Will Covid in rural India spell disaster for agri?

The second wave of the Covid-19 pandemic is sweeping across rural India. Reports are coming in of people dying of its symptoms — fever and cough. The Ganga that flows through eastern Uttar Pradesh and Bihar was swollen with bodies. In Haryana’s Sonepat district, just to mention one instance, the local administration earlier this week declared 50 villages as hotspots after each habitat registered 10-15 cases of the disease. The situation in rural India is becoming more alarming even as the brutal surge is receding in locked-down metros such as Mumbai and New Delhi.Will this health crisis in rural India have an effect on the country’s farm production? What will be the impact on the export of agricultural and allied products, a segment that grew 24% in 2020-21 over the previous year, mainly on account of good monsoon and a surge in global commodity prices? The farm export growth was impressive against the backdrop of a drop of over 27% in leather exports, 10% in textiles and 7% in machinery, just to name a few, during the pandemic-hit fiscal.ET spoke to government officials, farm experts, weather forecasters and exporters to piece together this story. When the dots are connected, early indications suggest, India will see yet another robust fiscal for agricultural exports. The factors that will likely contribute to this scenario include a normal monsoon that has been forecast, steady global demand for Indian farm products, stocking of rice in Africa and the Middle East due to uncertainties associated with the pandemic and, last but not the least, the sheer luck that the second wave didn’t coincide with the season of rice transplantation that takes place mainly in July.Former Union agriculture secretary SK Pattanayak says India narrowly escaped the disastrous consequences of the second wave on farm production, particularly rice, the most critical item in exports. “Harvesting of rabi crops is already over. Kharif cultivation has yet to begin in most parts of India. We are lucky that the peak of the second wave of the pandemic fell in between. So, even if a significant portion of the rural population is affected by the wave, there should be normalcy by the time cultivation picks up steam,” he says.PADDY & PANDEMICIn FY2020-21, for example, rice alone comprised 44% of India’s total agri and allied products’ exports ($20 billion).During the year, India exported non-basmati rice worth $4.8 billion, a 137% rise over FY2019-20 even as the nation’s export of basmati varieties slipped by 8%. Non-basmati and basmati rice were India’s top two agricultural export items of the last fiscal, followed by buffalo meat ($3.17 billion), miscellaneous processed items ($0.86 billion) and fresh fruits ($0.77 billion), according to data available with the Directorate General of Commercial Intelligence and Statistics (DGCIS), an arm of the Union Ministry of Commerce and Industry. 82864141A recent analysis of exports of farm products for FY 2020-21, prepared by APEDA (Agricultural and Processed Food Products Export Development Authority), which ET reviewed, has forecast “a further growth in export of at least 10-15% in the year 2021-22”. The document has particularly listed five categories — bovine meat, dairy products, nutri cereals, processed food (conventional, organic and GI) products, and fresh fruits and vegetables as potential growth areas for the current fiscal.APEDA’s chairman, M Angamuthu, sees early signs of growth in demand for India’s non-basmati rice, wheat, other cereals and vegetables from several geographies such as South Asia, mainly Bangladesh, Southeast Asia, Africa and the Middle East. “After the Covid-19 outbreak, the demand for India’s organic and herbal products such as turmeric, plant extracts, moringa (drumstick) powder and oil has jumped,” he says, adding that there has been a huge demand for fresh turmeric in the Middle East, Japan and Europe. “We will also tap the Iran market this time,” he says. “Last year, we were down because of issues regarding currency fluctuations. Many countries in Africa and the Middle East are still storing food grains. Also, there is no disruption in supply and logistics now and the situation arising out of container shortage is getting better.”Significantly, India’s agricultural exports to Bangladesh during the Covid-hit FY2020-21 was worth $1.38 billion, a 318% rise over the previous year, driven mainly by the sale of non-basmati rice, other cereals, wheat, fresh vegetables and fruits. As far as Iran is concerned, where the APEDA is pinning its hopes on scaling up exports, India’s total dispatch in FY2020-21 fell by a staggering 48%. A slump in demand for basmati rice, from $1,246 million in FY 2019-20 to just $590 million in FY 2020-21, caused the shortfall.“The Middle East alone consumes some 80% of India’s total export of basmati rice. A shift from basmati to cheaper non-basmati in some Gulf countries is a worrying trend. Another cause of concern for rice exporters is the escalation of the conflict (IsraelHamas),” says Vinod Kaul, executive director, All India Rice Exporters’ Association.Amid the second wave of the pandemic, as farm exporters and policymakers are building various scenarios, the role of Southwest monsoon, which is likely to hit the Kerala coast on May 31, can’t be underestimated. Barring some pockets in states such as Punjab and Haryana where irrigation infrastructure is above average, India’s agriculture is largely dependent on monsoon. And one bad monsoon year has the potential to not only drag down agri production but also adversely impact farm exports.Last month, the national weather forecaster, India Meteorological Department (IMD), predicted a normal monsoon for four months between June and September, adding that there is a 21% chance for the rainfall to be above normal. If IMD’s prediction turns out to be correct, it will be the third consecutive year of good monsoon, like in 1996-98. With the private weather forecasting agency, Skymet Weather, also predicting a normal monsoon, it’s safe to assume that Indian farmers will have a bumper crop this season.“According to our forecast issued last month, there will be normal monsoon except in parts of the East and the Northeast. We will issue a fresh forecast at the end of this month. Our forecast remains unaffected by the recent cyclone in the Arabian Sea,” says Dr Mrutyunjay Mohapatra, director general of meteorology, IMD, adding that if the cyclone had occurred towards the last week of May, and the direction of the movement remained the same, it would have contributed positively to the onset of monsoon. “But again, had the cyclone moved towards the Yemen and Oman coasts, it would have adversely affected the monsoon,” he says.The bottom line is: global demands for India’s farm products as well as monsoon scenarios for the current fiscal appear to be favourable for Indian farmers to produce more. This means, in the best-case scenario, there will be no shortage of supplies for exporters to ship products overseas. What is critical here is the magnitude of the pandemic in the hinterland as well as how speedily rural India passes the Covid peak.Speaking to ET over the phone, Tularam Dhiwar, a 46-year-old rice farmer from Chhattisgarh, narrates the ordeal that he and his fellow villagers had to suffer at Reewa, a village 28 km east of Raipur. Many in his village had cough and fever late last month; some landed up in a nearby dispensary for tests and treatment; and there were at least four deaths in the village, according to Dhiwar. “By the time I start cultivating next month, I hope the Covid problem will be largely over,” he says, adding that he usually engages a dozen labourers in his 15-acre farmland.BS Dhillon, vice - chancellor of Punjab Agricultural University, Ludhiana, has a similar forecast. “I feel the peak of the second wave of Covid-19 will be over by the time cultivation begins. Sowing of parimal (a non-basmati rice) has already started in Punjab, and the transplantation will begin from June 10,” he says, adding that the labour shortage in the state is not as bad as it was during last year’s nationwide lockdown.Farming has one advantage. Unlike a garment factory where labourers need to work closely and in an enclosed space for eight hours a day, cultivation takes place in the open and has breathers in between. For a rice cultivator like Dhiwar, there will be a month-long gap between sowing and the labour-intensive process of transplantation. He hopes the virus will retreat by then.

from Economic Times https://ift.tt/3bOHgPJ