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FICCI Recommendations for Agriculture Related Issues that Needs Attention during COVID-19 Lockdown

Amid the ongoing crisis due to countrywide lockdown, FICCI (Federation of Indian Chambers of Commerce & Industry) has recently released recommendations and sent it to the government concerning over the ongoing issues related to agriculture, poultry and harvesting of Rabi crops that need attention during COVID-19 lockdown. Moreover, FCCI has issued recommendation over effective procurement and storage of Rabi harvest, Agri-inputs in view of the upcoming Kharif season, Irrigation equipment, Farm machinery, Cold stores, Relief measure for the Poultry sector and Shrimp Industry.

Pronami Chetia

Amid the ongoing crisis due to countrywide lockdown, FICCI (Federation of Indian Chambers of Commerce & Industry) has recently released recommendations and sent it to the government concerning over the ongoing issues related to agriculture, poultry and harvesting of Rabi crops that need attention during COVID-19 lockdown. Moreover, FCCI has issued recommendation over effective procurement and storage of Rabi harvest, Agri-inputs in view of the upcoming Kharif season, Irrigation equipment, Farm machinery, Cold stores, Relief measure for Poultry sector and Shrimp Industry. 

Recommendations regarding Effective procurement and storage of Rabi harvest 

Allow mandis to operate smoothly:

For ensuring that the supply chain of food, including processed food, is not disrupted, it is important that mandis are allowed to run after ensuring appropriate protection and hygiene measures. Food processing units should be allowed to function without any artificial distinction between essential and non-essential.  

More procurement centers should be opened:

The number of procurement centers need to be increased in the states where arrivals are expected to start in a few days. Farmers should not have to transport more than 3 km to offer their produce for MSP operations. The number of trucks for lifting the procured stocks from procurement centers needs to go up substantially. Otherwise, there will be shortage of space at procurement centers. Sufficient storage space needs to be created at warehouses of FCI and State agencies also. If covered warehouses are not available, proper arrangements for CAP storage of wheat should be made.  

APMC regulations should be relaxed which prohibit sale and purchase outside mandi jurisdiction:  

Farmers of perishable produce (vegetables, fruits, milk, fish, meat etc.) should be allowed to sell their produce outside the regulated markets. Govt. must ensure that the police help farmers who are bringing their produce to mandis or the places where it can be sold. This includes retail shops as well as street vendors who are selling the same in the urban areas. Smooth transportation of all food items into urban areas must be allowed.  

  • Storage charges incurred by small and marginal farmers for six months stocks kept by them in WDRA registered warehouses or cold storages for which eNWRshave been issued, should be taken care of by the Government.  

  • Guidelines issued by the MHA on the announcement of the 21 day-lockdown, did not specifically include “Fumigation and Pest Management as “Essential services”. “Pest Control Services & Fumigation Services at warehouses” are equally required for blocking the spread of the Corona Pandemic & keeping Agri commodities infestation free during storage. Therefore, this should be enlisted as essential services. As of now, Only Maharashtra had exempted “Fumigation & Pest Management” services in their Orders. * As per scientists of the Indian Council of Agricultural Research, around 35% of India’s agricultural crop is lost due to pest infestation, a significant part of which is during storage.

Ensuring the supply of seeds and other Agri-inputs in view of the upcoming Kharif season 

Seed related concerns: 

Every state has issued advisory and exempted Agri- input industry, (particularly seeds). However, agricultural officials in districts do not have clarity regarding the issuance of permits for opening the premises and permits for employee movements. 

Concerns related to Irrigation equipment:  

In the context of the forthcoming Kharif crop, farmers will require the deployment and maintenance of irrigation systems. States like Uttar Pradesh, Bihar and Andhra Pradesh have clearly stated that irrigation equipment would be covered in the list of essential items. However, there is no guideline from center on including irrigation equipment in essential list. Due to this, companies are not able to start operations and provide equipment in these states. The equipment stocked in warehouses will not be adequate to meet the demand. Therefore, guidelines from the Centre are important. 

