By Smriti Verma, Anjani Kumar & Arabinda K Padhee
The evolution of the situation around Covid-19 is becoming critical. Governments have already announced guidelines for citizens to protect themselves. Packages have also been declared to safeguard the interests of various sectors. What could be the possible fallout on the agricultural sector – 50% of the population still depends on it – is indeed worrying.
After the nationwide lockdown was announced for 21 days, the FM declared a relief package of Rs 1.76 lakh crore. At a time when large crowds of poor and marginalized people are struggling to support themselves; and the perils of hunger, unemployment, disease and death looming before them, the announcement of the economic relief package is indeed a fitting step and offers a ray of hope. With the aim of providing immediate and material assistance to workers in the unorganized sector, migrant workers, as well as the urban and rural poor who have been left without food and money, the GF has detailed the transfer modalities. According to the new Pradhan Mantri Garib Kalyan Yojana, an additional 5 kg of wheat or rice per household and 1 kg of legumes available in the region will be distributed free of charge for three months to 60% of the population.
The majority of rural populations should benefit from these measures. The immediate benefit would come from the early release of the first installment of Rs 2,000 directly under PM-KISAN. In addition, the government has increased the wage rate for workers under MGNREGS, which is supposed to meet the needs of wage earners, including agricultural laborers (who do not receive benefits under PM-KISAN).
As the working middle class learns to cope with this unprecedented shutdown across the country, it is creating significant hardship for the poorest strata, who have lost nothing but livelihoods.
At a time when those most affected are discouraged daily by the fear of deprivation, the announcement of the relief program comes as a reassurance. However, while these are benign measures, implementation challenges abound. The most crucial challenge that stands in these times is the time lag between when they are needed and the actual time of delivery. This is especially true in the provision of the most critical forms of support — food and cash (for both the urban and rural poor). Despite the rush to implement food and cash transfers, PDS cereals will take their time moving from depots and warehouses to fair-price stores where people can buy for consumption. To avoid possible transmission through gatherings, few state governments have already started door-to-door delivery of PDS items. This is indeed good news. Given the wide geographical spread of the virus in the country, a more decentralized approach to food distribution through local food supply chains could improve the dire situation.
The proper functioning of the supply chain (with adequate security measures for those involved) must be ensured by the machinery of government, as the prevailing crisis situation presents well-aligned incentives for hoarding and seeking rent among ill-intentioned suppliers.
Cash transfers will also be made via DBT to reach the promised sum directly into the bank accounts of the beneficiaries. However, this in itself would exclude a substantial number of those who were expected to benefit from the program, given the limited number of enrolments. Migrant workers are unlikely to wait for their allowances before undertaking more active and drastic survival measures. The colossal crisis we are facing and its unimaginable impact on human lives forces the government to neglect the fiscal impact of these measures. But if these benefits do not reach the needy in time, the human and economic repercussions will be significant.
It is the peak of the Rabi season and therefore the movements of farmers and farm workers as well as machinery for harvesting and other critical operations are extremely essential. As the government has already lifted restrictions on inter- and intra-state movement of harvesting machinery and related agricultural machinery as well as supply operations, it is expected that the harvest of Rabi’s crops will not meet not many problems. After all, a good agricultural harvest will decide the future strategy. In this unprecedented time, where manufacturing and services could be severely affected, the agricultural sector could save the day by becoming a growth engine for the Indian economy.
Kumar and Verma are agricultural economists in the South Asia office, IFPRI and Padhee is country director for India, ICRISAT. Views are personal