Covid-19: Managing food security and agri businesses

Covid-19: Managing food security and agri businesses

As there is a challenging situation created across the whole world due to the COVID-19 pandemic, the global economy is facing a huge blow owing to the subsequent prolonged shutdown of businesses. Developed economies like the United States of America, Russia, Spain, Italy, etc. are facing the brunt of Coronavirus. The pandemic is having a devastating impact on the health of people and is causing loss of lives in countries all over the world.

Amid this biological holocaust, countries across the world have to take suitable measures related to healthcare, economic issues and the essential commodities required by the common people. The global market is going through panic and facing problems in the supply chain across all sectors. International organisations are warning that low income and trade-dependent countries are likely to face the worst effect, whereas wealthy countries might as well be hit by the price spikes and panic buying.

Just like all other sectors, agriculture and food sector are also hit by the continuous shutdown, with the ongoing health crisis rippling through the food supply chain.

World Food Programme earlier warned that COVID-19 is turning from a global health crisis into a global economic crisis and it can even further develop into a global food security problem. This is majorly due to the logistical issues and supply chain disruptions due to the lockdown situation.

It is noted that there is a sufficient amount of food grains available; also there has been a decent amount of harvest during the season, which can fulfil the needs of people across the world. There is no problem of scarcity of food as such. The only problem that is faced by the countries is the trade restrictions and supply chain disruptions, due to which, the food items are not made available to the end consumer. A challenge that is posed due to the lockdown is how to move the food items from the production area to the final consumers, both, within the countries and also to the importing countries. This has induced the price escalations in case of the food market as well.

Basically food commodities are of two types – staple food commodities and high-value food
commodities. Staple food commodities include wheat, maize, rice, cereals, corns, etc. These crops are labour extensive, meaning, very few labourers are required to operate. Thus, a lesser number of human resource is engaged in these activities and when social distancing is maintained, it will minimise the COVID-19 risk among the agriculture workers. These food items can be conveniently moved from one place to another irrespective of time duration. Whereas, the high-value food commodities, which include fruits, vegetables, meat, etc. are affected in several dimensions throughout their value chain. Firstly, these commodities are labour intensive, meaning, a very large number of labourers is required to be engaged, therefore posing a potential threat of health issues in the workforce. Secondly, these commodities are very sensitive to logistical issues.

These are the areas on which the countries need to take necessary steps, resolving the logistics issues in the value chain, along with the health issues of the workers.

Countries need to facilitate hassle-free inter-regional mobility of food products by taking care of logistical issues, keeping a priority on health and also setting the food value chain as a priority. In India, the government, as well as the corporate sector, is playing a vital role in curbing down the disruptions and problems in the food value chain. There are many agri-business start-ups in India that offer technology solutions to keep food supply chain rolling in the backdrop of COVID-19 crises. Due to this, farmers are facilitated in aggregation and distribution of agricultural produce from the production area to consumption centres.

Agri-startups in India is growing at 25% year-on-year basis, which can create a supportive ecosystem for the supply chain of food materials during and post-lockdown period, according to a study by industry body FICCI. There are about 450 active agricultural start-ups in India, working to address different problems at hand. These start-ups offer different solutions to problems faced by farmers in agricultural activities. For example, start-ups like NinjaCart, WayCool, MeraKisan, Kamatar, etc. are engaged in connecting farmers with buyers which include processors, retailers, e-commerce, cloud kitchens and direct to consumers as well. Some of the start-ups are working on quality assaying of farm produce, to solve the problems of standardization. These start-ups include Intellolabs, Zense, Raavtech, Occipital, etc. Whereas other start-ups like Origo, Agri Bazar, Star Agri, Ecozen, etc., are giving near the farm, modular and affordable storage and processing solutions, which can give farmers an option to sell the produce at the right time and at the right price, rather than immediate or distressed liquidation of agricultural commodities after harvest. For smooth operations in agricultural activities, these start-ups offer solutions to optimize the use of agricultural inputs and enable delivery to farmers. These start-ups actually act as the support factors in the food value chain.

The government is also playing a vital role in the agricultural sector by putting forward its appropriate policy framework and allocating financial package to the sector. Recently, the government of India announced 20 lakh crore package for revival of the economic health, out of which 1.50 lakh crore is allocated to the agricultural sector. This will focus on infrastructure and capacity building in agriculture and related activities. Government is supporting farmers through minimum support price (MSP) purchase of Rs 73,300 crore during the two months of lockdown. The government also decided to overhaul the Essential
Commodities Act, 1955, moving cereals, edible oil, pulses, onion, and potato out of its purview, to deregulate the trade of these commodities. The farmers will now be able to sell their agricultural produce to any buyer in the country. There will be no stock limits imposed
on processors, value chain entities and exporters, except only in unavoidable circumstances. This will enable these different participating entities to operate more conveniently. Farmers will have an option to sell their farm produce directly to different entities without bringing the produce to mandis. This will also give an opportunity to farmers for better price realisation by attracting investments and making agriculture sector competitive. The government will provide financial assistance to farm aggregators, farmer producer organizations (FPOs) and primary cooperative societies to strengthen cold chain, storage centres and other agri-related start-ups. Such different measures will help in mobilising the food value chain of agricultural produce, along with the revival of the economic health of the country. This will also curb the food security issue for people of every section of the country.


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Covid-19: Managing food security and agri businesses