India's rabi crop withers in the lockdown

by Janaki Samant

The cup of woes runneth over for farmers in the country. First, the standing kharif crop during the 2019-20 season was damaged due to unseasonal and heavy rains during September and October 2019. To make up for these losses, farmers across major rabi growing states increased acreage sharply. Acreage under rabi crop had increased by 9.5 per cent by January 31, 2020. It must have been higher as the rabi sowing season continues till mid or end-February but, the Ministry of Agriculture and Farmers’ Welfare stopped releasing data for progress of rabi sowing after end-January.

Wheat, rice, gram, rapeseed & mustard are some of the major crops sown during the rabi season. Farmers were expecting a bumper harvest of wheat, gram and rice. Advance estimates from the Ministry pegged wheat output at an all-time high of 106.2 million tonnes during 2019-20.

However, the Covid-19 induced nation-wide lockdown announced from March 24, 2020 for 21 days and later extended for another 19 days till May 3 have led to uncertainty regarding harvesting and procurement activities. Rabi harvesting commences in March in Gujarat, Madhya Pradesh, Rajasthan and Maharashtra and in April in Punjab, Haryana and Uttar Pradesh. And the announcement of the lockdown came right in the middle of this rabi harvesting season. The government did exempt farm activities from the lockdown but the shortage of labour and lack of transport facilities is expected to impact the rabi crop adversely.

Wheat is the largest rabi crop accounting for almost half of the rabi area sown. The main producers of wheat are Uttar Pradesh, Punjab, Madhya Pradesh, Haryana and Rajasthan. Uttar Pradesh accounts for around 30 per cent of the total wheat production in the country followed by Punjab and Haryana with an 18-20 per cent share, each. Haryana and Rajasthan, each, account for another 8-10 per cent. The government procures almost its entire stock of wheat from Punjab, Haryana and Madhya Pradesh. However, the country-wide lockdown has thrown into disarray, the harvesting and procurement schedule.

In Punjab, harvesting of wheat is almost entirely mechanised and is done with the help of combine harvesters. Of the 17,000 combine harvesters that are available in the state, as per reports, 25 to 30 per cent are sent to Gujarat, Madhya Pradesh and Rajasthan as harvesting commences in March in these states. These return back to Punjab and Haryana by the first week of April. This time, though, because of the lockdown and subsequent clampdown on transport, most of these combine harvesters were reportedly stuck in these neighbouring states.

Besides lack of machines, harvesting and procurement activities have been hit by lack of sufficient human resources. This is evinced in several media reports.

Punjab is dependent on a million labourers and Haryana on 0.6 million labourers for various harvesting and procurement related activities during the rabi season. Bihar sends 80 per cent of these. They also arrive from Uttar Pradesh, Rajasthan and other states for harvesting and procurement related activities during the rabi harvesting season. Following the announcement of the lockdown, either migrant labourers have returned to their home states or the seasonal labourers were unable to come to Punjab and Haryana, creating a severe shortage of labour.

Haryana faces problems that are similar to those of Punjab. But, Haryana depends upon migrant labour a little more than Punjab.

To overcome the severe labour shortage, Punjab and Haryana governments have reportedly employed locals under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Acreage under wheat in Madhya Pradesh had increased by 33 per cent to 8 million hectares by January 31, 2020 compared to 6 million hectares in the previous rabi season. Madhya Pradesh is done with its wheat harvesting. However, delayed harvesting has led to a fall in yield and further delays in procurement exposes the crop to untimely rains.

Many labourers from Uttar Pradesh generally work in and around Delhi. They usually come back to their villages during the rabi harvesting season. Following the sudden announcement of the lockdown, a large number of these labourers were unable to leave Delhi as all transport activities including trains were suspended. This was expected to hit harvesting activity in Uttar Pradesh. However, as per reports, the return of around 0.5 million migrant labourers in the state has resulted in harvesting of around 77 per cent of the area under wheat.

Of the total wheat procured by the government, around 35-40 per cent is procured from Punjab, 25 per cent from Haryana, around 20 per cent from Madhya Pradesh and another 10-12 per cent from Uttar Pradesh. From the state point of view, more than 85 per cent of the total wheat produced in Haryana is procured, more than 70 per cent of the output in Punjab is procured and over 40 per of the grain produced in Madhya Pradesh is procured. The government has set an ambitious target of procuring 40.7 million tonnes of wheat during 2020-21 rabi marketing season against the procurement of 34.1 million tonnes during the previous year. If procurement is not successfully completed, farm incomes will fall which, in turn could affect kharif harvesting.

Procurement activity normally commences on 1 April every year in these states. However, following the lockdown, procurement was postponed to April 15 in Punjab, Madhya Pradesh and Uttar Pradesh and to April 20 in Haryana. Rajasthan has reportedly delayed its procurement to May 1. Delay in crop harvesting due to postponement of procurement activities can bring down yield as the temperature starts rising.

As per recent reports, procurement activities were slow to pick up with wheat procurement of 5,000 tonnes on April 15, 2020 the first day of procurement compared to 18,000 tonnes procured per day at the beginning of the season last year. Procurement agencies are reportedly expecting an average daily procurement of 20,000-22,000 tonnes instead of the normal 50,000 tonnes.

Besides wheat, rice is also grown during the rabi season. Rabi rice is mainly grown in West Bengal, Telangana, Andhra Pradesh and Assam.

The harvesting time for rabi (boro) rice in West Bengal is between the last week of April and second week of May. Farmers are wary about the availability of labour in the wake of the spread of the Covid-19 disease.

