Abstract

The Report gives an overview of the situation of scarcity in rural community with respect to rural marketing due to COVID-19 situation. Different sub community like Farmers, migrant Labourer, FPO, Dairy farmers, APMC, Rural households, Shop owners etc face interrelated challenges which can be solved with proper linkages between the whole Rural community and networking with the outside markets. Also in the current lockdown Technology can be major player in improvising the market.

Introduction

The report introduces us to the present situation going in India due to COVID-19. The Indian economy is badly hit, and thus the Rural economy. Rural market seems to ne collapsing due to various restrictions in the market. The entire value chain is disturbed. The different actors like producer, buyer, seller, middle men etc all are being affected in various degrees. Overall the scarcity is there with the producer and seller both because market is collapsing with new challenges and emerging out of it is a great deal for now.

The Market player’s government, private players, consumer, producer all needs to adjust and build up a new system which is feasible and sustainable for present and upcoming times.

It is also a time when rural community could stand for better, have their own made market which give them more opportunity then challenges. There is a need to adjust with the problems and come with new solutions which can solve their livelihood issues.

Rural community are the worst hit among the COVID-19. Every aspect of their livelihood is getting deteriorated. Most important their Purchasing power is getting affected. As it’s a known fact Rural community is a producer and consumer itself. So if consumption is somehow affected, no doubt production will be affected too.

There are some visible changed consumer behaviour during this Covid-19 like

  • Panic buying – Sudden stocking up of grocery materials like toothpaste, soaps, oil, medicines, spices, detergents, toiletries. And many more even in rural areas

  • Money discharge from ATM – especially by farmers for future purchase

  • Stocking of certain items

  • Local Brand acceptance due to unavailability of certain known brand products

These are causing changes or disruption in the supply demand balance and thus gap is created which is unfilled, also it is being exploited .Price is rising of some commodity while some commodity are facing price decline irrespective of their importance.

Scarcity in Rural areas are increasing day by day during the lockdown. The dimensions of which are discussed below related to different sectors, aspects of their life.

 

 

Agriculture

Farmer as a Consumer Producer
Seed , Fertiliser, Pesticides, Insecticide, Diesel , harvesting tools , jute bags, wage labour, Crops (wheat , mustard, barley,), Fruits , Vegetables,

Challenges

  • Unavailability of products in Local shops (especially demanded brand product)
  • Local brand/ counterfeit brand product pushed by sellers which may be harmful
  • Price hike in major demanded product of agro due to many reasons like sudden increase in demand , less supply
  • Less number of shop outlets open for bargain
  • Information asymmetry causing panic buying and selling
  • Barter system getting uneven
  • Money lenders taking high rate of interest for loans provided
  • Cash crunch, even shop owners are not providing inputs in advance before payment to farmers
  • Middle men taking advantage / exploiting farmers
  • Market reachability is also tough due to government restriction
  • Other Agra related companies giving farmers support and supplies are closed down which is also affecting the market commodity availability
  • Due to lockdown farmers not allowed to go outside much which is affecting their decision making as social group is a major part of such decisions.
  • Market , Mandi getting open and closed for short duration due to laws of lockdown and spreading issues due to crowd , leading of decline in sales due to less time window opportunity to sell
  • Decrease in the price of commodity due to unregulated /disrupted mandis,market leading to increase in Opportunity cost of producer/seller
  • Timely harvesting is affected due to no labour availability and social distancing
  • Issue of storage is there for perishable products like fruits and vegetables
  • Producer have to sell the produce locally , thus increase in local supply, creating competition high for local producers thus less price in return
  • Transportation cost has gone high as public transport is closed down., leading to decline in profit
  • Middle men taking advantage of the situation , by procuring the produce in bulk and then selling in mandis
  • Price fluctuation is high due to information asymmetry and irregular crowd.
  • Selling to far urban towns had gone down , as transport restriction is there, needs a pass to cross some town borders which are not feasible for small producer