 (2.3) Concerns related to Farm machinery:

Addendum issued on 3 April by Centre Government, does mention about relaxation in farm machinery. However, tractors (which does not fall in the definition of farm machinery) are not mentioned specifically, which is causing problem at the state level. Companies are getting continuous requirement from farmers to purchase tractors since it is a sowing/harvesting/land preparation time for Kharif season, but they are unable to meet demand due to ambiguity in circular and hindrance by local authorities.

(2.4) Reschedule crop loans and investment loans taken by farmers:  

Loans taken on Kisan Credit Card as well as investment loans taken by small farmers may be rescheduled and no interest should be charged for six months. (3) Cold stores: Impact on cold chain units: The cold chain industry runs on the backbone of fuel and power. The cold chain units are under severe distress and fear of disconnection of electricity supply, due to delay in payment or inability to pay electric bills. If the electricity supply of the cold storage unit is disconnected, that would lead to a national loss of a few thousand tons of food material. Moreover, if food items get rotten, there would be a widespread issue of hygiene and smell. Impact on potato cold stores: Potato harvest is due in this season and cold stores are busy buying potato for storage. Shortage of labor and restriction on truck movement will result in low capacity utilization, default on bank loans and wastage of potato on the field with losses to farmers. This may lead to an increase in the price of potatoes also in the coming three to four months.

Suggestions in this regard:  The electricity rate of cold storage units to be matched with the agricultural tariff of the state. The rate of electricity on national power exchange is Rs. 1.90 while the cold storage units are being charged ranging from Rs. 6.50 to Rs. 8.50. It is requested that during this time of distress, electricity unit rates for cold stores be decreased. It is pertinent to mention, that Maharashtra and Haryana are already charging Agriculture Tariff from the Cold Storage Units. 

 Potato harvesting and associated logistics should be specifically exempted from the lockdown restrictions. Cold stores should be allowed to engage labor and trucks to move produce from the field to stores.

  Cold stores should be given power subsidy for 6 months by GOI to compensate for lower capacity utilization.                                                                                        

(4) Relief measure for Poultry sector :  

Today, the Indian poultry sector employees more than 10 Lakh poultry farmers and provide Rs. 1.2 Lakh Crore to the Indian GDP directly. Poultry is also giving direct benefit to more than one Crore Maize and Soya agriculture farmers and provides direct and indirect employment to more than ~5 Crore citizens of the country engaged in poultry production, trade, feed, agriculture crops, logistics, poultry-based products, exports, etc. The recent outbreak of COVID- 19 has diminished the demand for poultry products, which is immensely impacting the poultry industry. Despite the fact, that there is no scientific evidence to show that coronavirus spreads through eating chicken, mutton and seafood the situation is not improving.  

 Impact on Maize and soybean farmers: 

 In absence of demand for poultry products, maize and soybean farmers are also suffering. As a result, the prices of Maize have dropped from Rs.25/- to Rs.15/- per Kg in the last few days.  

 Impact on Poultry industry: 

 Prices of eggs have now decreased to Rs.2/- per egg at the farm gate. Every poultry farmer is suffering an average loss of Rs.130/- per bird. Due to such a scenario, poultry farmers have even started destroying and culling their produce, which needs immediate attention. As per industry estimates, the Current 2.5 months loss of Poultry Industry (Broiler Farmers & Layer Farmers, Integration Companies and Breeding Companies) beginning from 1 st Feb to 15th April’ 2020 until Lockdown opens is of INR 22500 CR. 

 Shrimp Industry  

India is the 2nd largest Shrimp producer in the world and is the largest employer of women in the segment. The farmers are holding a stock of about USD 1 Bn - 1.5 Bn primarily for exports (Total Shrimp exports are Rs 30000 crore - approximately). Major shrimp producing states are (AP, TN, Kerala, Gujarat). Shrimp is an extremely perishable commodity and if not procured within time, deteriorates very rapidly. 

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