In Telangana, acreage under rice during the rabi season surged by over 60 per cent and the state is expecting a bumper paddy crop. Expecting labour shortage in the state following the lockdown, the government is planning to complete the harvesting of paddy with the help of 14,800 harvesters.

Besides rice and wheat, gram is an important rabi crop. Madhya Pradesh is a major producer of gram accounting for around 40 per cent of the gram production in the country. This year a lot of area under gram was diverted for wheat cultivation in the state. Acreage under gram fell by 20 per cent in Madhya Pradesh. But in Maharashtra and Rajasthan, acreage under gram shot up by 66 per cent and 43 per cent, respectively. As per reports, harvesting of gram has been completed.

With over 40 per cent share in all-India production, Rajasthan is the largest producer of rapeseed & mustard but farmers face a storage shortage. Farmers could not register themselves for the procurement process in the state because the e-governance service platform, E-mitra was suspended during the lockdown.

Besides the shortage of machines and labour, there is also a shortfall in the availability of jute bags required for storage of foodgrain across states. In Rajasthan, the price of gunny bags has more than doubled. In order to increase the supply of gunny bags, the Punjab chief minister had also requested his West Bengal counterpart for continuing with supply of pending gunny bales which the state had ordered and which were stuck because of the lockdown.

State governments have intervened to solve problems of the farm sector.

In Uttar Pradesh, the government has announced doorstep purchase of wheat from farmers. It has also set-up 5,500 purchase centres and started a system of online tokens to prevent crowding at markets.

Punjab also issued coupons to farmers to bring wheat to the mandis. It has increased its purchase centres from 1,840 last year to 3,691. It has also added over 400 rice mills as procurement centres, taking the tally of purchase centres to 4,100. It has assured that all the grain produced in the state will be procured.

In Haryana, wheat procurement centres have been increased from 477 to 2,000.

Madhya Pradesh has increased its wheat procurement centres from 3,500 to 4,000. As per reports, in Madhya Pradesh, SMSes are sent to the 2.1 million registered farmers to inform them of the day when they have to reach the procurement centre. Wheat procurement commenced in 49 of the 52 districts of the state, except in the Covid-19 hit districts of Bhopal, Ujjain and Indore where procurement will commence later.

The Telangana government has decided to temporarily store the harvest in government schools and junior colleges until the stocks are transported. The government has promised to buy paddy from farmers at minimum support price. It has promised that it would buy all the harvested crops from the villages and farmers would not have to venture out to sell their produce. The amount to be paid to the farmers will be deposited directly in the accounts of the farmers.

Andhra Pradesh had started buying paddy directly from farmers at MSP. It opened around 1,280 purchase centres across the state in the first week of April for buying the rabi crop.

Unemployment Rate (30-DAY MVG. AVG.)
Per cent
6.7 -2.4
Consumer Sentiments Index
Base September-December 2015
46.3 -0.4
Consumer Expectations Index
Base September-December 2015
48.7 -0.6
Current Economic Conditions Index
Base September-December 2015
42.5 0.0
Quarterly CapEx Aggregates
(Rs.trillion) Sep 19 Dec 19 Mar 20 Jun 20
New projects 3.25 5.55 3.91 0.68
Completed projects 0.85 1.66 1.73 0.24
Stalled projects 0.41 0.61 0.76 0.11
Revived projects 0.43 0.83 0.42 0.59
Implementation stalled projects 0.91 0.13 9.78 0.08
Updated on: 27 Sep 2020 3:28PM
Quarterly Financials of Listed Companies
(% change) Sep 19 Dec 19 Mar 20 Jun 20
All listed Companies
 Income -2.3 -1.7 -4.9 -28.1
 Expenses -3.1 -2.2 -1.8 -28.4
 Net profit -1.3 -10.8 -47.5 -41.1
 PAT margin (%) 5.3 5.1 2.4 5.3
 Count of Cos. 4,452 4,431 4,247 4,117
Non-financial Companies
 Income -6.3 -5.5 -8.9 -38.4
 Expenses -6.7 -6.4 -4.9 -38.4
 Net profit -13.8 -13.8 -48.5 -60.2
 PAT margin (%) 5.7 5.7 3.4 4.2
 Net fixed assets 10.4 12.9
 Current assets 4.9 3.0
 Current liabilities 5.0 4.8
 Borrowings 8.3 14.7
 Reserves & surplus 5.7 2.1
 Count of Cos. 3,328 3,307 3,201 3,102
Numbers are net of P&E
Updated on: 27 Sep 2020 3:28PM
Annual Financials of All Companies
(% change) FY18 FY19 FY20
All Companies
 Income 8.4 13.3 0.9
 Expenses 9.9 13.5 1.3
 Net profit -40.3 22.2 -14.4
 PAT margin (%) 2.0 2.4 5.1
 Assets 10.9 9.3 9.8
 Net worth 7.5 8.6 6.4
 RONW (%) 3.5 4.3 7.1
 Count of Cos. 27,645 26,682 3,100
Non-financial Companies
 Income 8.7 13.8 -2.7
 Expenses 8.8 14.0 -1.9
 Net profit -9.0 23.4 -21.4
 PAT margin (%) 2.7 3.2 5.7
 Net fixed assets 7.1 5.3 15.3
 Net worth 6.1 8.5 3.7
 RONW (%) 5.7 6.9 9.3
 Debt / Equity (times) 1.0 0.9 0.7
 Interest cover (times) 2.1 2.4 3.4
 Net working capital cycle (days) 77 70 52
 Count of Cos. 22,442 21,605 2,329
Numbers are net of P&E
Updated on: 27 Sep 2020 12:32PM