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COVID-19’s impact on Indian agriculture: How data should drive future policies

As policymakers look to understand the impact of COVID-19 on the agricultural sector, they will need synthesised data to inform their policies. This is the first in a series of articles by IDinsight (originally published on NextBillion), that provide analysis of existing data and draw attention to gaps for researchers to fill in over the coming months.

Fishers in Andhra Pradesh, India. (Tata Trusts project) ©IDinsight/Rob Sampson

The Indian agricultural economy is made up of dazzlingly complex market linkages connecting approximately 263.1 million agricultural workers, directly or indirectly, to over 1 billion domestic consumers — and many other consumers around the world. When the Central Government announced a 21-day national lockdown in response to COVID-19 on March 24th, there were deep fears that the agricultural sector would be crippled. Many worried that the transportation restrictions, in particular, would bring to a crashing halt the highly intertwined and labour-intensive food systems that deliver agricultural goods across the country.

Yet despite the challenges of COVID-19, these formal and informal networks seemed remarkably robust on the surface — at least at first. Following the initial lockdown, while the economy ground to a haltfood prices stabilized for many agricultural goods to pre-lockdown levels — though food delivery to state-regulated agricultural markets (mandis) plummeted. By June, just three months after the lockdown was first imposed, the arrival of goods to mandis had rebounded to rates comparable to prior years (see figure 1 below).

Figure 1: Volume of food arrivals reported by registered mandis to the Agricultural Marketing (Agmark) database on a daily basis (via

However, this rebound in market arrivals did not persist past Phase 5 of India’s Central Government response to the pandemic in June (otherwise known as Unlock 1.0) — and a deeper investigation into agricultural sector data highlights latent, systematic challenges. In addition to a decrease in food arrivals to mandis, reports of farmer suicides and data on major food security challenges suggest that agricultural markets may not be as healthy as market figures suggest.

To assess the lockdown’s impact on agricultural activity and consumption, IDinsight, in collaboration with Development Data Lab, has completed two rounds of data collection of a broadly representative rural population across six states (with a third-round currently in progress). This data was collected by IDinsight’s Data on Demand service via phone surveys with over 4,500 households. Below, we’ll explore the results of the data collected through this process, in combination with primary data and other sources, to assess the impact of COVID-19 on the agricultural sector.

We found that in May, 26% of households reported having to limit food portion sizes or reduce meals because they lacked money or other resources. To minimize the immediate food security challenges arising out of the national lockdown, the central government announced an expansive ration program covering approximately 800 million people. It also launched a cash transfer program to support other vulnerable groups. IDinsight found that 90% of all our survey respondents with ration cards received rice, wheat or pulses (legumes) for free from Public Distribution Shops in June, in the states where data was captured (see figure 2 below). (These shops have developed as state-run outlets through which ration cardholders can access subsidized foodstuffs.) This data is encouraging, but there is scope to improve, as an estimated 400 million+ Indians are excluded from the scheme — many of whom are living in poverty.

Figure 2 Percentage of households receiving relief in June, by type of relief and state; data sourced from IDinsight survey

The first indications of the impact of COVID-19 on the agricultural sector came from data on the rabi (winter and spring) harvest. Some pointed to the record wheat harvest and increased annual food grain production as signs of positivity within the data (see figure 3 below) — but again, a deeper look into the findings raises concerns.

Figure 3: Wheat harvest from 2010–11 to 2019–20; data sourced from Fourth Advance Estimates of Production & Food grains for 2019–20, Ministry of Agriculture and Farmer Welfare

For instance, wheat is subject to government procurement policies which helped to ensure that demand remained strong. Accordingly, when focusing on market arrivals to registered mandis — which provides some sense of sales mechanics — we see a different picture than what’s shown by procurement figures. When comparing arrivals of foodstuffs between March 15 and June 30 in 2020 as compared to 2019, we observe a reduction in quantities that ranges from 6.5% (for paddy — i.e.: the rice crop before it is processed) to 61.6% (for onion) — see figure 4 below. Note that market arrivals for wheat over this time period also decreased by 38.4%. The shortfall observed in this data may be driven by many factors, including the government’s procurement policies, direct consumption of wheat by farmers, or storage — all of which would work to keep headline production figures strong despite falling direct wheat sales to consumers.

Figure 4: Change in total arrivals in registered mandi markets. (Data sourced from Ramakur and Tanitkar, “Impact of COVID-19 pandemic on the Indian economy: a critical assessment”)

In August, an IDinsight survey across six Indian states found a 7% increase in planned land cultivation for the 2020 kharif (monsoon) season when compared to the 2019 kharif season (see figure 5 below). But once again, the positivity of such figures is open to interpretation and may be driven by a multitude of factors, including labourers who had migrated away in search of employment opportunities returning to their homes, farmers’ efforts to recoup losses, and families partaking in subsistence farming to overcome food or economic insecurity, which incentivizes the cultivation of land not otherwise considered worth farming.

Figure 5: Change in 2020 planned land cultivation for kharif season (compared to 2019); data sourced from IDinsight survey

As we approach kharif harvest, more research is needed to better understand the causes for increased sowing by farmers, how this increased sowing will impact harvest returns, and whether this may lead to more persistent risks in the agricultural sector.

As the above analysis demonstrates, there is still significant uncertainty around what the persistent impact of COVID-19 may be on India’s agriculture sector. There’s also considerable debate about the government’s approach to managing the pandemic’s impact on the sector. The national government recently introduced new laws, which seek to encourage private sector involvement in agricultural markets by permitting farmers to sell their goods outside of the state-regulated mandis, and removing certain crops from the list of essential commodities — thereby reducing government procurement as a sales channel and encouraging private investment in these markets. These reforms illustrate policymakers’ shift in focus away from short-term, COVID-19-related regulations, and towards the design of India’s agricultural sector in the long term. But the uncertainty around the ongoing impact of the pandemic makes it very difficult to determine what policy prescriptions are needed to mitigate long-term risks.

Accordingly, it is vital that policymakers ask the right questions in order to uncover basic truths and design effective, future-focused policies. Subsequent posts in this series will focus on the following questions, which we believe are vital in diagnosing the potential persistent impacts of the COVID-19 pandemic:

  • How will the new farm bills impact various actors in the agricultural sector? How can data and evidence be used to help leaders set their populations up for success, maximizing the benefits of agricultural markets while minimizing potential negative side-effects?
  • What are the differential effects on women and vulnerable populations (if any) as a result of COVID-19 and related government policies? How can data and evidence be leveraged to minimize outsized impacts on women and vulnerable populations?

With the recent policy reforms and legitimate concerns about their potential for achieving the intended impact, Indian agriculture faces complex challenges driven by multiple factors that influence production, sale and income. We will continue to share insights from our ongoing work, as stakeholders need robust evidence to inform and shape a coherent plan for the sector in the medium and long term.

Originally published by NextBillion.