Breakdown of Agricultural Supply Chains during the COVID-19 Lockdown

Vikas Rawal and Ankur Verma
The sudden imposition of a national
lockdown to contain the spread of COVID-19 has impacted the agricultural sector
in many different ways. Of these, the disruption in the functioning of the
agricultural markets has been one of the most significant.

The lockdown was announced with little
planning. Despite the fact that the rabi crops were being harvested or were
about to be harvested in many parts of the country, the central government made
no advance preparations to ensure that agricultural supply chains continued to
function. It was only on March 27th, three days after the national lockdown and
5 days after the first round of restrictions (starting with janta curfew) that the
government announced exemption of agricultural mandis from the restrictions of
the lockdown.

However, despite the exemptions from the
lockdown restrictions, absence of complementary measures to ensure the
availability of labour, facilitate safe transportation of produce from villages
to the mandis and taking measures to ensure safety of those involved in
transportation and marketing continued to thwart normalisation of functioning
of the mandis during the first phase of the COVID-19 lockdown.

This article, based on a recent study we
conducted, presents quantitative evidence from 1331 mandis across the country
to show that a large number of agricultural markets remained non-operational
during the first phase of the lockdown, and in those markets that were
operational, arrivals of key agricultural commodities fell very sharply. Our report,
available at https://coronapolicyimpact.org, is the first
quantitative assessment of the functioning of agricultural markets during the
COVID-19 lockdown. The report is based on data on daily arrivals and prices
from Agmarknet (http://www.agmarknet.gov.in/) for seven key rabi
crops: wheat, chana, mustard, potato, onion, tomato and cauliflower.

How many mandis were functional during the lockdown?
Figure 1 shows that a large number of
mandis remained non-operational throughout the three-week period of the first
phase of the lockdown. For example, wheat was sold in only 264 mandis during
the period of lockdown in 2020 while in the same 21-day period in 2019, wheat
was sold in 688 mandis. Chana was sold in only 174 mandis and mastard
was sold in only 152 mandis during the first phase of the lockdown while they
were sold in 445 and 497 mandis respectively during the same period in 2019.
The situation was somewhat better in case of perishable crops though not all
mandis where these crops were sold last year were functional during the period
of the lockdown. In comparison with last year, number of mandis buying potato
and onion fell by 70, number of mandis buying tomato fell by 48, and number of
mandis where cauliflower was traded fell by 25. Of all the States covered in
the data set, the problem of non-functional mandis was most severe in Madhya
Pradesh, where only 43 out of 259 mandis were functional during the lockdown.
Similarly, Only 57 out of 132 mandis in Rajasthan and only 34 out of 113 mandis
in Gujarat were functional during the lockdown.

 

Our data also show clearly that,
functioning under severe constraints, a large number of mandis limited their
operations to only perishable commodities and did not have the capacity for
marketing of grains. Of the 325 mandis where both grain and perishables were
marketed between March 25 and April 14, 2019, only perishables were marketed in
100 mandis during the period of the lockdown. On the other hand, of the 449
mandis in which only grain was marketed during this period in 2019, 326 were
non-functional during the period of the lockdown.

Arrivals of Crop Produce in Mandis
The data on arrivals show a sharp decline
in the amount of crop produce that was sold in the mandis (Figure 2). For
example, only 1.32 lakh tonnes of wheat was sold in the mandis during the
period of the lockdown. This was only about 6 per cent of the total amount of
wheat sold in the same 21-day period in 2019. Compared to the quantity sold in
2019, the arrivals in 2020 were also only 6 per cent for chana and 4 per
cent for mustard.

It is important to note that very low
arrivals of wheat during the period of the lockdown was not a result of delayed
harvest in northern India. Harvest in northern India was delayed last year as
well. In fact, as can be seen in Figure 2, the total arrivals of wheat between
March 25 and April 14 last year was only 48 per cent of the arrivals during the
same period in 2018. The low levels of wheat arrivals during the first phase of
the lockdown this year was because of non-functioning mandis across central
India where wheat is normally harvested before it is harvested in Punjab and
Haryana.

Given that a large number of mandis
shifted their focus to perishables, the situation in respect of these
commodities was a little better. However, even among these crops, the drop in
arrivals was very large for onions (70 per cent) and potato (59 per cent). The
shortfall was lowest (11 per cent) in case of cauliflower. However, it needs to
be pointed out that, in comparison with other crops considered in the study,
quantity of production and sales of cauliflower are small. Even in 2019, the
total arrivals of cauliflower during the 21-day period was only about 29
thousand tonnes.

Figure 2: Total arrivals of key food commodities in
mandis, March 25-April 14, 2017-2020
 

 

While the extent of decline in quantity
of arrivals was less in perishables than in grain, it must be noted that, even
with this level of decline in marketing, a considerable amount of perishables
would have remained unsold with farmers. Since these commodities are highly
perishable, inability to sell the produce for a prolonged period is likely to
have been resulted in a large part of the unsold crop getting damaged and thus
losses on account of this are likely to have been substantial.
To sum, our analysis strongly suggests
that, even though the agricultural markets were given exemptions from the
lockdown restrictions, the lockdown resulted in a very severe contraction in
the amount of crop produce that was sold in the mandis. The lack of prior
preparation to ensure that agriculture and food systems are not disrupted is
likely to have caused an immense distress to the peasantry for which the
central government is squarely responsibile.
—–
Vikas Rawal and Ankur Verma are
affiliated with the Centre for Economic Studies and Planning, JNU, New Delhi 
The detailed
report on which this article is based can be seen at https://coronapolicyimpact.org/2020/04/22/agricultural-supply-chains-during-the-covid-19-lockdown/