“Better remuneration will encourage farmers to increase vegetable production”
Dr. O. P. Singh, Assistant Professor & Coordinator, Agri-business Management, Banaras Hindu University, observes that the demand for vegetables in urban areas is low due to fear of Corona virus and the consequent postponement of social activities. He opines that the role of agro-based processing industry is important to set up vegetables-based processing units in rural areas so that farmers can get remunerative prices of their produce.
TPCI: What kind of challenges does the COVID-19 pandemic present to Indian agriculture? What role can agri-tech companies in the country play in addressing these challenges?
Dr. O. P. Singh (OS): The COVID-19 led country-wide lockdown has made a negative impact on the farmers’ incomes, because most of the agricultural produce is perishable/semi-perishable in nature and there is a lack of processing industries, cold storage/cold chain and other infrastructure facilities in rural areas.
In India, nearly 86% farmers are classified as marginal and small farmers having 2 hectares or less than two hectares of land. These farmers are engaged in subsistence farming. Mostly, they grown non-perishable commodities like paddy, wheat, jowar, bajra, pulses and oilseeds. Secondly, the marketable surplus is very low. In this situation, post-harvest losses are a very small fraction of their produce. The marketing of their produce in urban markets is uneconomical because transportation and other costs are very high per unit produce. Generally, they sell their produce in the village itself.
Farmers from peri-urban villages are marginal and small farmers and their production is largely administered by the urban peoples’ demand. The important and highly demanded commodities in the urban markets are milk and vegetables, besides food-grains. Farmers of peri-urban villages are trying to produce milk and vegetables as much as possible to cater to the demand of urban people. Mostly, farmers sell their produce in urban markets either the same day or the next day of harvesting. Due to small quantity of marketable surplus, they use their own vehicles (motorcycle, auto rickshaw etc.) to transport vegetables and milk in nearby urban markets.
During the COVID-19 pandemic led country-wide lockdown/movement restrictions, farmers are not able to sell their vegetables in the urban markets. Even if they able to reach urban markets, the demand for vegetables in urban areas is low due to fear of the Coronavirus. Secondly, the postponement of marriage and other social activities, conferences in colleges/university, offices and closed restaurants, hotels etc. also reduces the demand for vegetables in the urban market. Vegetable farmers are forced to either not harvest their vegetables or to feed them to animals because market price of vegetables is so low that they cannot cover even cost of harvesting! But consumers of urban areas are getting vegetables at higher rates. The difference between farmers’ selling price and consumer paid price goes to the vegetable vendors.
In case of milk which is a highly perishable commodity, due to closure of sweet shops and movement restrictions, milk producers are selling their milk at lower rates. If they want to convert milk into milk products i.e. paneer, curd, Khoya etc, again the demand for these products is limited and farmers can’t keep them for a long time due to non-availability of cold chain/storage. Under such situations, another option with milk producers is that they can convert milk into butter oil. But selling of butter oil is also a difficult task because of quality issues – quantity and processing cost is very high.
Looking at the situation, there is an urgency to create infrastructure facilities in the rural areas like cold storage/cold chain, processing units for milk, vegetables etc. to reduce the post-harvest losses. Small processing units need to installed in the rural areas. With the benefit of such infrastructure, farmers/producers can easily approach processing units at the time of lockdown/movement restrictions. They can get remunerative prices for their produce and minimise post-harvest losses.
TPCI: COVID-19 has instilled a general distrust in consumers that the agricultural products he is buying might have changed many hands and can therefore be contaminated. Fears that crop seeds might have been contaminated by the virus are already doing rounds. How can these fears be dispelled from the farm to fork value chain?
OS: COVID-19 pandemic created fear among the domestic consumers, especially for vegetables and milk. The movement of agricultural produce from farmers to the ultimate consumer has a long chain of middlemen. If any person in the supply chain is affected by the Coronavirus, it may spread to a larger population. To cope-up with this situation, following steps may be considered:
[a] Some agency needs to come forward for the certification that these vegetables/product are free from the harmful viruses;
[b] Scientists/engineers need to develop low cost effective instrument/machine that can disinfect/kill the harmful viruses/bacteria; and
[c] Some agro-based companies must come forward and collect produce from the farmers, process and pack it while ensuring that “this product is free from harmful viruses and bacteria”. This will create trust among the consumers and lead to increase in demand for agricultural produce.
