Vegetable & fruit arrivals at mandis see sharp decline amid lockdown

In a report, Credit Suisse pegs decline at 50-95% YoY

Vegetables and fruits growers are among the worst affected by the 21-day nationwide lockdown imposed to check the spread of coronavirus disease (Covid-19). This is reflected in the sharp fall in arrivals of fruit and vegetables at wholesale mandis, which are either closed or working under restrictions.

For instance, the Vashi vegetable Agricultural Produce Market Committee (APMC) near Mumbai announced closure over fears of virus spread. Pune’s Gultekdi wholesale market also shut down on Thursday, while the Vashi foodgrain APMC has called a meeting on Saturday to decide whether it should close.

It is similar situation at several big vegetable and fruit mandis throughout the country, as they are either closed or are allowing traders to bring limited quantities to the market. Such is the situation that farmers at some places have chosen to throw vegetables and milk as they could not reach mandis for lack of transport. Cases of uprooting vegetables were also reported at some places like Uttar Pradesh.

This has resulted in a 30 per cent decline in potato arrivals at 1,400 tonnes a day at the Agra mandi. Arrivals of onions should have peaked at Lasalgaon, but it has been closed. According to Credit Suisse research, “despite anecdotal evidence of a bumper harvest, market arrivals are down 50-95 per cent year-on-year. During lockdown arrivals of all perishables and cereals have fallen”.

 

The report says, “With the rabi harvest season now in full swing, market arrivals should be picking up for crops like wheat, pulses like chana, and summer fruit like mangoes”. It says the reasons for the low arrivals range from “a lack of trucks, to shortage of labour for loading/unloading material”.

Foodgrain and pulses growers are in a better position, even though several mandis are closed, because their produce is not perishable. 

To ease the situation the Union government last week wrote to all states to allow farmers to sell directly without coming to the market. However, no state has implemented the instructions yet. 
 

It is not just access to markets that has proved a problem. Farm leaders say a big issue that has cropped up because of the lockdown is the absence of ready cash, which could curb purchases of seeds and fertilizer for summer crops, and might even extend to the next kharif sowing season that starts from June.

Bhagwan Meena, a young farmer leader from Madhya Pradesh said, “Even before mandis closed, prices of several early rabi crops such as chana and mustard in Madhya Pradesh were 20-30 per cent lower than minimum support price. Now if arrivals jump after mandis are opened, prices will naturally crash”.

P Chengal Reddy, advisor to the Consortium of Indian Farmers Associations (CIFA), said the current labour shortage could extend to the coming kharif season as migrant workers look to avoid uncertainty of work. He suggested that, like with foodgrain, the government needs to arrange railway wagons for loading at all important fruit producing centres across the main producing states. These issues have once again turned the focus to the reforms needed in agriculture marketing.

Neelkanth Mishra, managing director, Equity Research at Credit Suisse, said the current situation could be used as an opportunity for reforms. “As regular (agriculture) markets are not functional, parallel channels are emerging. Some states are providing temporary permissions to large buyers like grocery chains and e-commerce firms to buy directly from farmers. Farmers are also being permitted to hawk their produce directly to consumers. If these last beyond the lockdown, they could end up dismantling the monopoly of APMCs that many have blamed for inefficiency.”

Reforms in marketing have been long overdue, despite the central government floating a model APMC Act asking states to join the National Agriculture Market (eNAM) online platform. However, progress has been slow.

Vijay Sardana, an agri-business expert, said, “It is time to have an alternate mechanism for farmers along with APMCs to sell their produce. APMCs may continue functioning, direct buying from farmers shall be promoted.”