Parth M.N.

 

Even though the supply chain of groceries was part of the essential services, reports of continuous police disruptions came in for at least the first 20 days of the lockdown. Trucks carrying vegetables weren’t allowed to move freely, while labourers were beaten up for “violating lockdown”.

 

For the first three weeks of the lockdown, Ajit Navale’s phone continued to ring incessantly. A farm activist in Maharashtra’s Ahmednagar district, Navale told me he spent days fielding identical phone calls. “It either pertained to farmers not being able to transport their harvest, or it was about police roughing up labourers on their way to farmlands,” he said. “Without labourers, farmers can’t harvest their crop. And without transportation, they can’t sell what they have harvested.”

After speaking to Navale, I spoke to several other farm activists in different parts of Maharashtra. They too shared identical testimonies during the initial period of the lockdown.

When chief minister Uddhav Thackeray announced a lockdown on March 22 to contain the spread of coronavirus, he was fairly clear about what was allowed and what wasn’t. Except the police force on the ground took a while to figure it out. Even though the supply chain of groceries was part of the essential services, reports of continuous police disruptions came in for at least the first 20 days of the lockdown. Trucks carrying vegetables weren’t allowed to move freely, while labourers were beaten up for “violating lockdown”.

Only 20 days? Turns out it is a long time.

The lockdown came in at a time when farmers in Maharashtra harvest their winter crops, mainly fruits and vegetables. Once harvested, they have to be sold quickly because they are perishable goods. The delay in ironing out the disrupted transport ensured farmers saw their vegetable harvest deteriorate in front of their eyes. A farmer from Jalgaon who had harvested his sweet corn crop lost about Rs 2 lakh, only because he could not take his stock to the mandi.

 

But when Manik Dhakne sold his harvest of Okra in May this year, the term distress sale acquired a new meaning. After investing Rs. 40,000 behind his two-acres of crop, he eventually sold it for Rs. 3000. ….  When Dhakne harvested his crop in mid-April, everything was at a standstill. The prices had collapsed like never before.


The repercussions were felt in the cities too. From farms to our plates, the vegetable exchanges hands at least four to five times. With the entire supply chain ruptured, residents in urban centres experienced a shortfall of veggies until mid-April or so. Vashi's APMC, from where Mumbai gets its fruits and vegetables, had its stock down to 15 to 20% of what it used to be.

According to a Financial Times report from May, farmers across India lost Rs. 20,000 crore due to “transport gridlock and labour paucity”. These losses do not include the distress sales that farmers indulged in to be able to get rid of whatever they were in possession of.

Lakhs of cotton farmers in Maharashtra sold their harvest to middlemen because procurement by state agencies had been stalled after the lockdown. When the government rate for cotton stood at around Rs. 5000 per quintal, farmers sold off their cotton at Rs 2000.

But when Manik Dhakne sold his harvest of Okra in May this year, the term distress sale acquired a new meaning. After investing Rs. 40,000 behind his two-acres of crop, he eventually sold it for Rs. 3000. In Maharashtra’s agrarian region of Marathwada, Dhakne had planted Okra as his summer crop in March. The timing couldn't have been worse. When Dhakne harvested his crop in mid-April, everything was at a standstill. The prices had collapsed like never before.

The dairy farmers had a similar experience. Post lockdown, with hotels and restaurants shut, the requirement for milk decreased drastically. Nobody was making ice-creams, chocolates, paneer and many more items for which milk is procured as raw material. Immediately after lockdown, the cow milk that the dairy farmers sold for Rs 30 per litre dwindled to Rs 17 per litre. Just over half of what they used to make. That led to massive agitations across Maharashtra where farmers erupted in anger, and spilled over their milk in streets in protests. As a side note, it is important to point out that we in cities continued to pay Rs 48 per litre even though the farmers had been selling their milk at half the price.

It has been over six months since the lockdown but farmers’ woes don’t seem to end. The debacle of winter crops has spilled over into the monsoon season.

