Arrival of wheat, onion, potato, mango, banana dips 50-95% in lockdown

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SME Times News Bureau | 09 Apr, 2020
National daily arrivals of several crops like wheat, chana dal, onion, potato, apple, banana and mango are down by 50-95 per cent compared to last year since the lockdown on March 24 due to lack of trucks and shortage of labour.

According to a research report by Credit Suisse, with the rabi harvest season now in full swing, market arrivals should be picking up for crops like wheat, pulses like chana, and summer fruits like mangoes.

However, despite anecdotal evidence of a bumper harvest, market arrivals are down 50-95 percent year on year.

For some items like mangoes, the season started slow like in 2018, but by now, volumes should have risen manifold versus last year: they are down sharply instead. Reasons range from a lack of trucks, and shortage of labour for loading/unloading material.

There are other issues like in the Lasalgaon onion market near Nashik, the market itself being shut down because of a case of Covid-19 nearby.

With lower incomes during the lockdown, currently demand for perishables is likely to be weak anyway, particularly from restaurants, but that is a minor reason for the drop in arrivals, Credit Suisse said.

Market dysfunction hurts both producers and consumers, the report pointed out that as per reports, only a fraction of the nearly 7,000 wholesale markets in India are functioning.

For non-perishable output like wheat and pulses farmers have some holding power, and government stockpiles and an existing public distribution system should limit sustained market shortages.

"But for perishables like vegetables and fruits, this disruption means lower incomes for farmers (nowhere to sell: some feeding spinach to cows), whereas consumers see scarcity," the report said.

This will provide some opportunity for reform but it is uncertain how long it lasts, it said. As regular 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 virus-driven lockdown, they could end up dismantling the monopoly of APMCs that many have blamed for inefficiency. It may be too early to take a call on that," the report said.