Business Standard

Farm-to-fork logistics on the edge

As lockdown enters sixth day, the supply chain remains largely disrupted but things look to settle down gradually

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As the lockdown enters second week, the supply chain, dominated by small players and highly disorganis­ed, remains largely disrupted. SANJEEB MUKHERJEE writes

Simran Sandhu, a farmer in Haryana, had high hopes from his wheat crop. Not only was the harvest looking good, he expected to get a good price as market prices had improved marginally over the last few months.

Two events put paid to his plans. Frequent unseasonal rain in the latter half of January, followed by the nationwide COVID-19 lockdown, has left Sandhu fearing he may lose a substantia­l part of his harvest as labourers working in the fields have vanished and harvesters are difficult to hire.

Shops selling fertiliser and seeds are closed, clouding even the prospect of sowing short-duration summer crops, such as moong.

Hundreds of kilometres away, Rajkumar Bhatia, a fruit trader in Delhi’s Azadpur mandi, has a problem of a different kind. In the initial few days of the lockdown, fruit truckers came to the mandi but there wasn’t enough labour and small vehicles to ferry them forward because the police were enforcing the lockdown strictly.

The logjam prompted the Centre and states to order the police to exempt the movement of essential items. “Since Thursday, the situation has improved, but I am still apprehensi­ve,” said Bhatia.

On Sunday, there were reports from Azadpur mandi that tomato sellers faced a huge challenge in arranging for containers to supply the produce as their move

ment hasn’t started in full strength.

Simon George, president of Cargill India, one of the most well-known FMCG companies in the country (makers of brands such as Nature Fresh, Sweekar, and Sunflower), says that retail demand for edible oils from foodservic­e businesses, such as hotels and restaurant­s, has gone down. But this has been somewhat compensate­d by the rising retail sales as consumers stock up more and eat more at home.

George has faced a challenge in running his 12 plants in the first few days but has ironed out many of the wrinkles. “By next week, I sincerely feel that a lot of things will get sorted out and the movement of trucks will be smooth,” said George.

For a final packaged consumer goods item, such as biscuits, to reach the consumer, he adds, the logistics for the supply chain, from procuring raw materials in the form of wheat flour, sugar, and emulsifier­s right up to packaging and linking to the distributi­on network in the form of dealers and retailers, needs to run like clockwork. It is the links — from the food producer, seller, procuremen­t people, and processors through to the consumer — that have been broken and urgently need mending. Unlike in developed countries, this chain in India is diverse, widespread, highly scattered, disorganis­ed, and dominated by small players.

A small disruption in a place can upset the chain, triggering a massive logistical nightmare and breaks in supplies, which can push up the prices of essential items.

Already, in some markets of the country prices of fruit and vegetables have moved up by 30-40 per cent in the past few days.

The fear of being harassed, George believes, has to be removed from the minds of logistics operators so that everyone can prepare for a long haul, not just 21 days.

The Centre and states have taken a slew of initiative­s to clear the confusion, streamline the movement of trucks, and allow the mandis to function, which is the only way farm goods can reach consumers.

On Friday night, the Centre exempted a host of services from the lockdown: Mandis, procuremen­t agencies, farm operations, agricultur­e machinery hiring centres, farmworker­s, fertiliser pesticide and seed-manufactur­ing and -packaging units, and the movement within and between states of farm implements.

It has also constitute­d a high-powered panel under Defence Minister Rajnath Singh to mitigate the supplychai­n problems.

The hope is that this will enable the smooth harvesting, transport, and sale of the rabi crop, along with fruit and vegetables.

Some states, such as Haryana and Punjab, have incentivis­ed their farmers to harvest the vital wheat crop late.

Even before the Centre’s circular was issued, Rajasthan, Madhya Pradesh, and Uttar Pradesh — all big rabi procuremen­t states — had already relaxed the lockdown norms to ensure a smooth harvest and its subsequent transporta­tion to the mandis.

If restrictio­ns end up being extended beyond 21 days, the question is what impact it will have on the economy and particular­ly the poor and vulnerable.

“Consumer confidence will depend on how much cash people have in hand for spending. Unless that improves fast, we can expect 12-18 months of subdued growth,” said George.

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