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AGRI May 2020 Englsih.Cdr FOR PRIVATE CIRCULATION ONLY A BI-MONTHLY PUBLICATION EXPORT-IMPORT BANK OF INDIA MAY 2020 Visit us at www.eximbankindia.in VOL XXIV ISSUE III C O N T E N T S Impact of COVID 19 on Indian Agriculture Impact of COVID 19 on The COVID-19 pandemic represents an Corporation of India (FCI) was estimated Indian Agriculture .......... 1 unprecedented disruption to the global at 56.9 million metric tonnes (MMT) economy and world trade, as production during April 2020, apart from the 25.2 Natural Rubber and consumption are scaled back across MMT of unmilled paddy. The stock of the Industry in India ............ 3 the globe. The effect of COVID 19 can be same increased to 64.3 MMT during May seen on almost every industry and the 2020. This quantity is more than three Plasticulture .................. 6 expected global growth rate is brought times the specified minimum operational down by different rating agencies. 3 Global buffer-cum-strategic stock of 21.04 MMT proposed for 1st April. The situation of Dairy Industry ................ 9 Where most of the sectors are impacted stock is easing further with arrival of the heavily, the impact on the agriculture rabi wheat harvest, which can be seen in News Focus .................. 12 sector is deemed as limited. However, the the increase of stock with FCI. Similarly, effects of the pandemic on the sector for pulses, the National Agricultural have been varied. That’s because Cooperative Marketing Federation of agriculture and allied activities is not a India (NAFED) is reported to have stocks homogeneous group, but an umbrella of of 2.25 MMT as on March 19, 2020. Here activities, each having its own set of again, the inflow of rabi pulses into the dynamics. The overall agriculture sector is market in April 2020 is expected to ease expected to witness a growth rate of the situation further. around 2.5% during the current fiscal year (2020-21)1. As per the first advanced The challenges for the sector due to the estimate2, the production of food grains pandemic and subsequent economic in India is projected to reach a figure of closure has been largely around the post- 291.1 million tonnes in 2019-20, an production activities due to shortage of increase of 6.15 million tonnes over the farm labour for harvesting, and lack of figure mentioned in the fourth advanced transportation facilities for collection of estimate for 2018-19. As the timing of harvest by the private traders and pandemic collides with the timing of government agencies. The first two harvesting of the Rabi crops, the effect on we e ks o f A p r i l 2 0 2 0 , s i n c e t h e the production of food grains is limited. announcement of a country-wide The stock of wheat and rice with Food lockdown, witnessed a sharp decline in 1CRISIL Research 2Ministry of Agriculture and Farmers Welfare 3Food Corporation of India the arrivals of agricultural commodities in the lockdown. The demand for floriculture products mandis. The arrival of Rabi crop during the above came at a complete standstill and the export were mentioned period fell by 98% as compared to the also severely impacted leading to the businesses same period previous year. Arrival of paddy and involved facing significant losses. grains fell by 68%, pulses and oilseeds by 93%, fibre Amidst the adversities, the lockdown has also crops by 99%, fruits by 85% and vegetables by 75%4. brought about some positive developments in the With easing of lockdown norms and availability of sector, such as increased focus on digitisation in transport, the situation improved considerably. agriculture. The movement restrictions during the The Mandi prices for vegetables increased by 83% Y- lockdown saw a considerable expansion of the 0-Y, during April 1- April 12, as the arrival plunged eNAM facility or electronic National Agriculture sharply, however, middlemen estimated to be Market, a digital initiative by the Government of India, envisaged to bring in significant efficiencies in procuring at much lower prices from farmers given the buying selling of food grains, reducing the their limited bargaining power due to perishable regional inflation differences and also ease the nature of commodities. The prices of poultry burden of procurement on the exchequer. The share products were affected, even before the of eNAM in total food grain procurement was announcement of the lockdown, due to the spread estimated at 14.4% during 2018-19. The opening up of misinformation of poultry being the potential of agricultural marketing and increased e-retailing carrier of COVID 19. Sales of poultry meat went have also benefitted the Agri-Tech Startups involved down by almost 80%, and prices for poultry meat in supply chain innovations to flourish while were halved. The exports of meat, dairy and poultry allowing the farmers to explore other pricing products also took a hit as the export during April- options for their produce, rather than selling only to May 2020 fell by 54.6% Y-o-Y as compared to April- the APMCs. May 20195. Share of eNAM in Total Food