Opportunity

  • Use of local seeds, own produced seeds.
  • Making of Organic fertiliser, biodegradable / natural insecticide, pesticide, herbicide
  • Change in Agricultural practices from chemical to organic/ Natural, decreasing the need of external input and using the local resources
  • Making groups of farmers for buying in bulk for price bargaining and, increasing bargaining power.
  • Locally make packaging items ,like jute bags, use recycling of old bags
  • Farm to home strategy – collating the produce of many farmers, then transporting it to mandis or nearby towns, Haat, to sell. Decrease the expense and increase the probability of selling, reduces middle men exploitation and cut.
  • Setting up of small market of fruits, vegetable outside of village’s .with aggregation of other Agri commodity and facilities like milling, grinding etc.
  • Private sector Agri supply chain companies could play an important role as they can procure from villages and then, can sell in different locations.
  • Bulk selling (single commodity) of produce is one of the opted strategy to increase strength of producer.
  • Barter system exchange can be there, by fixing market rate for each produce and then can exchange within the local communities, thereby decreasing the transportation and storage issues.

 

APMC (Agricultural Produce & Livestock Market Committee) closing down

Challenges Opportunity
  • Shutting down of some APMC
  • Crowd management , social distancing during and slightly after the lockdown
  • Mandi causing decrease in efficiency in market selling, waste created
  • Increase in supply chain cost
  • Increase load on single farmers in lockdown
  • New model will be generated based on FPO
  • Warehouse based sales , Local warehouse as marketers, buyers can connect directly
  • Mandi will function as they are but how they operate will be different
  • Framer – Processor- Buyer direct connections
  • Framer producer organisation (FPO) can directly link market.
  • New temporary mandi set in near town areas, where village are near to towns.
  • Selling od 1 single commodity at a time (good profit)

 

 

Rural community is facing scarcity and price fluctuation like never before, this uncertainty of supply, demand and information is causing unnecessary havoc. Thus now more than ever is the time to give a new direction to rural consumer, producer making them not only know how to make but know how to sell.

Day to day challenges faced by Rural community are as follows:

  • Unavailability of grocery items in shops, decreasing old stocks day by day leading to increase in prices, less discount.
  • Counterfeit product pushing by seller as consumer is not aware and reluctant due to lockdown immobility
  • Limited shops thus limited products, substitute items being sold
  • Timing of shop opening is also an issue creating consumer in confusion and fatigue to buy.
  • Hygiene products are unavailable which is now demand in Rural areas as well

Opportunity ahead

As the product unavailability is an issue, but it can be an opportunity to put Theory of Trial practically. We now more than ever can have locally made product,

  • reduces cost of transportation,

  • give livelihood opportunity

  • use of local resources available

  • income provision to rural areas as well

SHG women’s who know how to make Soaps, Agarbatti, Mask, Spice mix, local homemade products, sanitiser, hand wash,pickle,Chips using local ingredient fits into the gap created by COVID-19 in market. These essential product that can be made at home for subsistence and selling purpose also. These can easily be sold in local market and due to unavailability of other branded products these product could become brand of their own. Even buyers will buy as it’s easily available and fits in their pocket.

The Acceptability will be high

Availability will be in local areas

Affordable range of village pockets and low budget

Awareness must be created through proper marketing

( 7 Ps of the marketing in next page)

Marketing of Rural produce

 

Perishable Dairy products like Milk, Paneer, Curd, Chena etc

Challenges Opportunity
  • Sudden closing downs of local sweet shops, Bakery, local hotel ,Dhabas which procured milk from local dairy farmers creating demand crunch
  • Feed cost of keeping animal high as sudden increase in feed cost
  • (Rs. 260 per cow input cost per day , while output is Rs.120 only)
  • Local dairy which procured has slowed down procurement
  • Unavailability of consumers in market
  • Storage is not possible and thus selling is essential , thus supply is continuous while demand irregular, creating price instability
  • ( milk price gone down by Rs.15-25per Litre) in local markets
  • Transportation is not possible for Dairy farmers to sell in towns thus ,their market size has reduced heavily
  • Procurement by local, state dairy who can sell it to towns.
  • Making small retail dairy temp shops/outlets in village markets , as well as towns and sell it
  • Procurement of milk from villages ,to a local centre ,Processing milk to powder so as to sell in future , even can provide the same to aanganwadi mid-day meal etc
  • Recycling of cow dung etc into manure , compost etc. and sell it locally (cheap , sustainable , natural , locally available) to have extra income
  • Contacting any Dairy supply chain company to procure milk, and set up chain to supply the milk in urban areas.

