Farm exports take a dip due to Covid-19 scare, may take months to recover

Non-availabilty of labour and transport takes a toll on shipments; bottlenecks at customs exacerbate problem despite round-the-clock clearance by govt

Rahul Sheth Bankar, a grape exporter from Nashik, has invested Rs 3-3.5 lakh in his 20-acre garden on the outskirts of the city.

After the extended monsoon caused a huge loss during the last harvest in 2019, Bankar was hoping to make some profits as this year's grape output looked good. 

Just as he was harvesting his produce, the government imposed the 21-day nationwide lockdown last week to control Covid-19 cases in India.

Suddenly, in a span of few days, his world came crashing down and instead of reaping good profits, Bankar is now working to cut down his losses.

“I am devastated. Despite the fact that mine is largely an export-oriented garden, I ám willing to sell my produce at less than half the rate in the local markets, but no one is willing to buy,’ he sayd over telephone from Nashik. "Even wine and liquor makers who used to buy my grapes for over Rs 20 a kilogram and not willing to offer even Rs 5 currently."

“Being a highly perishable crop, the ripened fruit can't be kept on the vines for long while exporting them is out of question. Despite relaxation of the rules, things are simply not moving on the ground,” he says.

"When there is restriction on the gathering of more than five persons, how will the orders enabling free movement and resumption of agriculture operations work," Bankar asks. "March 15 to May 15 is the peak season for Indian grape exporters to European nations."

"The main problem is non-availability of transport facilities and labour. Traders who bought grapes for Rs 70 per kg a fortnight ago are now not ready to pay more than Rs 10-12. The local retail market is closed. So we are looking for new markets," a PTI report said, quoting Sopan Kanchan, president, All India Grapes Producers Association.

Fisheries impacted too

Kanchan is not alone. B K Mishra, Managing Director of National Federation of Fisherman’s Cooperative has seen the sector from close quarters for more than 25 years. He says despite best efforts, there is no large-scale selling of fish and the business has come down to just 5-10 per cent of what it was a few weeks back.

“The Rs 45,000 crore fish export business has been badly impacted as no one is willing to venture out in the seas and production is down,” Mishra said. 

The fisheries sector provides direct and indirect employment to almost 16 million people, whose livelihood is now at stake.

Among the many sector to have been directly and indirectly hit by Covid-19 crisis is farm exports, which also includes dairy and fisheries.

Few takers for buffalo meat

According to some reports, before the lockdown kicked in, the lucrative buffalo meat export business in India was already staring at almost 50 per cent drop in demand between February 2020 and March 2020 due to falling consumption from Vietnam. A large part of the meat sold to that country eventually makes its way to China.

Since the coronavirus outbreak was detected in China this January, Indian exporters have received no fresh orders from Asian and middle-eastern markets, which cumulatively account for nearly 65 per cent of the country's direct and routed buffalo meat shipments.

Basmati-rice exports, which have a big share in India’s total farm shipments, have also taken a beating as the world fights coronavirus. The lockdown has further impeded the movement of containers and consignments.

The criticality of farm exports is that they are linked with the well-being of a large segment of farmers, particularly those growing crops that have strong export potential.

Though policy makers have tried several measures, India’s farm exports have risen marginally in the last few years for a variety of reasons.

The country's agricultural exports stood at $38.73 billion in 2018-19, growing by just 0.8 per cent a year. The growth rate nosedived from 15 per cent in 2017-18. 

Where the problem lies

Commerce Department officials hold the imposition of non-tariff barriers as the prime reason for the volatility in export numbers. Total agro exports stood at $39.33 billion six years ago. Fresh fruits is among the few categories that showed positive growth between 2017-18 and 2018-19.

The present Covid-19 crisis could further push back exports as road transportation is difficult while ports and airports are highly clogged.

According to reports, though the government has allowed round-the-clock customs clearance for three months, apart from implementing other measures to ease the situation, there are other difficulties on ground. 

Non-essential shipments have already clogged ports and airports, with agents or brokers not turning up due to unavailability of logistics partners and transportation.

Customs clearing has also taken as big hit due to the Covid-19 lockdown and the consequent difficulty in the movement of staff.

The Mumbai Zone Customs Brokers Association in a representation to the Principle Chief Commissioner of Customs appealed for special passes for its employees to attend office, special orders for its employees on guidelines to maintain social distancing and separate means of communication.

“Though customs clearance has been included in special exempted category, ground-level implementation is very problematic,” an official said.

Unless these implementation issues are sorted India’s farm exports could suffer a big jolt in the weeks to come.