Grain Procurement Despite being deemed as an essential commodity, the demand for dairy products witnessed a decline, which witnessed a surge at the announcement of the lockdown largely due to panic buying. The subsequent decline in demand in dairy products was primarily due to the closure of restaurants and other food services. The drop in demand was to the extent of 20-25%6 as compared to the previous year. Source: Ministry of Agriculture; Acuite Knowledge Center Consequently, around 560 lakh litre per day (LLPD) of milk was procured by cooperatives against a daily The Government of India has announced a gamut of sale of 360 LLPD to support the farmers. economic packages for addressing the disruptions of COVID 19 on the sector. The key measures for Other sector which was impacted by the COVID 19 agriculture sector and farmers include: driven economic closure, was the Floriculture sector. Flowers are primarily used during the • Advance release of ₹2000 to bank accounts of occasions of wedding and other religious farmers as income support under PM-KISAN ceremonies, which were largely impacted by the scheme. 4CRISIL Research 5Ministry of Commerce and Industry 6Government of India 2 • Increase of minimum wage rate under MGNREGA • A credit boost of ₹2,00,000 crore to 2.5 crore to ₹202 from the earlier minimum wage of ₹182. farmers under Kisan Credit Card Scheme, where fisherman and animal husbandry farmers will also • Creation of financing facility of ₹1,00,000 crore be included. for funding Agriculture Infrastructure Projects at farm-gate and aggregation points, which will • An amount of ₹20,000 crores for Fishermen include primary agricultural co-operative through Pradhan Mantri Matsya Sampada Yojana societies, farmer producer organizations, (PMMSY). agricultural entrepreneurs and start-ups. References: • Creation of PM Garib Kalyan Ann Yojana â Ministry of Commerce (PMGKAY), a total of 12.1 MMT of food grains are â CRISIL Research being supplied to 81 crore people in 3 months at â Food Corporation of India 5 Kg per person. Natural Rubber Industry in India 3 Production and Yield of Natural Rubber in India onnes) /ha) ield (thousand kg oduction (thousand t Y Pr Source: Rubber Board, Ministry of Commerce and Industry Consumption and Production of Natural Rubber Rubber Area and Tappable Rubber Area (in hectare) in India (thousand tonnes) Source: Rubber Board, Ministry of Commerce and Industry Source: Rubber Board, Ministry of Commerce and Industry 7Ministry of Commerce and Industry 8Ministry of Commerce and Industry 4 Major Import Source for Natural Rubber Others Cote d’Ivoire 3% 6% Singapore 9% Thailand Indonesia 10% 42% Malaysia 11% Import of Natural Rubber Vietnam 19% Total Import - US$ 876.8 Million Source: CMIE Economic Outlook Source: Rubber Board, Ministry of Commerce and Industry Export of Natural Rubber Source: Rubber Board, Ministry of Commerce and Industry 9Rubber Board, Ministry of Commerce and Industry 10CMIE Economic Outlook 5 Plasticulture Introduction marginal farmers in India, and also aligns to the Government of India’s current focus11. Agriculture provides employment opportunities to the largest segment of the population in India. The Applications and Benefits sector provides huge opportunities for growth, both There are various applications of plasticulture in in domestic as well as in the international markets. modern agriculture. Both the quality and The sector, however, has not seen a persistent production of the crops and other farm products period of high growth in the recent years. Indian can be optimized by appropriate use of the agriculture is faced with many challenges, which technology. Some of the major applications of include slow technological interventions, lack of plasticulture includes: modern equipments, inadequate irrigation facilities, and inadequate credit flow among others. The • Water Management – the use of plastic in the dwindling quality and the vagaries of the availability form of lining of canals, ponds and reservoirs with of these resources have been raising concerns on plastic films helps in the management of water the sustainability of agricultural practices. and helps in bringing the efficiency in irrigation. PVC and HDPE pipes are used for water Plasticulture, use of plastic in agricultural practice, is conveyance. a scientific method and a low end, cost efficient • Nursery Management – plastic bags, pots, pro- technology, which has the potential of increasing trays/plug trays, sprayers, hanging baskets, are the efficiency of land use under cultivation as well used to produce quality seeding, grafts and as irrigation facilities. The technology can plants. These applications help in easy handling significantly contribute in increasing overall and transportation. Plastic lined farm ponds, efficiency of the agricultural sector by improving the reservoirs and canals are not only effective in productivity of crop production, optimizing the use harvesting rain water but also provides check of input resources, and reducing cost of production.
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