The coronavirus pandemic has, so far, claimed many lives across the world. In India, more than 600 patients of coronavirus have been confirmed so far and a countrywide three-week lockdown has been declared to control the pandemic. The whole world is rapidly moving towards a lockdown. The stock markets are showing a steep decline. The rupee has come down to a level of Rs 76 per dollar. Industrial production, construction, tourism, transport, service and other sectors are getting severely affected. Global demand, trade and economy are facing a very negative impact.
Coronavirus will also affect our rural areas. Rabi crops are expected to have bumper production this year. The arrival of crops like mustard, peas, chana, onion, potato, etc, has begun in the market. But the coronavirus has given rise to pessimism in the market. The price of chana has come down to Rs 3,650 per quintal, while its MSP is Rs 4,875 per quintal. The price of mustard has come down to Rs 3,600 per quintal while its MSP is Rs 4,425 per quintal. The price of cotton is also running below Rs 1,000 per quintal from the MSP in mandis.
The mutual import-export of all countries has substantially gone down. It also affected the prices of soybean, mustard and other oilseeds crops in our country and the prices have fallen. The pressure on exports and prices of our rice, cotton, rubber, meat and other agricultural commodities has increased. Iran and China, a large importer of our tea leaves, have also stopped the importing of our tea leaves. The price of tea leaves has fallen to 40 per cent.
False rumours of the spread of coronavirus from the chicken have also drastically reduced the demand for chicken. Consumers are avoiding meat, fish, chicken, eggs, etc. Due to this, the prices of chicken and other meat products have nosedived. This year, our poultry farmers are likely to suffer huge losses. About two crore small and marginal farmers are dependent on our one lakh crore rupees worth poultry industry.
Maize and soyabean are mainly used as poultry feeds. The prices of maize and soybean have also fallen due to declining demand for poultry products, which will harm the farmers cultivating them. Similarly, the demand and export of our other meat products, fishery products, seafood, shrimp, etc., is also affecting the income of their respective cultivators. India is a major exporter of meat but the prices of animals of farmers are also coming down due to the ban on imports by other countries.
Due to disruption of supply and low demand, milk prices at the farmer level have also started falling which is causing loss to milk-producing farmers. The demand for food items like fruits, vegetables, spices, wheat, rice, milk, etc., is falling sharply due to the closure of hotels, restaurants, temples, and due to postponement of weddings and other ceremonies. In these circumstances, the demand for flowers is also almost non-existent, causing huge losses to the farmers cultivating flowers.
Despite good yields, the distribution system of food items is getting disrupted. There is an order to continue the essential services during the lockdown, yet the vehicles carrying essential food items on a large scale are also being unnecessarily stopped. There have been long queues of vehicles on various state borders. The driver and his associate are also facing food and water scarcity. Roadside eateries have also been closed. Due to this, the drivers are refusing to take up the assignments. Due to the strictness and police hostility, some drivers have also migrated to their villages.
Online home delivery companies complain that some of their godowns have been closed. Their employees are apprehended and misbehaved within several places while making home deliveries. It will affect the farmers in the end because their agricultural produce will not reach the consumers. If the distribution system is not improved immediately, there will be dire consequences. Due to many such constraints and closure of markets, the demand will plunge further due to non-supply. This will reduce both the demand and the price of agricultural products.
Due to the closure of various enterprises, unemployment will increase while people’s income and purchasing power would decrease. But due to disruption of the supply of food items, hoarding, profiteering and black marketing by local vendors, food items, fruits and vegetables in the market would also be costlier at the consumer level.
Crude oil prices have fallen due to the impact of international economic activity and the price war on oil between oil producing countries. It will benefit us because we import about 85 per cent of our crude oil. In 2018-19, we imported crude oil worth $112 billion (about Rs 8.40 lakh crore in today’s prices).
Crude oil prices have come down to 25-30 dollars a barrel. If this continues, India will benefit about $50 billion a year (about Rs 3.75 lakh crore). This may also help us to reduce our current account deficit and fiscal deficit. The government will also have more money to spend on rural schemes. The prices of other petroleum sector products including diesel, petrol and chemical fertilizers will also be low.
In India, more than 80 per cent of the people work in the unorganized sector. These people will migrate from cities to villages due to declining income, closure of work, job-loss or non-availability of work to the labourers who are working in cities, which will further increase the pressure on the rural economy. Outside labourers working in rural areas are migrating for fear of sickness. This may also affect the harvesting of sugarcane and of other Rabi crops, besides wheat harvesting starting in April.
This will be a big crisis for the migrating daily labour force. In view of the relief to the economy, farmers and labourers of rural India, the government should immediately increase the amount under PM-Kisan Scheme from Rs 6,000 to Rs 24,000 per farmer family per annum. This will facilitate employment to additional people migrating to rural areas. Secondly, demand will increase and the economy can get out of recession at the earliest. In this unusual situation, the country will have to take unusual steps setting aside its worries about the fiscal deficit.
Availability of food grains at the time of such a calamity is the biggest concern of the government. Thankfully, the Food Corporation of India has a stock of about 7.75 million tonnes of food grains and rice, 3.5 times more than the buffer stock. A month later, about 100 million tonnes of bumper wheat crop will also come to the market. The procurement and storage of this crop was a matter of great concern to the Government due to the already filling up of godowns.
But now the governments are deciding to distribute food items in advance of several months and more than the prescribed amount to the ration card holders. Further, decisions are also being taken to provide free food grains so that no one is hungry. This will also solve the problem of having huge food grain stocks in the country. NAFED also has a stock of 22.5 lakh tonnes of pulses. Rabi pulses-chana, masoor and pea arrivals are also arriving. There is also no shortage of milk and sugar. We import two-thirds of our requirement of edible oil, there is no problem now. Even if the lockdown continues for long, the public will not be short of food grains and other food items.
In the face of the current calamity, the abundance of food grains in the country a huge relief to the government and citizens. There is, however, a need to ensure timely procurement, storage and distribution of food items in time of Rabi crops, otherwise the farmers, consumers and the country will have to pay a heavy price.
(The author is the president of the Kisan Shakti Sangh)
