COVID-19 Outbreak: Rural India stares at a larger crisis

India’s hinterland is suffering silently. Coronavirus may have spared it thus far but the sudden loss of income triggered by job losses of those who migrated to cities, is taking its toll. Those who chose to stay back in the countryside and are earning their livelihoods through agriculture, are forced to feed their produce, especially the perishables, to the cattle as the lockdown has halted their fruits and vegetables from reaching the urban markets.

In Karnataka, tonnes of grapes have found their way to compost pits amounting to hundreds of crores of rupees. But that is not all. If stay-home orders are prolonged, the farmers in the villages will be staring at bigger economic losses, as early as next week. What was seen as only the problem of supply so far, could turn into a shortage of production. That should be an alarm bell for the government.

Come next week, the harvest season will begin for India’s most staple wheat crop. In all probability, shortage of hands for harvesting wheat could lead to rotting of the crop in the fields. Labour and logistics problems have already led to a halt in rice exports from India, the world’s top rice exporter. The Indian Council of Agricultural Research (ICAR) has urged wheat farmers to postpone their harvest to April 20 in the wake of the virus outbreak. But beyond that, it may not be possible to stop them without any adverse impact on their crop. Keeping in mind the harvesting and sowing seasons, the Centre late last month, had put farmers, farm workers, procurement agencies and packaging units of fertilisers, pesticides and seeds under exempt category.

“This will be crucial for keeping the supply chain of foodgrains alive,” said an official. But many states, until Friday, had not allowed exemptions to farmers. It does come with potential health risk to labourers working in close proximity in the fields during the harvest time.

The problem is not peculiar to India, governments around the globe have put their people on lockdown to flatten the virus curve but it has slowed global food supply chains. In France, acute shortage of seasonal labour to harvest crops has prompted the government call unemployed to help farmers. In the US, the virus has sent farm workers, half of whom are undocumented migrant labourers, uncovered by $2 trillion stimulus, into panic.

India, the globe’s second most populous country, too faces a somewhat similar situation. A large number of internal migrants lend helping hand during harvest and planting seasons. Lakhs of them head home from their places of work during this time too to their remote villages of Uttar Pradesh, Punjab, Madhya Pradesh and Haryana, the major wheat producing states. But this year is different. They have been held up where they work or have travelled halfway home but have been debarred from crossing their village boundaries.

Bhola, a migrant labourer, who for some reason stayed back at Ballia in Uttar Pradesh this winter, says his hands are full this year. Wheat farm owners are ready to pay four times more wages. There is an acute shortage of farm labourers in India’s largest wheat producing state, which accounts for over 35% of total wheat produced in the country.

“We are eagerly waiting for the lockdown to lift. I heard on TV channels the lockdown may lift around April 15. Our families will die of hunger, if we don’t return to our fields for wheat and mustard harvest. We not only earn wages but also a share of crop that takes care of our grain requirements for a large part of the year,” Harvinder Singh of Punjab, who worked as a daily wage earner at construction sites in Delhi, says.

The government has so far given a welfare relief of only Rs 1.7 lakh crore, which is just about 1.2% of GDP and that too largely for formal sector workers. The informal sector, which constitutes about 80% of the country’s workforce, is yet to get any relief. These are self-employed, daily wage earners, migrant labourers, rag pickers, street vendors and those working in small and micro units sprawling across the cities.

Top officials have been engaged in a second stimulus package, which could be bigger than the one announced on March 26. But economists and former policymakers have been suggesting for a far bigger package of Rs 6-8 lakh crore more, which should soon be deployed to the most-needy informal workers, failing which they may soon hit the streets as their bigger problem would be that of hunger.

According to Nobel laureate Esther Duflo, any delay by the government in reaching out to them with cash or food grains could force them to defy the lockdown norms that could be difficult even for the police to control.

According to the Modi government’s first Chief Economic Advisor Arvind Subramanian, it is an unconventional economic crisis and much larger in dimension than the past economic crises. It has hit the poor below their belt. The government should immediately help them and keep the cash taps running without giving much thought to the issues like pilferage at the moment.

“The government must not care too much on how to bring up the economy but how to cushion those who are the worst affected,” Subramanian last week told a TV channel.

The relentless rise in the cases of coronavirus each day does not suggest India will lift the lockdown fully anytime soon. If the stay-home norms continue, the government may need to keep feeding the poor for longer than expected.

Does the government have the wherewithal to feed more than a quarter of its 1.3 billion people, living below the poverty line? An analysis by The Economist shows that while lockdown in emerging countries including India, has matched the first world nations, their fiscal stimulus has not.