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Supply chain disruptions led to only 50-75% market arrivals of major produce across country

In the case of some commodities, price realisations also fell alongside the dip in market arrivals, indicating more distress for the producers of these items, such as poultry and milk, vegetables and some fruits.

Written by Kavitha Iyer | Mumbai | Published: May 28, 2020 11:25:03 pm
nirmala sitharaman, relief fund for agriculture, Modi government budget, Indian farmers, fisheries, coronavirus, covid-19 economy india According to the paper, the numbers belie government claims about the operations of agricultural markets during the lockdown.

Arrivals of major agricultural commodities in markets across the country during the lockdown period were as low as 50 to 75 per cent of arrivals during the corresponding period last year, indicating the difficulties faced by agriculturists on account of severe disruption of supply chains.

A paper to be published in the upcoming issue of Review of Agrarian Studies — a peer-reviewed journal of the Foundation for Agrarian Studies — shows that the arrivals were not even 50 per cent of the total arrivals for wheat, barley, gram, potato, onion, peas and mango in 2019. While they were between 50 and 75 per cent of the arrivals last year in the case of pigeon pea, lentil, cabbage, cauliflower, lady’s finger and banana. The paper is authored by R Ramakumar, NABARD chair professor, School of Development Studies, Tata Institute of Social Sciences, Mumbai.

Using data from the commodities database of the Centre for Monitoring Indian Economy (CMIE), a compilation of data from 3,289 markets across the country, the paper analyses market arrivals of 16 commodities between March 15 and May 15, and compares these with market arrivals during the same two-month period in 2019. The 16 commodities represent all crop groups including cereals, pulses, fruits and vegetables.

CMIE, a leading business information company, produces economic and business databases and develops specialised analytical tools to deliver these to its customers for decision making and for research.

With the exception of maize, market arrivals for all commodities were lower in 2020 than in 2019. And only two commodities, paddy and maize, saw at least 75 per cent of market arrivals as compared to 2019. In the case of wheat, an important rabi crop, market arrivals were only 47 per cent as compared to 2019.

In the case of barley and gram, arrivals were 32.6 per cent and 43.5 per cent of the corresponding period in the previous year. Arrivals of pigeon pea (arhar) were 63.6 per cent while arrivals of lentil (masoor) were 56.7 per cent in comparison with 2019.

Arrivals of perishable commodities were significantly lower, too. As compared to 2019, tomato saw 74.5 per cent arrivals, potato saw 49 per cent, while onion and peas were 32.5 per cent and 39.1 per cent, respectively. In addition, wheat, barley, gram, lentil, peas and mango also witnessed a long stretch of days in March when arrivals were negligible.

According to the paper, the numbers belie government claims about the operations of agricultural markets during the lockdown. The sizeably lower arrivals point to difficulties faced by farmers due to breakdowns in government procurement systems, lower private trade in rural areas, difficulties in transporting goods to market yards, mandi-specific requirements such as an appointment slip, etc. Farmers who ran into these hurdles at markets were forced to take their produce back or sell to middlemen at lower prices.

While farmers did indeed sell produce outside this network of agricultural markets during the lockdown period, the probability that such sales were at prices lower than market rates is high, prof R Ramakumar told The Indian Express. “Some of these sales outside the markets may have been distress sales, some perishables would have suffered spoilage or would have been dumped. A few states, such as Punjab, opened more numbers of procurement centers, ad hoc institutions to increase procurements, which would not reflect in this data of market arrivals. But these are unlikely to alter the numbers significantly,” he said.

In the case of some commodities, price realisations also fell alongside the dip in market arrivals, indicating more distress for the producers of these items, such as poultry and milk, vegetables and some fruits. “These areas would have suffered significant losses, though the extent of distress these farmers have faced cannot be gauged by the supply or demand shocks alone, more primary studies will be required to assess the level of distress,” he said.

These disruptions offer a lesson on how supply chains must be structured and secured, Ramakumar added. “I am not sure if the recent steps taken by the government, including the amendments to states’ APMC Acts, are actually going to resolve the problem. We must look at ways in which the APMC system can be reformed and strengthened, we must identify problems such as the predominance of commission agents in some markets. The extent of disruption caused by the closing down of some APMC markets such as Mumbai and Pune show that they have a significant role to play, so reform is actually required within the APMC regime,” he said.

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