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WHAT DOES THE CURRENT PANDEMIC MEAN FOR OUR FRAGILE FOOD CHAINS?

WHAT DOES THE CURRENT PANDEMIC MEAN FOR OUR FRAGILE FOOD CHAINS?

There are no famines yet. But I must warn you that if we don’t prepare and act now – to secure access, avoid funding shortfalls and disruptions to trade – we could be facing multiple famines of biblical proportions within a short few months.”  WFP Chief, David Beasley

In the aftermath of Covid-19, all sectors of the economy are facing a mammoth challenge staying afloat. Several disruptions and an economic slowdown have created operational challenges resulting in massive losses for sectors that are bearing the brunt of the crisis.

The agriculture sector, known to be the backbone of Indian economy (contributes about 17% to GDP and employs 60% of the population), has also been subject to many challenges owing to the pandemic. Both the crop and allied sectors have been impacted to a large extent.

While the markets are bearing economic losses, another aspect of this crisis is unfolding- food insecurity. At present, around the world, 821 million people go to bed hungry every night, chronically hungry. As per World Food Programme analysis, COVID-19 could push an additional 130 million people to the brink of starvation by the end of 2020. The United Nations World Food Programme has warned that an estimated 265 million people could face acute food insecurity by the end of 2020, up from 135 million people before the crisis, because of disruptions caused due to the crisis.

Below we explore the many channels through which the sector is facing the impacts of the crisis:

  • Impact on Production: March is the season of Rabi harvest in India, when crops like wheat, gram, lentil, mustard etc. are at harvestable stage, and the harvest activity has continued as before during the lockdown period and was completed. Global production levels for the three most widely consumed staples (rice, wheat and maize) are at or near all-time highsThe production in Kharif season, with the onset of monsoon, may however face challenges due to factors like labour shortage, supply chain disruptions, reduced prices etc.
  • Impact on Prices: Markets and mandis have been facing restrictions on timings, transporation, labour etc. which have led to increased price volatililty. the prices of certain cash crops —  an important source of rural income — have been depressed by the slowing of global demand.  In a study that compared production levels in March-May 2020 to Mar-May 2015, found that there has been a huge decline in market arrivals. Such supply shortages have further led to a fall in prices of agriculture commodities.

In India, for instance, prices of key staples, barring cereals, surged as much as 3 times during the lockdown period due to supply shocks.

  • Impact on Food Security: The crisis could have a grave impact on food security across nations. Countries and sections of society most vulnerable to the impacts are most at risk of facing food insecurity.

There have been funding cuts to humanitarian organizations addressing food crises, due to reallocation of resources to COVID-19 specific programs. The World Food Programme, that offers a lifeline to nearly 100 million people every day, estimates that nearly 3,00,000 people could starve to death every day over a 3-month period,if they are unable to reach them.

  • Impact on Supply Chains: There are several stakeholders in the food supply chain- farmers, vendors, wholesalers, and consumers. When one link in the chain is affected, multiple stakeholders feel the impact. Delays in delivery, workers absenteeism, supply shortages have been some of the problems caused due to supply chain disruptions.

Keeping supply chains functioning well is crucial to food security. A case in point- In the Bengal famine of 1943, there were 2 to 3 million deaths due to food supply disruptions—not a lack of food availability.

  • Impact on Demand: Since demand for food is inelastic, the impact on overall consumption has been limited.

However, among vulnerable sections of society whose consumption is directly dependent on their running income, demand has fallen on account of falling income. There has also been a steep reduction in demand for non-vegetarian products on account of fears that animals may be a potential source of the virus. Additionally, restaurants are a key market for many producers and restaurant closures have also led to a major reduction in demand.

  • Impact on Exports: India is the second largest beef exporter in the world, however due to fall in global demand for meat and animal products, exports have declined resulting in large economic losses.
  • Impact on Incomes: Small farmers and poor peasants have borne the brunt of the crisis due to loss of labour wages resulting from reduced sales. Farmers reliant on these wages for sustenance have had to resort to other sources of income- selling productive assets, overfishing, availing welfare support etc.
  • Impact on Different Classes: A clear distinction has been observed in the impact of crisis on different sections of the agrarian community- large landowners and capitalist farmers were minimally affected as compared to small landowners. A study conducted by Foundation for Agrarian Studies reveals this dichotomy- In a village in West Bengal, where potato harvest had just been completed before the lockdown, a poor farmer who had sold part of his produce at Rs 600 per bag  (50 kg), sold the remaining produce (post lockdown) at Rs 500 per bag. In the same village, a much larger capitalist farmer said he was able to store the produce in cold storage and would sell it later in the year, thus averting losses.

Answer the Clarion Call

In India, while the Government has announced relief measures and amendments in the agriculture sector, there are still no clear support systems in place to insulate the sector and farmers from the heat of such crises. There are no immediate resources available to the farmers to start production- to buy quality seeds, hire machinery, buy fertilizers etc. Every stakeholder in the agrarian chain is bearing the load of the crisis in one-way or another.

Sustainable food systems form the basis of stable and peaceful societies. By worsening existing food insecurities, Covid-19 could pave the way for another humanitarian crisis. WFP warns of a food crisis in near future if these challenges are not dealt with. Governments across the world must must pay heed to the clarion call, and act with immediate effect to save humanity from the woes of a potential hunger pandemic.

About The Author

Srishti Tiku

Srishti is a graduate in Behavioral Economic Science from University of Warwick, UK, and is passionate about using her knowledge to decipher sustainability challenges through research and analysis. As Economics attempts to explain the processes that shape lives and livelihoods, Srishti finds it fascinating to learn about emerging patterns while wading her way through issues engulfing people, planet and profit. When she is not at desk, she loves to read and watch movies.

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