline in demand for agricultural products from schools and anganwadis.
Faulty Food Storage Systems
In India an important cause of concern in the agricultural sector is that of storage facility. Besides having less than required storage facilities, India also suffers due to inadequate facilities that are maintained in pathetic conditions. Non-rodent proof and non-moisture proof, traditional as well as modern storage facilities in India result in loss of substantial quantity of food grains every year. Improper means of disposal of damaged stock from the facilities is another cause of concern as it leads to damage of new fresh stock. Reports of agricultural produce being stored in the open have also been reported in number of areas. During the ongoing pandemic, in various cases it has been reported that there is an absence of storage facility and in some areas where facilities are available they have already been filled up due to high production compared to very low demand, thereby leading to damage of produce.
The Food Corporation of India reported that as of April 1-2020, 77 million tonnes of cereals have been kept in stock as buffer requirement as against the 21 million tonnes during the normal days. In Punjab, the state government decided to procure about 135 lakh tonnes of wheat to prevent loss, but the major issue faced was lack of space to store such huge amounts of produce. These cases represent the acute shortage of storage facilities in India. The wholesale buyers and other agents who buy agricultural produce from farmers have been reluctant to procure the produce due to lack of proper storage facility and less demand. This has in turn resulted in wastage of huge amounts of commodities as even the farmers do not have adequate means to store their produce.
Steps Taken
Since independence the government has taken number of steps to reform the agricultural sector in the form of land reforms, subsidies, food security act, public distribution system, minimum support price, establishment of Agricultural Produce Market Committee etc. These measures have helped improve India’s agricultural sector to a great extent. However, during the pandemic, the government has come across different issues that have grappled the sector and it took steps to address such issues. First, the government announced that agriculture and its related activities are exempt from lockdown restrictions and farming activities will continue after taking necessary precautions to prevent the spread of the virus.
Second, in order to prevent loss of produce, the government started procurement from the farmers and announced an additional 5kg of free grains to be provided to entitled people for 3 months. Government has also stocked up more than twice the normal quantity of cereals and also huge quantities of wheat and rice as buffer so as to meet the demands in case of any emergency in the future.
Third, besides central government schemes like Pradhan Mantri Garib Kalyan Yojana, regional governments and other departments have also initiated actions independently to aid and assist the famers. For example in Ooty, the horticulture department has started procuring cloth bags packed with variety of vegetables from farmers and then it distributes the bags in villages by means of trucks, the Kerala government has started to deliver meals with diversified diets at doorsteps of eligible households, the Rajasthan government has decided to provide tractors along with seed free kits and other equipments to small and marginal farmers, in Punjab, district collectors have been empowered to allow sharing of the few available labourers among different districts in rotation so as to address the issue of lack of labourers etc. Fourth, government has also announced assistance package of 20 lakh crore to be used to provide rations like rice, wheat etc along with cash transfers to 800 million people.
Besides these, in a recent meeting the Prime Minister has asked the officials to focus on new reforms in order to cut down the archaic rules and regulations, unite the domestic market (different states have different agricultural policies which causes inconvenience to the farmers during transactions), integrate the farm economy into global value chains etc. The PM also focussed on modifying the existing agricultural marketing procedure so as to remove restrictions and allow for free transactions among traders and cultivators. The use of transgenic in order to raise productivity and lower the costs was also on the list of matters that were to be addressed in order to strengthen the agricultural sector. The electronic national agricultural market will also be upgraded so that farmers can easily transact from their home while selling their produce. Age old land tenancy laws and issues that it causes were also focussed upon. The major focus was to strengthen the four pillars of food security- availability, access, stability and utilization and thereby improve the agricultural sector as a whole.
The COVID-19 pandemic has disrupted the entire economy of India. Besides having affected several other sectors it has landed heavy blows on the agricultural sector. Lack of storage facilities, lack of labourers, decreasing demands, restrictions on transportation etc and other issues have crippled the agricultural sector thereby affecting the farmers adversely. The government has been taking steps like providing cash assistance, providing food grains for next few months etc in order to support the agricultural sector but a lot more needs to be done in order to deal with the damage that the pandemic is causing. Government needs to ensure continuance of agricultural activities without any hurdles so that the danger of food and nutrition insecurity does not arise. Government also needs to release the food grain stock by expanding the base of public distribution system so that more space is freed to store the food grains. Government needs to ensure that farmers get a smooth environment to work in by taking up steps like conducting testing or farmers, ensuring that proper social distancing norms are being followed, labourers and other workers get access to transport and they are not harassed by police etc. Focus on e-commerce and ensuring that farmers have easy access to markets will help the farmers to deal with the issues arising due to the pandemic.
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