TPCI: Do you expect importing countries to bring in additional certification requirements to cater to COVID-19? Can they also take the form of non-tariff barriers? If so, how should Indian agri-exporters be prepared?
OS: As we discussed, the fear of Coronavirus is high among domestic consumers. Agri-exporters may face a similar situation. Even before the Coronavirus pandemic, agricultural produce consignments were returned on the basis of sanitary and phytosanitary (SPS) measures to protect humans, animals and plants from disease, pests or contaminants. The importing country may impose non-tariff barriers on the basis of Coronavirus contamination. To cope-up with the situation, we should incorporate Certification of Coronavirus contamination into the sanitary and phytosanitary certification. This will give a boost to the export of agricultural produce.
TPCI: Will the drop in purchasing power of consumers lead to shifts in consumption patterns of people and dietary changes (eg shift from brown rice/basmati to inferior rice quality)? Or will the growing consciousness to stay fit and build immunity boost the demand for relatively expensive agricultural goods like organic food?
OS: Due to decline in the purchasing power of the lower income group as a result of the COVID-19 led lockdown, the consumption pattern will certainly change towards core cereals. But they are also going to consume some quantity of vegetables (from potatoes and onions to green vegetables).
Products like Basmati Rice and organic food are consumed by middle- and upper-income families. The income of these classes is not much affected due to COVID-19 led lockdown. In case of middle-class family, the frequency of consuming basmati rice/brown rice and organic food may be reduced, because of the reduction in relative income of the middle-class family. In case of upper income group families, whose incomes are more or less stable and they are more health conscious, they may try to continue consuming Basmati/brown rice and other organic food at the same pace or they may try to consume more organic food to improve their immunity.
TPCI: COVID-19 has highlighted the urgency for making e-NAMs a reality. But are Indian farmers ready for it? What are the likely challenges that this model could face?
OS: The electronic National Agriculture Market (e-NAM) is the new marketing system implemented by the central government on July 1, 2015. The main objectives of e-NAM are:
[a] To provide remunerative prices to the producers (farmers) by bringing buyers throughout the country on one platform;
[b] Providing good quality agricultural products to traders; and
[c] Stabilizing the prices of farm produce for consumers.
As we know, about 87% farmers belong to the categories of marginal and small farmers having very small quantity of marketable surplus. These farmers (marginal and small) are not going to visit agricultural mandis/markets for selling their produce, because it is not cost effective. Only medium and large farmers can sell their produce in the national agricultural market because they have larger quantity of marketable surplus and can afford transportation and other costs.
Farmers are also illiterate on the front of computer/internet knowledge. Even those farmers having some digital knowledge and access to facility of computer/internet are not using it to assess the market information.
In most of the cases, farmers are trying to sell their produce as soon as possible and getting the price of produce for purchasing inputs for second crop, and repaying the debt which is taken from non-institutional/institutional sources. Farmers don’t want to wait for a longer period of time to sell their produce and receive prices of their produce. Under the National Agriculture Market system, it is not certain that farmer can sell their produce and receive money on same day. This is another problem faced by the farmers.
TPCI: How will the flight of labour impact sowing of kharif crops and supply of these commodities in the near future? How can this problem be fixed?
OS: One of the largest negative consequences of COVID-19 pandemic is labour migration. The larger chunk of these labours is working in factories, urban labour, pulling rickshaws, driving auto rickshaws, etc. located in Mumbai, Surat, Haryana, Punjab etc. Only 5-10% labours are working in the agricultural fields, especially in Punjab, Haryana and some parts of Maharashtra. So, by moving out labour from these areas, farmers can manage their kharif season sowing using mechanical power. In case of paddy, they can use paddy transplanters; rest of the crop sowing can be managed easily by mechanical power. When the situation is normalised, these labourers will be going back to the places where they were working before the Coronavirus pandemic.
One of the major changes that is going to take place in the peri-urban villages is that vegetable growers may reduce the area under vegetable cultivation and reallocate it under non-perishable/less perishable commodities like foodgrains, oilseeds, pulses, potato and onion etc. This will affect the local supply, resulting in increase in vegetable prices in the coming season. This will negatively affect consumers, because they have to purchase vegetables at higher rates. But once farmers have received higher prices of their produce in one season, they may change their cropping pattern towards vegetable cultivation in the next season.
Dr. O P Singh is alumnus of University of Allahabad and BHU, Varanasi. Before joining BHU in 2006, he worked with IRMA, INREM Foundation and IWMI, Sri Lanka. He has more than 175 publications to his credit.