Farmers at risk of losing their harvest due to lockdown

But there are ways in which the government can help farmers cope with the coronavirus-induced lockdown

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BusinessLine Photograph for story on farmers

When India went into a rigorous nationwide lockdown in late March, in response to the coronavirus epidemic that was spreading around the world, it was hugely disruptive for many communities. One of those that was particularly affected was the community of farmers. Given that 50 per cent of India’s population of 1.3 billion depends on agriculture as a source of livelihood, this had serious consequences for the income stability of over 600 million people. And the lockdown was enforced just at the time that the farmers were ready to take their rabi (winter) crop, harvested in early spring, to the mandis (agricultural marketplace). BusinessLine’s Senior Deputy Editor Rajalakshmi Nirmal spoke to farmers – who were facing the prospect of seeing their harvest going to waste – and to farmers’ collective organisations and their representatives to offer some suggestions to enable the farmers to get their produce to the market in time. The Union government responded with alacrity to the published report, and put in place a mechanism to ensure that while safety was not compromised in a pandemic situation, the farmers’ livelihoods could be produced. In terms of the number of farmers (literally in the millions) who gained from the remedial measures, this is arguably one of BusinessLine’s most impactful articles.

All across India, the springtime harvest of several rabi (winter) crops has started, and farmers are sitting on truckloads of grains and pulses. But with a nationwide lockdown in place to control the spread of the coronavirus, mandis (where farmers sell their harvest) have been closed. Initially, most States (or provinces) announced that the mandis would open from April 1, but it now appears that they will not be opened before April 14. This puts the crop harvest at risk of decaying – or, alternatively, of seeing small farmers being forced to resort to distress sale of their produce to exploitative traders.

The effect had already begun to be felt last week, when the markets were open. Farmers at mandis in Agar, in Madhya Pradesh State (in central India), were able to sell their agricultural produce only at prices that were sharply lower than the minimum support price (MSP) set by the government as a price threshold to support farmers.

If farmers are to secure a reasonable remuneration for their agricultural produce without compromising their safety, the government will need to take some measures to enable mandis to open up, with restrictions if necessary.

Here are a few action points that the Central and the State governments can consider.

SUBHEADING: Restricted time for mandis

The government can allow mandis to open during the lockdown, but with restricted timings. A time schedule can be announced for different villages, says Kavitha Kuruganti, National Convenor of the Alliance for Sustainable and Holistic Agriculture. This can help avoid crowding at mandis.

BusinessLine contacted procurement agencies to explore the feasibility of such a graded opening: it turns out that this is eminently feasible. Mandis have the phone numbers of farmers, who can be informed through SMS.

In the same way that a list of “essential services” have been excluded from the lockdown, operations across the agri-value chain too should be permitted so that consumers do not face a short supply. Trucks carrying agricultural commodities should be allowed to ply and for warehouses to be allowed to function.

SUBHEADING: Harness the e-marketplace

Prime Minister Narendra Modi had launched a flagship scheme— the electronic National Agriculture Market (eNAM) – which established an e-marketplace. It is time to leverage its possibilities to the fullest.

Up until now, only traders (that is, market intermediaries) could buy on the platform; it is perhaps the optimal time to allow farmers and farmer producer organisations (FPOs, or farmers’ collectives) to sell from the farm gate. Farmers may be permitted to upload pictures of the commodity onto the eNAM application; buyers can then get a measure of the quality of the grains/pulses.

Once the deal is formalised, traders can be encouraged to make part-payment to the farmer and take delivery whenever the regular transport systems start functioning and State borders are opened.

Mandi boards can be authorised to oversee the smooth execution of the deal between traders and farmers. As of now, 585 mandis across 16 States and two Union Territories (that is, Centrally administered territories) are on the eNAM platform; about 16 million farmers and 12.6 million traders are registered.

SUBHEADING: Encourage hedging via futures

FPOs can be incentivised to use hedging tools on futures platform in order to avoid losses from a sharp fall in prices. These derivative tools allow farmers to sell at pre-determined price for the price of a small fee. It effectively protects the downside risk for farmers.

SUBHEADING: Supporting FPOs

There are about 5,000 farmer producer organizations (FPOs) registered across the country. These institutions can be used to aggregate the harvest of farmers, which could then be procured by the

Central/State procurement agencies, suggests Yogesh Kumar Dwivedi, CEO, Madhya Bharat Consortium of Farmers Producer Company.

More than 100 FPOs under the consortium that he heads are willing to take tomatoes and peas door to door to consumers, adds Dwivedi. However, FPOs are also looking for a bit of relief in loan repayments, given the extraordinary situation they are facing.

World News Day 2020

Indian Printer and Publisher is one of the publications supporting World News Day and we will be publishing shared stories from around the world with an emphasis on stories from the Indian newsrooms such as The Hindu Business Line, The Quint, and The Indian Express that have made their stories available, as well as a couple of our own stories.

Our own stories concerning the education, publishing and print industries that we are putting forward to share in the celebration of World News Day are:
Indian government Stop Print! by Shardul Sharma 
Indian media fatalities to virus exceed those to violence by Nava Thakuria Indian print media to lose Rs 18,000 crore in FY 20-21 by Naresh Khanna The end of the great international trade shows? by Ron Augustin