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Covid-19 fallout

Integrated agricultural supply chain must to cushion economy

Dr Nazneen Ahmed
26 Apr 2020 16:42:58 | Update: 26 Apr 2020 16:42:58
Integrated agricultural supply chain must to cushion economy
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The agricultural sector, like other sectors of the economy, is in crisis due to the impact of coronavirus. Although the contribution of this sector to the GDP is about 14 percent, the sector employs 40 percent of the people of Bangladesh. 

At present most industries of the country are not functioning, wholesale and retail markets are closed, trade and commerce stumble, export-import and industries as well as service sectors, are stagnant. Thus, the importance of the agriculture sector has increased.

We are dependent on agricultural products to provide food security to hundred thousands of the poor, jobless, day-labours, street vendors and the low-income groups who are now unemployed due to this global pandemic. If the agriculture sector is kept afloat, the pace of employment of 40 percent of the people can be maintained fairly.

This leads to the most urgent need - an integrated plan to hold all types of agricultural supplies in order. Our farm production also includes fisheries and animal husbandry along with grain and cereal farming. Right now all sub-sectors of agriculture are dogged by the crisis. It has become urgent to harvest Boro paddy, which is our main cereal crop.

If this crop does not see bumper production, food crisis may loom in the country. About 34 million metric tonnes of rice every year, of which almost 71 percent comes from Boro paddy, which is harvested in two seasons in the months of Baishakh and Jaisthya. Agricultural labourers from all over the country go to the areas that are facing labour shortage. Abundant paddy growers during the harvest season to reap the crop.

This paves the way for seasonal agricultural labours to augment their income and producers harvest paddy in time. The government has already promised to provide transport facilities for workers from different areas to go to paddy producing areas, that requires more manpower and take part in harvesting activities. People are urged through megaphones to take part in the activity, but with caution, thus avoiding health risks. Government should take care of the vehicles used for transportation of the crop and reapers.

It would be advisable to transport workers by train to avoid health risks, where appropriate. Buses may be used from train stations to farmlands, with precaution by including adequate disinfecting equipment. Non-resident workers too have to be accommodated. Cyclone shelters in different areas, large school buildings can be used, of course, ensuring social distancing.

The demand for labour in the required area should be measured quickly by upazila agriculture offices and preparations made accordingly. Since every year workers from different areas go to the rice-producing but shortage of manpower areas, these workers have connections with many, and bringing in so many from far off places may not be required. Reaping is not the final task in the production process; harvested paddy should be sent to the rice mill gate for threshing. These activities need intense coordination.

Rice millers or their agents’ movement should be allowed so that they can collect the paddy to be husked and packaged. The final task involves the rice from the production area to reach various wholesale markets across the country. This whole supply chain demands the involvement of people at various levels, such as auto-rice mills that need many agricultural labour hands. Therefore their movement should also be permitted. Urgent decisions, directions and co-operation are needed on how to process paddy and rice in compliance with the government lockdown rules. Guidance on how to make this whole supply chain healthy should come from the Department of Agriculture Extension (DAE) offices. DAE and owners of auto-rice mills should plan to accommodate all other stakeholders to handle the whole process of the supply chain of rice in compliance with hygiene and social safety policies set out by the government. 

Strict monitoring should be in place so that farmers get a fair price for Boro paddy. This year the government should collect more paddy and rice than other years, as it may have to continue feeding many poor people for a long time if food insecurity amidst coronavirus situation is prolonged. The government has announced an incentive fund of Tk5,000 crore for the agricultural sector. This money should be used for refinancing of farm capital through a scheme.

Small and medium farmers will get loans at four percent interest from this package. This fund should be released not for production of pulse or other seed crops but fruits, flower cultivation, poultry, dairy farm, animal and fish farming as working capital. The target farms are really important in this critical time to keep the supply chain of food active. One-day old chickens could not be sold by chicken farms while layer-farmers are struggling with their produced eggs.

Farmers are suffering to sell their products while consumers are struggling to buy them. Babies are crying for milk while dairy farmers are draining down their surplus milk. This is the failure of the supply chain management which could have been active complying with the health guidelines during the coronavirus pandemic.

It is now necessary to take up regional plans on an emergency basis to provide transportation facilities for different types of agricultural products, ensuring that health risks are avoided when transporting goods from one manufacturing area to another.   A special identity card to such transport workers should be provided to avoid harassment during these deliveries.

The government incentive, aimed at instituting working capital for farmers, will support agriculture only when the farmers see the possibility of running the business profitably. At this moment, the agricultural sector needs the transportation of their goods to be ensured and a healthy supply of farm products to markets and consumers. The producers will only risk procuring loans for poultry or fish farms if there is a system of sales in the market which has the assurance of a mode of repayment.

This leaves us with first and foremost ensuring the supply chain of the product. In a few days, it will be time to harvest various seasonal fruits. Mango, litchi and jackfruit are main crops grown in summer, and many people have invested in them and the required labour while having engaged themselves already in the production and supply of all these fruit products.

Many people make a living from marketing seasonal fruits. Well laid out plans are needed now to make the supply and marketing of mangoes stronger to cut down the losses of thousands of people who have invested in mango production. The economic downturn, caused by COVID-19, has taken its toll on the country's poorest.  The lower-middle-class are gradually feeling the pinch.

In a stagnant economy with no jobs, the most important thing is to keep agriculture alive to end the looming food crisis that may invite famine. Apart from harvesting Boro, pulses, vegetables the government should make the agricultural inputs available at hand for farmers so that they can buy quality seeds and subsidised fertiliser at low prices, and avail low-cost irrigation in time.

The problem with harvesting Boro paddy surfaced recently as there was no prior preparation. A plan to avoid similar mismanagement in the future must be drawn as none of us want the virus to protract the impact. It will take time for the country's industrial and service sectors to return to normalcy. But it will be difficult to prevent famine in the country if we cannot provide food security to the economically drained people by keeping agriculture vibrant.

And by keeping this agriculture sector alive, employment of 40 percent of the people in the country will be maintained and it will cushion the economy against recession. Therefore, an urgent plan is immediately needed to keep the agricultural supply chain in order and to ensure the supply of inputs for crop growers in future. It will also be necessary to keep the supply system afloat for agro-based small cottage industries.

Vibrant cottage industries including flattened rice, puffed rice, mustard oil, or dried fish, dairy products etc will create jobs and soften the impact of lockdown on the economy. Precisely speaking, a healthy agricultural supply chain is a must to cushion the impact of coronavirus.

The writer is an Economist and Senior Research Fellow, Bangladesh Institute of Development Studies.

Dr Nazneen Ahmed Dr Nazneen Ahmed
Economist and Senior Research Fellow, Bangladesh Institute of Development Studies