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India’s sudden lockdown threatens food supply chains

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Via Financial Times

In normal times, Jaikishan Saini, a vegetable trader at India’s massive Azadpur wholesale market, would receive five truckloads of chillies, cucumber, okra and gourd from the countryside every day for sale to distributors, who supply consumers in New Delhi and other surrounding areas.

But after India’s government restricted public movements to curb the spread of coronavirus last weekend, Mr Saini lost Rs200,000 ($2,600) on two truckloads of chillies from Rajasthan, which were seriously delayed in transit, damaging the crops. When the chillies eventually arrived in New Delhi, few prospective buyers were able to reach the market.

These days, Mr Saini has reduced his incoming vegetable supply to just one truck a day. “I don’t want to take so much risk because all our transactions are on credit and no one really knows what’s coming next,” said Mr Saini. “It’s like a gamble.”

With Prime Minister Narendra Modi imposing a strict nationwide 21-day curfew on India’s 1.4bn people this week, India’s supply chains have suffered severe disruptions, amid widespread confusion about which essential businesses are permitted to operate during the lockdown.

© Dibyangshu/AFP 

Public health experts do believe the curfew will help India avert a massive surge of coronavirus cases that would have quickly overwhelmed its fragile and chronically underfunded health system.

“The lockdown is necessary — it’s essential,” said virologist Shahid Jameel, chief executive of the WellcomeTrust/DBT India Alliance, a biomedical research charity. “If we don’t do this, this country is capable of becoming another Italy.”

Ramanan Laxminarayan, director of Centre for Disease Dynamics, Economics and Policy, also believes the curfew was required. “I think we would have significantly flattened the curve with this,” he said. “Come April 15, we will have to handle a surge but it’s not that big.”

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But the lack of prior warning, and preparation, for maintaining supplies of foods, medicine and other household items during the lockdown has led to the breakdown of critical supply chains as well as concerns about how many vulnerable people will make their living, or even survive. 

Police have stopped goods trucks from moving across state lines, and harassed couriers delivering online orders to urban middle class homes.

© Rupak De Chowdhuri/Reuters

 “It’s very clear at the outset that we are not dealing with a problem of a lack of supplies,” said Rathin Roy, director of National Institute of Public Finance and Policy. “We are dealing with a problem of how to get supplies to places where they are needed consistent with social distancing.”

At the Azadpur produce market, a critical link between rural farmers and urban consumers, traders said incoming vegetables are still at just a fraction of their normal volumes.

They warn of potential shortages and rising prices for urban consumers, and huge losses to farmers, unless the government accelerates the issue of curfew passes for those involved in the produce trade.

“Movement is very slow, supplies are very slow,” said Sanjeev Sood, an apple trader at the Azadpur market. “There’s bound to be a big impact on availability.”

© Idrees Mohammed/Reuters

In rural areas, farmers are uncertain whether they can harvest or transport their crops, while rural markets — important waystations to urban markets — are closed. Government orders to restart some agricultural activities have not reached many rural districts.

“There is a lot of anxiety among farmers because they do not know what the law is today,” said Ajay Vir Jakhar, chairman of the Bharat Krishak Samaj, or Indian Farmers Forum. “The government was not prepared and now they are improvising. There is a lot of confusion among farmers about what is happening and not happening.”

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Mr Jakhar said authorities are working to sort out these logistical issues. But in the meantime, profiteering is also a problem. “Traders and shopkeepers will capitalise on the fear that consumers have that food will run short,” he said. “That is why supply chains need to be made more efficient.”

Even large ecommerce companies — including Amazon, Walmart-owned Flipkart, SoftBank-backed Grofers and Big Basket — have faced severe difficulties, with police closing their warehouses.

The disruption has already had a massive impact on some of India’s most vulnerable: urban migrant workers who lost their jobs and are now making long journeys home on foot and may struggle to get food on the way.

The government will provide aid to poor people for the next three months, but people will have to return to their villages to access it. “We are very worried about starvation deaths,” said Reetika Khera, an economics professor at the Indian Institute of Management, Ahmedabad. “People on the march like this, they are not very nourished in the first place. They can die of exhaustion.”

For some urban informal workers, the difficulty will not just be in accessing food but in having the money to buy food in the first place. 

“I have the last few rupees left after I bought 10 kilogrammes of wheat flour,” said Rameshwar Sain, a 50-year-old masseuse, whose business has been destroyed by social distancing. “I don’t know what we are going to eat after this.”

 

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