India is home to about 120 million smallholder farmers who contribute over 40% of the country’s grain
production, and over half of its fruits, vegetables, oilseeds and other crops. Much of the global share of
food staples such as rice and wheat come from India, and almost half of the population in India depends
on agriculture for their livelihood.

Every year, Indian farmers face risks such as low rainfall, price volatility and rising debts. But risks from
the COVID-19 pandemic are putting new challenges in front of a sector that is already under threat.

The nationwide lockdown came at an unfortunate time for farmers, as it was the harvest season for the
rabi (winter) crop. The lockdown created both a shortage of labor and equipment – migrant laborers in
India usually move to rural areas during harvest, and smallholder farmers often rent harvesting
equipment as this is cheaper than purchasing it.

Consequently, farmers have not been able to harvest their bumper crops of cereal and oilseed harvest
this season. In some places the crops have been abandoned, while in others the harvest is coming more
than a month late, in hand with limited and more expense labor.

In addition, it was estimated that although India’s food bank had more than three times the minimum
operational buffer in stock, supply and access is a critical issue. Long supply chains have been severely
affected, especially at the beginning of the lockdown when transport was restricted. Drivers abandoned
trucks full of produce in the middle of interstate highways. Markets eventually started running short of
supplies, owing to food rotting in transit or never making it to point of sale.

ITC’s Agribusiness team has been responding to the situation by using its digital advisory application “e-
choupal” to procure produce. E-choupal provides information to farmers about market demand of their
produce, market prices etc. to allow them to make well-informed decisions and fetch competitive prices
in the markets.

In these challenging times, when regular transport and markets have not been functioning, ITC utilized
their already existing e-choupal infrastructure and network to procure farm produce directly from
farmer locations, and introduced supply chain interventions like multi- point rake movements, and
coastal container movements to ensure uninterrupted movement of produce.

In the first few days of the lockdown, consumers resorted to panic buying and hoarding essentials such
as flour, rice, sugar and oil. Prices of sugar rose in cities where supplies were limited and fell in other
places due to over-supply. Gradually, with logistical restrictions, markets fell short of supplies and the
prices of these commodities increased. But the farmgate prices of fruit, vegetables, milk, meat and
poultry in India have crashed because of lower demand.

Another issue that is cause for concern is the availability and access to seeds, fertilizers and pesticides
for the next crop season. Post the rabi harvest in April, farmers prepare for the next (kharif) season in
May. However, the COVID-19 induced disruptions have reduced production capacity for farm inputs and
have led to an increase in price, making these resources inaccessible to smallholder and marginal
farmers in the country.

While large landholding farmers and businesses may be able to weather these shocks, they put
enormous pressure on smallholders who work with limited resources and income. Resuming business
operations will be key to ensuring harvest security in the coming season.

We have seen several businesses such as Yara International stepping up to support the sector. Yara
International worked with the local government authorities in India, their vendors, suppliers and
transporters to resume operations albeit at low capacity. Their operations are critical for supplying
seeds and inputs to farmers for the next cropping season, and their liaison efforts with their key
stakeholders helped instill confidence to resume operations along the input supply chain.

Other businesses have a good track record of helping cash-strapped farmers reduce their vulnerability to
both endemic and pandemic risks, by making credit easily available to them. For example, Natems, an
Indian firm in the sugar sector, has made approximately USD $500,000 available to 3000 smallholders in
the last four years in the catchment of their operations.

The COVID-19 crisis is not permanent, but it has magnified the vulnerabilities already present in the food
system in India. Taking stock of the issues can help governments and businesses create stronger, more
resilient supply chains and measures to support smallholder farmers, who are critical to the food supply
chain.