Normally, the money that farmers make from winter crops is used for the preparation and investment ahead of the major Kharif season that begins in June. As the season progresses, crop loans from financial institutions come in to take farmers through the rest of the season. It is a critical part of the agriculture credit that the state extends to its farmers.

With farmers incurring devastating losses from the winter crops, timely access to crop loans became more important than ever before. "Timely" being the crucial word.

Farming is a time-bound profession. Crops have to be sowed around the arrival of monsoons; otherwise the entire season goes down the drain. Therefore, access to credit is critical before the monsoon season begins. Or, as a farmer had once explained to me, “A bottle of water when a man is dehydrated is more important than a tanker when he is dead.”

Unfortunately, that is exactly what has happened in Maharashtra.

According to the data from the State Level Bankers Committee (SLBC), an inter-institutional forum that includes state and central government officials, the crop loan disbursement in Maharashtra stood at Rs 29,511 crore. But the targeted disbursement for the 2020 kharif season was Rs 45,785 crore. The state only met 64% of the target. 

In the worst hit agrarian regions of Marathwada and Vidarbha, the disbursement stood even lower at 53% and 61%, respectively. Against the targeted disbursement of Rs 11,992 crore in Marathwada, banks have only disbursed Rs 6,342 crore (53%). Among Vidarbha’s farmers, where the targeted crop loan disbursement was Rs 12,928 crore, banks have given out Rs 7,897 crore.

The disbursement of crop loans is closely linked with the farm loan waiver scheme being implemented in the state. The bank receives a list of farmers that are eligible for the loan waiver, and bankers proceed to clear their accounts. Until farm accounts show non-performing assets, bankers cannot issue fresh crop loans. But the pandemic put a stop to the implementation  of the loan waiver.

On May 22, the state government issued a circular, pointing out it has reached out to 1.9 million farmers but “the revenue of the state has dried up due to the pandemic”. “Therefore, it would not be immediately possible to release the remaining money for the loan waiver,” said the circular. “However, the farmers that are eligible for a loan waiver but have not received it yet should be extended crop loans. The banks should mark their amount as 'to be received from the state government'."

The circular fell on deaf ears. And the state government did not push it either.

The commercial banks that do the bulk of crop loan disbursement are not answerable to the state. They come under the purview of the RBI, which is an autonomous institution. So the disbursement of crop loans did not meet its target, while the state government looked on.

With the lack of institutional credit, farmers have had to knock on the doors of private moneylenders. They do not ask for any paper or assurance from farmers. But they charge exorbitant interest rates – anywhere between 3 to 7% a month. In other words, an interest of 36 to 84% over the principal amount. With that kind of interest rates, even a supposedly manageable amount ends up digging farmers’ grave.

 

Lockdown induced agrarian distress has worsened child nutrition in the Adivasi dominated district of Palghar in Maharrashtra.

The pandemic-induced lockdown has only perpetuated the divide between rich and poor. With no safety net, farmers have been driven deeper into debt. How difficult their survival is depends on where they stand along the socio-economic divide.

The worst affected are the Adivasi farmers from Palghar that cultivate rice every kharif season. Many of them also work as migrant workers in Mumbai and Thane. When I visited Palghar in August, I found they were struggling to feed their kids. In fact, malnutrition in Palghar has worsened in the district post lockdown.

In April 2020, 2,186 children in Palghar fell under the moderate acute malnutrition (MAM) category. In June 2020, that number marginally went up to 2,225.

At least, 213 children from Palghar were listed under the severe acute malnutrition (SAM) category in April 2020, which, in just two months, has gone up to 234.

In the long run, the declining purchasing power of farmers means many more of them would have to come to cities to make their ends meet. Plus, they would be able to employ agriculture labourers even less than what they used to. Net result would be even more intense migration towards cities. For now, I would refrain from reminding you what that ends up like. Public memory is not that short. Or at least I hope it isn't.

 

Parth M.N. is principal correspondent at IndiaSpend. He is  a recipient of Ramnath Goenka Award and European Commission's Lorenzo Natali Media Prize.