ICC applauds the great proactive steps taken by the Government to protect India from the impact of Covid19. The announcements by the Honourable Finance Minister with regard to extended time for compliances and to provide the food security to the needy, are very timely and speed at which these developments are unfolding are simply inspiring.
One of the biggest challenges in the times to come will be of adequate food supplies and the well being of our people, ICC press release stated. Also with 69% of our country’s population being engaged in agriculture, there well being depends on the viable farming.
- Impact on and measures needed towards harvesting and storage of Rabi Crop: The national lockdown has led to market closures and lack of transportation facilities. Farmers will be unable to send and sell their produce at the mandis and food processing centers. Both farmers and traders are uncertain about the status of the government procurement operations for the upcoming season. ICC recommend the setting up of a taskforce which implements the APMC Act under government supervision and regulated trade takes place so that essential commodities are supplied at the right time at right price and hoarding and food inflation can be avoided. As we all know, the supply of rice/wheat under Pradhan Mantri Gareeb Kalyan Anna Yojana would not be possible without adequate supplies of Agri produce. The supply and transportation of fruits and vegetables to the relevant markets needs to be exempted from the lockdown. ICC calls for a coordinated approach to help the agricultural community.
- Impact and measures needed to support the Kharif crop: In the context of the forthcoming Kharif crop, farmers will very critically require all the farm inputs timely. ICC has suggested all States should classify all Agri Inputs such as seeds, micro irrigation, farm equipments (Tractors, Combined Harvester, etc.), fertilizers and crop protection chemicals as exempt from lockdown for manufacture and transportation of essential food crops. ICC also recommended that Central and State Governments should also keep Agri inputs and seeds in essential category to ensure food security. Warehouses storing Agri inputs and agriculture produce should be given a greensticker for identification and should be allowed to operate without any hindrance. Any restriction may affect the availability of Agri inputs and seeds particularly. The industry should be encouraged to take all precautions, to prevent any spread of Covid-19 infections.
- Livestock Industry: Over 2 crore people depend upon livestock for their livelihood which contributes Rs. 1800 billion to Indian GDP. Livestock is also giving direct benefit to more than One Crore Maize and Soya agriculture farmers and providing market for soybean and maize farmers in India. The livestock sector contributes 4.11% GDP and 25.6% of total Agriculture GDP. Due to the recent outbreak of Coronavirus, the demand for chicken products has fallen, resulting into Poultry Birds being sold at around Rs. 30/- per Kg at the farm gate level. The cost of production of the poultry in India is~Rs.80 per kg. But it may be noted that at urban markets chicken is sold at Rs. 180/kg, meaning the supply chain needs to be streamlined to minimize the price discrepancy. Poultry demand slowdown will affect demand for commodities such as maize, soymeal, oilcakes. A
- Impact and Measures for Cash flow and Payments from the Government: The industry is expected to face existential crisis in meeting fixed costs, debts and other obligations. ICC would like to appeal to Government to help by insisting all State Governments to immediately release all dues to companies. Alternatively, ICC would suggest if it is possible to release these dues by the Government of India.
- Continuity of the welfare/subsidy programs during the COVID19 lockdown period: Each year, with the beginning of the financial year, the states roll out the programs based on the Ministry of Agriculture and Farmers Welfare (MoAFW) approval of the Annual Action Plan (AAP) from the state. Our request is that in the interest of continued progress of this life changing and flagship program, the states should be advised that all their programs be continued seamlessly from April itself given the needs for Kharif crops.
Impact on Indian Food Processing Sector
The government notification states that food processing is considered as an Essential sector and therefore is exempted from the ambit of Lockdown, but in some Districts, local administration is not allowing the food processing units to continue their operations. The labour engaged by the processing units, the exporters themselves and their minimal staff are facing hindrances in operating, movement and due to which entire operations have come to a grinding halt. It has also been noted that exporters are finding it difficult to move their cargo to the Indian ports and has been observed that manufacturer-exporters are forced to close down their processing units by local authorities.
Food processing manufacturers are facing huge shortages of raw materials due to supply chain disorder and are finding it difficult to deliver finished products to the retail stores due to the restricted movement of trucks and interstate transportation. It is suggested that Government should lay special emphasis to ensure inter-state movement of raw materials for the food processing industry during the three-week lockdown, and can issue necessary permits immediately to all people who are part of the food industry supply chain. ICC also recommends that the international courier agencies should be permitted to operate with minimal staff to deliver shipping documents to the buyers abiding by the norms to prevent any kind of contamination. This would help exporters in a big way.
Given the current situation, business should have an option to contribute above the 2 percent of CSR mandatory cap to deal with the current situation. This would certainly help the country during the crisis period. However, the above 2 percent should be adjusted later against the future CSR liabilities. The same ‘additional amount’ (over and above 2 percent) can be reduced from 2 percent of the future fiscal years. Since the need to spend these funds is now. ICC suggests that a 90 days tax holiday should be provided to all working in the agriculture and food processing sector so as to help the same cope up with the crisis financially.
The food processing industry has to procure raw materials from the farmers, however liquidity crunch during the sudden lock down period is impeding the process. A special fund creation by NABARD for this crisis period can immensely help both the industry as well as the farmers in seamless procurement of raw materials by the food processing units while also ensuring that farmers get the right price for their produce.
ICC suggests practicing one standard operating procedure by local law enforcement agencies in every state to avoid any misinterpretation leading to any kind of misunderstanding of the process. In order to make consumer items available in the market, all food processing companies should be allowed to keep their manufacturing facilities open under the safety guidelines and the central government to suitably inform the state authorities not to call for closure of food processing units as it is necessary to maintain uninterrupted supply of food items to the people of the country without any gap between demand and supply.
ICC strongly requests the intervention of Ministry of Health & Family Welfare in association with the Ministry of Food Processing Industries and FSSAI must keep an eye out on the situation in order to successfully gather evidences from global agencies and scientific groups of any such transmission of COVID 19 resulting from food items and the government should also issue a directive that may clearly specify that packaged food companies are exempted from the lock down so that trucks and distribution can operate.
There should be seamless flow of agricultural produce to the Food Parks and the various Food Processing Sectors across the country. The national lock down is hampering the flow of goods to the processing centers and subsequent production and sales of processed food. This should be included under the ambit of Essential Services Maintenance Act which has been invoked.
