Lifestyle

Innovations For Food Security At The Time Of COVID-19

BY Soko Directory Team · August 17, 2020 08:08 am

COVID-19 is likely to have a widespread, deep, and prolonged impact on every sector and segment. Farmers and cultivators in countries like India are rapidly starting to bear the brunt of the pandemic, even though restrictions and lockdowns have largely spared agriculture and allied sectors.

The disruptions have affected the long value chains between cultivators and consumers. Retail prices have shot-up, wholesale prices continue to fall, while producers struggle to find buyers for their produce. In many areas, farmers lack access to adequate labor or equipment to harvest standing crops.

The impact on the next cycles of cropping is going to worsen as several factors start to play out. These include constrained logistics of input supplies to farmers, an anticipated shortfall in the availability of credit, subdued demand, unpredictable consumer behavior, and reduced buying power. Sadly, the worse may be yet to unfold!

What can players in the ecosystem amid the gloom? Are there innovative and practical solutions to aid food security? Can we prevent massive wastage or losses and protect the livelihoods of smallholders?

Lessons from innovative ideas and approaches, and their rapid replication

India is known for its frugal and rapid innovations, termed colloquially as jugaad. Agtechs and other stakeholders in Agri value chains are trying innovative approaches to reduce the fallout of COVID-19.

Lessons must be learned quickly, evaluated, and those that work should be scaled up. Governments, private players, investors, and start-ups will need to recognize solutions with high potential and invest in them to expand them rapidly. These are trying times like never before. Yet they also offer opportunities for unprecedented innovation, learning, and evolution of collaboration models.

Let us start at the consumer end. Household demand for staples and perishables is still high. We can say that this demand is reasonably inelastic, especially in urban areas and in the near-term. Closure of restaurants and workplaces has expanded demand somewhat, at the household level. Moreover, new demand centers like community and government-sponsored kitchens have surfaced.

Entrepreneurs have developed simple demand aggregation solutions using Google Forms or over WhatsApp messaging. Once logistically feasible demand is generated, for example, a suitable truckload, entrepreneurs are completing fulfillment directly from farm gates. Agri-techs can do this either directly or in collaboration with active farmer cooperatives or producer organizations. Noteworthy examples include Praakritik, Sahyadri Farms, and loop from Digital Green.

Based on anecdotal evidence, farmers who have been able to connect through these entrepreneurs are harvesting under-ripe fruits and vegetables. Earlier, market intermediaries would undertake the ripening process down the value chain. However, the current trend—and fear of coronavirus—makes consumers store fruits and vegetables for a couple of days before consuming them.

This means that ripening is now happening on the shelves of consumers. This is beneficial for farmers as it reduces wastages. Moreover, the farmer has factored the increased time required to get the product to the consumers with the prevailing lockdown in place.

Governments, such as in Maharashtra, are trying to devise innovative solutions. They have tied-up with leading farmer producer organizations to supply products directly to households. However, logistics and fulfillment need considerable strengthening. Getting to scale with such models is the challenge. Agri-techs that have robust farm-to-fork supply chains can provide important lessons.

Governments should collaborate with agri-techs that have the outreach and are capable of scaling up, rather than trying to create impromptu farm-to-fork supply chains.

As we move up the value chains, wholesalers and aggregators are facing a slowdown in demand from retailers and vendors. This is because of a combination of issues related to logistics and the partial closure of retail markets. Overall, wholesale prices are being driven down while the agriculture value chain from farm to fork faces many roadblocks. The friction in the supply chain has multiplied because of the lockdown. Reduced wholesale prices and increasing retail prices reflect the situation—not a happy one for either the farmer or the consumer.

The year-on-year trend in the Wholesale Price Index (WPI) for food grains, oilseeds, vegetables, fruit, and poultry exhibits a sharp downward trend. The disruption in retail supply chains of food grains and perishables is causing uncertainty in supplies and fluctuating prices. Meanwhile, panic buying and hoarding by high-income segments have started to create shortages for low-income segments.

Governments and local bodies need to streamline operations of agri-markets even as they ensure safety. Some states have staggered the working hours in markets, with separate timings for buying fruit and vegetables and longer opening hours throughout the day. Wholesale agri markets are functioning from midnight to early morning in some districts in Uttar Pradesh. This discourages retail buyers from flocking to these markets in search of bargains. Other states are identifying new marketplaces to expand space for agri-transactions while reducing mass gatherings.

The critical role of self-help-groups

Low-income segments receive a significant part of their food supplies through the Public Distribution System (PDS) in India. Women self-help groups (SHGs) can play a vital role in strengthening the distribution of food grains. In the state of Bihar, SHG members undertake distribution of a select basket of food grains for low-income households. This is managed through a World Bank-supported Food Security Fund (FSF) program.

In the state of Uttarakhand, SHGs and village organizations are actively involved in cleaning, sorting, packaging, and distribution of a basket of food grains. The state government has gone a step further to broaden the food basket to include local millets, which add nutritive value while catalyzing demand from local smallholders—thereby adding to their revenue streams.

SHGs and women cooperatives have proven their agility in this time of crisis. They are actively involved in producing new categories of products that are in demand. These include fabric masks, aprons, sanitizers, and soaps. The state rural livelihood missions (SRLMs) drive most of the SHG programs. State governments need to share lessons across different SRLMs and replicate innovations and best practices to achieve better outcomes.

We now analyze how farmers, who are at the top of agri value-chains, are coping.MSC conducted a short research exercise with a few farmers, rural aggregators, and traders. The following exhibit summarizes the situation of the farmers and the distress they face.

By Puneet Chopra, T.V.S Ravi, and Rajendra Kumar, Business Managers at Microsave Consulting-MSC

About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory