Alternative marketing channels

Pressing the reset button on food value chains in Maharashtra

Food value chains in Maharashtra start with vulnerability and end in vulnerability. At one end of the value chain stands the small farmer whose livelihood and income security are currently under the Covid shadow. At the other end of the chain, there are 60 million poverty-ridden people, daily wage earners, migrant workers and families, whose food and nutritional security stands threatened. Even as the state government plans its exit from the lockdown, reconfiguring the food value chains is needed to adjust to the new “Covid normal”.

As it unfolded, the Covid pandemic created multiple issues within the traditional mandi channels. Transport was disrupted. Traders and labourers were neither able nor willing to work at the overcrowded, unclean mandis. Supplies through the APMC (Agricultural Produce Market Committee) mandi channels started faltering. However, in India, APMCs are simply too big to fail (TBTF). 

George Shultz, former United States treasury secretary, had suggested rather famously, “If they are too big to fail, make them smaller.” And that is where the solution lies. An alternative marketing channel, albeit experimental in nature, was needed to get fresh produce through to consumers.

Immediate solution: The Department of Agriculture (DoA) set up helplines and contacted nearly 3,000 farmer groups throughout Maharashtra. From March 25, 2020, nearly 2,000 tonnes of produce is being sold daily by the farmer groups to consumers at 2,500 identified locations throughout the state. Within Pune Municipal Corporation (PMC) and Pimpri-Chinchwad Municipal Corporation (PCMC), nearly 127 farmer-producer companies have been connected to cooperative housing societies, to which they bring in pre-packed vegetables in tempos and vans. About 500 tonnes of fresh produce is being directly sold to 5,000 cooperative housing societies in this manner. DoA has also facilitated 500 small mango farmers in Ratnagiri and Sindhudurg to directly sell their produce to cooperative housing societies in different districts in Maharashtra. These experiments have offered uninterrupted food supplies to consumers, and huge learnings on alternative marketing channels for the state government.

Intermediate solutions: As we eventually exit from the lockdown, the department should identify the successful direct marketing experiments. Attention needs to be given to strengthening the backward and forward linkages — packing, transport, branding — so that the experiments can be continued and scaled up across the state.

The exit from the lockdown should also lead to restarting the APMC-led chains, though with some important modifications. The government will need to coordinate supplies of major produce coming to Maharashtra from other states and plan issuance of permits along identified routes.

APMC mandis may be asked to stagger arrivals by commodity groups. Introduction of the “Pune Pattern” wherein vegetables and fruits are received on alternate days across all major mandis in the state, could be useful. Such staggering helps in reducing overcrowding of farmers in the market and helps the mandi to carry on business with less labour.

It is indeed strange that a virus was needed to discipline us into cleanliness.  APMC mandis should be sanitised and disinfected. Basic hand-washing facilities should be provided. APMC traders and labour need to be provided with masks and gloves. Masks should be made mandatory for auction participants. Only those wholesalers and retailers participating in the auction should be allowed to enter the APMC mandis.  This is possible only if the local bodies create facilities for wholesalers and retailers to sell bulk fresh produce at ward level to retail consumers.Thus, inter-departmental coordination and collaboration is key — DoA, Department of Marketing and the Municipal Corporations cannot work in silos.

The government should immediately notify the Maharashtra State Warehousing Corporation (MSWC) warehouses as markets. This will facilitate integration of Electronic Negotiable Warehousing Receipts (e-NWRs) into the Electronic National Agriculture Market (eNAM), thereby helping the farmer get the best prices by accessing markets across the country.

Most importantly, the government needs to develop a unified command and clear-cut standard operating procedures for each and every stakeholder till the last operating level. Without this, all the other strategies outlined above can fail. Individualistic strategies in particular locations will not help as it gives lot of discretion to the local authorities and this, in turn, disrupts the entire supply chain.

In the long run: When TBTFs teeter, they expose the underlying fault-lines. Issues, which we knew about, but we did not care enough about. Issues such as non-adherence to MRLs, indifference about food handling protocols, the non-existing sanitation levels at the APMCs, absence of certification and traceability. The challenge before the state government as it tries to re-configure the food value chains is huge, but so is the opportunity to set a few things right.

In the long run, capacity building amo­ngst farmers on GAP certification, MRL and safe food standards and food handling protocols is needed. Consumers too have to be sensitised to nutrition and safe consumption. “Organic” might be some dista­nce away, but “safe” should certainly be possible. Covid has introduced us to our vulnerabilities, and has given us an opportunity to move to a newer and safer normal.

Phadke is a consultant economist; Diwase is commissioner, agriculture, government of Maharashtra