 

Agriculture allied

Challenge: One of the most affected area is Poultry, Fishery etc

  • The information asymmetry about sudden Bird flu and COVID-19 causes human created havoc. It had caused huge loss.
  • In many areas Chickens were released free, whereas somewhere sold at Rs.20 – 30 per kilos which is a huge loss.
  • People stop consuming whereas seasonal festivals also added to it

Opportunity: Eggs being a major part of diet, can be part of a valuable chain which is ongoing in this Covid-19 situation.

  • Eggs can be procured at a min price by Government agency/ Set up for poultry management. Then these can be taken to a local inventory /warehouse setup nearby in towns. These can be added to the stocks for distribution items (Rice, pulses,oil,soaps etc) given as ration to villages, migrant people, BPL ration package. Distribution can be done thereafter’

  • This model below needs technical assistance as online information has to be stored and transferred thus digitisation use is an added advantage here.

 

Rural Migrant population

Challenges Opportunity
  • Unavailability of work
  • MNREGA is non-functional for now
  • No unorganised sector work security
  • Sudden immobilisation leading to the panic social environment
  • Livelihood affected
  • Purchasing power went down
  • Rural market affected
  • Extra cost to survive
  • Migrate to uncertainty
  • Include the works like sanitation worker, security Persons in areas going under COVID -19 health issues and pay the wage as payed earlier
  • Include them in works of procurement and distribution in village areas ,which can enhance the work in those needed areas
  • Train some skills on duty like processing etc for fruits and vegetables which can come handy for present and future, simultaneously set up processing unit for these commodities. A sustainable idea of livelihood generation

 

Immediate Payment issues with Farmers

Challenges Opportunity
  • Working capital is still an issue , and unavailable now
  • More working capital need
  • New Harvest season demands money investment before return
  • Money lenders exploiting
  • Loss due to untimely payment
  • NBFC policy changes for credit
  • Open up credit line to entire value chain to allow money at every account on time
  • Micro loans with no collateral for borrowers for small business, Rural entrepreneurs

 

Bibliography

  1. Covid-19: Indian Farmers, Consumers Suffer As Lockdown Disrupts Supply Chain

Reuters – https://www.indiatoday.in/coronavirus-outbreak/story/coronavirus-indian-farmers-consumers-suffer-lockdown-disrupts-supply-chain-1660442-2020-03-27

  1. India Covid-19 Lockdown Means No Food or Work For Rural Poor

Kunal Purohit – https://www.aljazeera.com/news/2020/04/india-covid-19-lockdown-means-food-work-rural-poor-200402052048439.html

 

  1. COVID-19 and the risk to food supply chains: how to respond 2020
  2. The Impact Of Covid-19 on Consumer Behaviour

Numerator Intelligence – https://www.numerator.com/resources/blog/impact-covid-19-consumer-behavior

5. Coronavirus Lockdown Having an Adverse Effect on Agriculture Sector in India

https://www.grainmart.in/news/coronavirus-lockdown-having-an-adverse-effect-on-agriculture-sector-in-india

6. The Agri Entrepreneurs – Market Linkage Group Minutes of the Meeting and Recommendations for Action based on Web Conference on 4th April 2020: Covid19 – Supply Side Issues in Agriculture

7. Voices of the Invisible Citizens, A Rapid Assessment on the Impact of COVID-19 Lockdown on Internal Migrant workers, Recommendations for the State, Industry & Philanthropies

8. Live news channel

 

 

 

Report Submitted by ARDS Intern:

 

Sugandha Kumari (UR19106)

Xavier School of Rural Management (XSRM)
Xavier University Bhubaneswar

 

To

Assam Rural Development Society (ARDS)

HN: 347, Kahikuchi Road, Airport Road
Azara, Guwahati, Assam, 781017