Indian agriculture provides employment opportunities to more than half of our population. It includes more than 12 crore smallholder and marginal farmers, most of them face annual risks related to low rainfall, price volatility, inflation, weak infrastructure, debts and so on. Covid-19 pandemic is an added challenge for this sector and its stakeholders, effecting majority of population due to its large outreach. On one hand rural sector is one of the neglected sectors and on the other hand, global tensions left us to concentrate more on local consumption and production, leaving no other option to look upon producers, local enterprises and rural economy.
We have heard “Necessity is Mother of Invention” since our childhood, and this pandemic proved it right for Indian agriculture sector too. We have seen various steps taken by government during this pandemic time, many of those were required since decades. Covid-19 surprised us all and provided stakeholders an opportunity to experiment, test, learn and implement innovative ideas. Pandemic struck when farmers were about to harvest their Rabi (winter) crop and prepare for Kharif, everyone thought of worst to happen, reasons were many; including global pandemic, subsequent lockdowns, global tensions, trust deficit and lack of experience in handling similar issues in past. In particular, lockdown brought challenges to Indian agriculture system; these are mainly related to shortage of labour, equipments, supply chains and fragmented demand.
Initially, people started storing extra grains and cereals in panic, then bumper production of cereals and oilseeds faced issues related to expensive labour and late arrival in markets, and then commodity loaded trucks never reached their destined locations. If we see in terms of supply chain challenges, shorter supply chains faced lesser challenges than long supply chains. Longer supply chains were mostly linked with medium and large enterprises, and hence affected agriculture related medium and large enterprises.
Pandemic left no choice for large enterprises (based on agriculture) than to innovate or optimally utilize available resources and infrastructure; like ITC used ‘E-Chaupal’ platform to procure agri-commodities, Government launched ‘Kisan Rath’ app to support farmers and transporters in locating each other, some agri start-ups delivered fresh vegetables and fruits, future group optimally utilized its already existing supply chain during this tough times. Reports show that farmers have received Rs. 75,000 crore by selling wheat, giving hope to boost local economy in rural areas.
Government took proactive and calculated decisions to handle the situation it never faced and minimised losses. On one hand it announced agriculture commodity as ‘Essential Commodity’ to maintain uninterrupted urban supply chain for milk, vegetables and fruits while on the other hand brought some changes in regulations ensuring smooth agribusiness operations throughout the country. Some of the steps taken are:
1. Allowing farmers to sell their produce to any trader throughout the country, helping them get best price for their produce.
2. Allowing farmers and other stakeholders to get into futures agreement for their far, produce.
3. Removed stock limits for farmers and traders on cereals, pulses, oilseeds, onions and potatoes to encourage infrastructure-related investments in agriculture.
We all know that Covid-19 crisis is temporary and problems in Indian agriculture ecosystem are not new, but this pandemic has reinstated the need of focussed policy on rural development with agriculture and rural population at its core. In long term, this pandemic will definitely going to be seen as turning point for positive changes in Indian agriculture space, including strong supply chains and establishment of agri-enterprises in rural and semi-urban areas.
In my view, the government should focus on following points to make agriculture more resilient and shockproof.
a) Establishing more agri-entrepreneurs and support local value addition
b) Investments in agri-infrastructure including storage, logistics, transport, etc.
c) Utilize Information Technology in agriculture to reach unreached and get hold of real time data.
d) Shortening supply chains to make it useful for farmers as well as medium and large enterprises.
e) Strengthening community based enterprises like producer groups, farmer producer companies, federation etc. to utilise larger base.
f) Create space for innovation in agriculture sector, whether it is farm practice or IT based or something related to logistics.
Let me sum up by saying that Covid-19 gave all of us an opportunity to innovate and test our ideas in a real-life social lab, where we can pilot, test and incubate big ideas to expand and become scalable model. Business environment need to see this time of redesigning and restructuring. Ideas may fail, but we should learn from these failures, something or the other will work and that will help sector to grow.