Effects of Covid-19 on Agriculture and Allied Sectors

The ongoing coronavirus pandemic is a public health emergency with grave implications for the population of the world. The coronavirus pandemic may likely have an extensive and long-term influence on the agriculture industry.The effects of Covid-19 on agriculture are both direct and indirect and can be summed up as follows:

1.India needs about 250 lakh quintals of seeds for the kharif season. The preparation of seeds happens between March and May. It begins from the farmers’ fields, where pollination etc are monitored by teams, and after harvest, drying and selection, the seeds are sent to processing plants. From there they are sent to labs for testing and, finally, are packaged for supply to the farmers.Despite exemption orders, the seed and allied sectors are experiencing harassment and in some cases violence at the local levels. Seed hubs and production facilities are under pressure to shut and labourers and village level henchmen are using this opportunity to make unreasonable demands.

2.In the fisheries and aquaculture sector, the implications can vary and be quite complex. For wild-capture fisheries, the inability of fishing vessels to operate (due to limited or collapse of market as well as sanitary measures difficult to abide to on board of a vessel) can generate a domino effect throughout the value chains in terms of supply of products, in general, and the availability of specific species. In addition, for wild-capture fisheries and aquaculture, problems in logistics associated with restriction in transportation, border closures, and the reduced demand in restaurants and hotels can generate significant market changes – affecting prices.

3.We are already seeing challenges in terms of the logistics involving the movement of food (not being able to move food from point A to point B), and the pandemic’s impact on livestock sector due to reduced access to animal feed and slaughterhouses’ diminished capacity and diminished demand.

4.Punjab can see around three lakh acres more under the cotton crop this kharif (summer) season against the previous year as farmers could shift from paddy (rice) on account of possible labour shortage in the State.In Punjab and Haryana, Bt cotton is sown in over 95% of the total area, the rest 5% cotton is usually the indigenous (desi) cotton varieties. Cotton is usually planted from mid April to till late May in most parts of the two States. Paddy is a labour intensive crop and if migrant labour doesn’t return in the coming months then surely many farmers, where sowing cotton is a viable option will go for it.

Also, State government’s push for crop diversification would be another factor that could aid the acreage under cotton.Farmers can sow more cotton this season than the last year. There’s currently a shortage of labour and if it continues, there’s a good chance that farmers will prefer sowing cotton instead of paddy, wherever it’s possible. Labour from Bihar and Uttar Pradesh have an expertise in planting paddy but with many of them back to their native places there will be some difficulty.

5. The non-availability of migrant labor is interrupting some harvesting activities, particularly in northwest India where wheat and pulses are being harvested(Rabi Crop). There are disruptions in supply chains because of transportation problems and other issues.

6.Prices have declined for wheat, vegetables, and other crops, yet consumers are often paying more. Media reports show that the closure of hotels, restaurants, sweet shops, and tea shops during the lockdown is already depressing milk sales.

7.Meanwhile, poultry farmers have been badly hit due to misinformation, particularly on social media, that chicken are the carriers of COVID-19

Support Measures by Government:(Agriculture and Covid-19)

1.Immediately after the nation-wide lockdown was announced, the Indian Finance Minister declared an INR 1.7 trillion package, mostly to protect the vulnerable sections (including farmers) from any adverse impacts of the Corona pandemic. The announcement, among a slew of benefits, contained advance release of INR 2000 to bank accounts of farmers as income support under PM-KISAN scheme.

2.The Government also raised the wage rate for workers engaged under the NREGS, world’s largest wage guarantee scheme. Under the special scheme to take care of the vulnerable population, Pradhan Mantri Garib Kalyan Yojana (Prime Minister’s scheme for welfare of the poor), has been announced. Additional grain allotments to registered beneficiaries were also announced for the next three months. Cash and food assistance to persons engaged in the informal sector, mostly migrant laborers, have also been announced for which a separate PM-CARES (Prime Minister Citizen Assistance and Relief in Emergency Situations) fund has been created.

3.The government also hiked the minimum support price (MSP) of paddy marginally by Rs 53 per quintal to Rs 1,868 per quintal for the 2020-21 crop year, while the rates for oilseeds, pulses and cereals were also raised.

4.Based on the recommendation of the Commission for Agricultural Costs and Prices (CACP), the cabinet has approved MSP of 14 crops. Paddy (common) MSP has been increased to Rs 1,868 per quintal for this year.

The government said the support price of cotton (medium staple) has been increased by Rs 260 per quintal to Rs 5,515 per quintal for 2020-21 from Rs 5,255 per quintal last year.

The support price of cotton (long staple) has been increased to Rs 5,825 per quintal from Rs 5,550 per quintal in the said period

5.The Indian Council of Agricultural Research (ICAR) has issued state-wise guidelines for farmers to be followed during the lockdown period. The advisory mentions specific practices during harvest and threshing of various rabi (winter sown) crops as well as post-harvest, storage and marketing of the farm produce.

6.The Reserve Bank of India (RBI) has also announced specific measures that address the “burden of debt servicing” due to COVID19 pandemic. Agricultural term and crop loans have been granted a moratorium of three months (till May 31) by banking institutions with 3 percent concession on the interest rate of crop loans up to INR 300,000 for borrowers with good repayment behavior.

What can be done in the future?

1.To sustain the demand for agricultural commodities, investments in key logistics must be enhanced. Moreover, e-commerce and delivery companies and start-ups need to be encouraged with suitable policies and incentives.

2.The small and medium enterprises, running with raw materials from the agriculture and allied sector or otherwise, also need special attention so that the rural economy doesn’t collapse.

3.To obviate the immediate concerns of scarcity of farm labor, policies must facilitate easy availability of machinery through state entities, Farmer Producer Organizations (FPOs) or custom hiring centers (CHCs) with suitable incentives.

4.It is also suggested to explore leveraging NREGS funds to pay part of the farm labor (with farmers paying the balance wage amount) to lessen the monetary burden on the farmer, while ensuring wage employment to the landless laborers and workers.

5.To answer queries relating to the announced measures of Government and addressing grievances of farmers, besides providing advisories on farm operations; availability of agri-inputs, dedicated toll-free helplines/call centers (in local/vernacular languages) must be established by the Government.

6.Agriculture in India is a State subject, and as has been observed in past years, policies and programs vary from one State to the other.  As the kharif (rainy/wet) season is fast approaching, institutional lending of crop loans should be expanded and facilitated for smooth (and sufficient) flow of credit to borrowing farmers. Agri-inputs – seeds, fertilizers, agro-chemicals, etc. – have to be pre-positioned for easy availability. Private sector must play a significant role with necessary policy support to limit covid-19 effects on agriculture.

7.Relaxation of the norms by Agricultural Produce Market Committees (APMCs) allowing farmers to sell their produce beyond the designated mandis will certainly ease the burdens of farmers. State Governments must gear up their machineries for smooth procurement operations of farmers’ marketable surpluses at MSP (minimum support price) or through other price support schemes to reduce covid-19 effects on agriculture.

8.There have been global concerns, rather speculations, on restriction of exports of agricultural commodities by a few global players. India, being trade-surplus on commodities like rice, meat, milk products, tea, honey, horticultural products, etc. may seize the opportunities by exporting such products with a stable agri-exports policy to help agriculture sector in times of Covid-19.

9.Many climate models predict a favorable monsoon in the 2020 season (the India Meteorological Department has also since officially announced) as the El-Nino weather phenomenon, that disrupts rainfall in India, is not evident. This is indeed a good news in the COVID scenario, assuming agriculture can practice largely unscathed.


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