2021 Crisis for Farmers: Covid Lowers Agri Produce Demand
In the year of the Covid-19 pandemic, the agriculture sector in India is projected to have a positive growth of about 3.5% though the rest of the economy will show a negative trajectory, some banks say up to 10% on the minus side. When the GDP growth tanked -23% in the first quarter of the 2020-21 Financial Year, agriculture was untouched by the punishing lockdown imposed in a hurry by the Indian Government.
But this may not be good news for the farmers according to researchers from the Bengaluru-based Institute For Social And Economic Change. Professor Parmod Kumar of ISEC’s Agricultural and Development and Rural Transformation Centre predicts that but for wheat, rice, and cereals, demand for other farm produce – like pulses- may decrease up to 25%. This is due to decreased purchasing power in an economy that has shrunk by more than Rs 20 lakh crores. The hardest hit were the large numbers of people living in rural areas that account for up to two-thirds of the country’s population.
Prof Pramod Kumar predicts that in 20-21 wheat, coarse cereals, and rice demand may increase by 7.2%, 6.3%, and 6% respectively but other farm produce may see a decline of up to 48% as in dry nuts or 40% in meat consumption. Oilseeds may see a trough to almost 45% while milk too may be a big casualty with demand dropping 28.8%. So the year 2021 may see prolonged pressure on farm produce prices where farmer may not get the fruit for his labour during the pandemic time. However, the demand may start rising in 21-22 but at a slower pace than it did from 2012 to 2019.
A significant part of the study is that the demand had already started declining before the Covid 19 Pandemic and the lockdown of the economy. The pressure on jobs and large-scale migration from cities and towns has adversely affected the demand for foodstuff. Only government-regulated foodgrains and continued procurement of wheat and paddy held up the demand for these staples. However, the produce whose price is determined by the market are seeing lesser demand. Vegetable demand may reduce from 197 to 147 MT; Fruit from 114 to 105 MT and milk products from 161 to 31 MT.
The farmers agitating against the three central farm laws are insisting on legal provisions for MSP continuation are mainly those who are producers of largescale wheat and paddy. The demand shrinkage may hit the smaller farmers who diversify their production to pulses, fruit, and vegetables. These are the farmers who are spread all over the country and not organized enough to negotiate with the government as the farmers from Punjab, Haryana, and Western UP who are fronting the current agitation.
The study by ISEC has come at an opportune time when the Government is trying to reformulate its policy on the farm sector which is diverse, disparate, and soon, may become desperate by the time we enter 2022.
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Prof Pramod Kumar predicts that in 20-21 wheat, coarse cereals, and rice demand may increase by 7.2%, 6.3%, and 6% respectively but other farm produce may see a decline of up to 48% as in dry nuts or 40% in meat consumption. Oilseeds may see a trough to almost 45% while milk too may be a big casualty with demand dropping 28.8%. So the year 2021 may see prolonged pressure on farm produce prices where farmer may not get the fruit for his labour during the pandemic time. However, the demand may start rising in 21-22 but at a slower pace than it did from 2012 to 2019.
A significant part of the study is that the demand had already started declining before the Covid 19 Pandemic and the lockdown of the economy. The pressure on jobs and large-scale migration from cities and towns has adversely affected the demand for foodstuff. Only government-regulated foodgrains and continued procurement of wheat and paddy held up the demand for these staples. However, the produce whose price is determined by the market are seeing lesser demand. Vegetable demand may reduce from 197 to 147 MT; Fruit from 114 to 105 MT and milk products from 161 to 31 MT.
The farmers agitating against the three central farm laws are insisting on legal provisions for MSP continuation are mainly those who are producers of largescale wheat and paddy. The demand shrinkage may hit the smaller farmers who diversify their production to pulses, fruit, and vegetables. These are the farmers who are spread all over the country and not organized enough to negotiate with the government as the farmers from Punjab, Haryana, and Western UP who are fronting the current agitation.
The study by ISEC has come at an opportune time when the Government is trying to reformulate its policy on the farm sector which is diverse, disparate, and soon, may become desperate by the time we enter 2022.
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