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How Covid-19 has Changed the Rules of the Game for Agri- Sector

Covid-19 has prompted the need for reforms in the agri-sector and digital solutions to link farmers to markets, build wage safety nets, and ensure equitable working conditions at the farm level

The Covid-19 pandemic, right at its onset disrupted supply chains across agriculture and its allied sectors. A similar situation grips India as the country battles with the second wave of the deadly virus. How has the impact been on the agri sector this time around? The nation-wide lockdown last year took a heavy toll on all its financial resources, causing enormous losses to the agriculture sector, an integral part of the Indian economy that reached a valuation of INR 56,564 Billion in 2019.

Undeniably, the impact on horticulture was the highest during the nationwide lockdown as wholesale prices of the produce collapsed in April despite witnessing a sharp reduction in their mandi arrivals. 

However, disruptions led by Covid-19 during the first wave presented an opportunity to improve and change the rules of the industry and to reimagine a resilient systemic recovery strategy that might just rescue the agriculture sector during the second wave.

Covid-19 has prompted the need for reforms in the agri-sector and digital solutions to link farmers to markets, build wage safety nets, and ensure equitable working conditions at the farm level.

For the horticulture industry, an opportunity exists to enhance and strengthen its value chains.

In order to make these value chains more flexible and effective, digital technology, including geo-tagging, digital profiles of farmers, communication, and payments, will play a crucial role. Indian agri-industry is on the brink of a massive transformation. However, more steps are necessary to reboot the industry and ensure it exits the crisis more robust than ever as experts suggest a third and a fourth wave in the waiting.

The crisis accentuates the country’s prospects for strengthening our cold chain infrastructure along with agri-warehousing facilities. The lack of sufficient cold storage facilities in India forces farmers to sell their perishable horticultural products at rates that are typically sub-standard. Decentralized cold storage infrastructure is the need of the hour to bring down the losses.

A network of cold storage facilities across rural and urban India can allow farmers to store their horticultural produce for longer durations until market prices become suitable. Such facilities can even operate on alternative energy sources like solar energy. As this area is still germinating, it has huge potentials for growth, given the large share of horticultural produce it can cater to. A mix of government and private partnership can further boost its pace of implementation.

In terms of the consumer, a significant impact of the pandemic has been that it has imprinted mass consciousness for hygiene and safety. People have become increasingly conscious of their health and the safety of the food they consume. There has also been a significant shift in the buying habits as consumers became wary of stepping out of their homes for in-store purchases produce during the pandemic, and instead rely on e-commerce to have it delivered at their convenience.3 These trends opened up new

segments and created opportunities for business expansion for agriculture and horticulture companies beyond their traditional routes.

Subsequently, ‘Ag-tech’ solutions that offer quality and safety have gained significant attention. Companies are shifting focus from aspects such as trade traceability to consumer traceability, providing a transparent mechanism to track the journey of the produce from farm to fork. This has been further enhanced through tech-enabled solutions such as QR Code-based stickers for individual fruits, the latest consumer-centric innovation adopted by the horticulture industry.

Consumers today can have access to real-time insights like where and who has grown the fruit, simply by scanning the dynamic QR code and are willing to pay a premium to be able to do so. Even packaging is no longer just about looking good but is also about how it can retain the best quality of food. As companies continue to shift towards a ‘Direct to Consumer’ model, the emphasis is largely on providing the best ‘experience’ to the consumer, without compromising on the quality.

Covid-19 pointed out the need to incorporate policy frameworks that can sustain and uphold a resilient supply chain. Indian government’s recent agri-reforms are expected to deregulate the market, a move that shall encourage greater competition and introduce the best global agri practices. Keeping supply chains functioning well is crucial to ensure food security. It is crucial for farmers to have continuous access to markets, be it through private or government procurement mechanisms. The reforms are foreseen to revamp the Indian agri-food sector and empower farmers.

However, the above changes could materialize only if the health of the farmers is looked well after. The role of agri companies attains a wider connotation as they could help in ensuring that the farmers and the workers associated with them are vaccinated. Emphasis should also be placed upon the safety protocols at farms, citing the fact that the rural hinterlands have witnessed a spike in infection rates.

As the lockdown continues to unfold across the country, horticulture is emerging as a thriving sector. Despite the challenges posed by the pandemic, the impact of this global crisis can be mitigated. The present Covid-19 scenario is a fertile pivotal point to transition from conventional agri-business models to innovative advanced tech-based models.

The future of farming will reconcile with domains that were earlier not associated with agriculture. The digitization of databases, real-time monitoring of the distribution supply chain, and logistical traceability will shape our agronomy while adding value to the commodity and produce.

As the pandemic continues to unfold, it is difficult to predict how long this ordeal will last, and to what extent its impact could be. Therefore, the sector will need to rethink and continue to adapt towards resilient, sustainable and ‘game-changing’ agri-models to widen the horizons for the industry. It will also determine how well we cope with the ramifications of the pandemic in the coming days, weeks, and months to come.

Source: Business World

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