Agriculture Market

Impact of Covid-19 on Indian Agriculture Market

Covid-19, originated in China, has spread across the world in the form of a pandemic. This pandemic has affected many lives around the world. The Indian Government declared a nation-wide lockdown in the country on 25th March, initially for 21 days and gradually extending the number of days to control the spread of the disease. The lockdown restrictions were very strict during the initial phase which affected the various sectors of the economy including the agriculture sector. As the Import and Export practices halted, both the supply and demand got affected which had a great impact on Price and distribution. However, agriculture sector still maintained to be the brightest spot in the economy as compared to the other sector.

Major Issues

  • In the initial stages of the lockdown in March, the restrictions coincided with the farming practices as March-April is the peak season of sowing of Kharif crops like paddy and harvesting of Rabi crops like wheat, this created a lot of problems for the farmers.
  • There arose a shortage of labor as the workers started to return to their towns due to the panic caused by the pandemic.
  • As the transportation halted, the concern arose on how the produce from the fields will reach the markets.
  • Hence, the markets fell short of supply.
  • The Prices gradually rose as the supply declined.

Impact on Production, Consumption and Marketing

Food Market was entirely disrupted after during COVID-19 alarm. The lockdown followed by the income shocks which resulted in the altered consumer behaviors. As the concerns of health issues hiked, people cut off their demands of non essential foods and started prioritizing the essential food items.

The limited resources and the lower consumer demand further caused the decline in the agriculture production. The availability of farm inputs such as seeds, machines, fertilizers etc. was insufficient and hence the adequate amount of output became difficult to generate.

The food system is not just about the production but also includes the supply of the products to the consumers. During the lockdown, as the transportation activities were terminated, the issue of supply and the marketing of the produce came up.


During Lockdown

  • Wheat – The prices for wheat were significantly stable in the month of April. But during unlock-1 in June, there was a decline in prices in the markets where COVID cases were high. Through the Pradhan Mantri Garib Kalyan Yojana, the Government decided to provide 5 kg free ration per individual by drawing down on public stocks beginning in April. This caused a negative effect of the Wheat demand.
  • Tomato – The prices remained same during the initial period of the lockdown, however, the prices declined in May.
  • Onion – The impact on onion was negligible.

Post Lockdown

  • Pulses, wheat flour and milk – In a month post the lockdown, the prices rose by 1-5%.
  • Edible oils and staple cereals (rice and wheat) – For these commodities, prices went 4–9% lower as the import restrictions were withdrawn and the government interruptions like free distribution of food grains initiated.
  • Vegetable – The tomato prices hiked by 77–78% in a week after a month of unlocking lockdown.

Government Policies to support the situation

  • The Reserve Bank of India (RBI) issued that Agriculture terms and Crop loans have granted a moratorium of 3 months addressing the “burden of debt servicing”.
  • As the lockdown initiated, the Indian Finance Minister of India declared an INR 1.7 trillion package to protect the economically weaker section from the COVID-19 impact. The government also transferred an advance release of INR 6000 to the bank account of the farmers in 3 equal installments for 3 months under the PM-KISAN scheme.
  • The Indian Council of Agricultural Research (ICAR) announced some guidelines for the farmers mentioning the practices of sowing, harvesting, post-harvesting, storage and marketing of Rabi crops.
  • To empower income to the rural people, Pradhan Mantri Garib Kalyan Yojana was announced in June 2020.

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