India’s Food Supply Chain Frays as People Stay Home

Date: Friday, April 10, 2020
Source: The Wall Street Journal

Country’s reliance on people power to harvest, distribute and sell goods leaves it vulnerable during coronavirus shutdown

NEW DELHI—Two weeks into the world’s biggest lockdown, India’s food supply chain is struggling with a shortage of one of its crucial commodities: people.

Essential industries—such as growing, harvesting and delivering food—are allowed to operate under the lockdown but the people who move the essentials from farm to fork aren’t showing up for work. Stores say some basics such as eggs, yogurt and cooking oil are increasingly hard to find, a development they say could point to bigger problems ahead if things don’t return to normal in the coming month.

India’s food industry is the most fragmented in the world, with hundreds of millions of small farmers selling through a system of millions of middlemen who eventually deliver to millions of tiny shops, stands and carts. It depends on a lot of people doing things by hand.

That reliance leads to bottlenecks when people are afraid to go out, and a tough balancing act between stamping out the virus and keeping a subsistence economy functioning. If the hundreds of millions of people who are essential to the food industry all went out and did their jobs, it would make it more challenging to maintain the social distancing necessary to prevent the spread of the virus.

“There are so many human interventions in the Indian supply chain,” said Subho Roy, a researcher at the University of Chicago who has studied Indian agricultural markets. “There are not a large number of people involved in nonessential, close-downable industries.”

Farmers in India’s breadbasket are about to harvest the wheat crop. But their seasonal helpers aren’t showing up, and the few truckers willing to work are unable to buy food on the road and are getting harassed by police. Some simply leave their vehicles on the highways and go home.

People at the wholesale markets around Delhi say fewer trucks are showing up and the workers who unload them are absent. The mom-and-pop shops that sell products report that their shelves have been cleared of some products by panic buying, but many regular deliveries have stopped and they can’t get to the wholesale markets to do their own pickups because the rickshaws they need to get there have disappeared.

“These are terrible times,” with many distributors having stopped delivering to stores, said Rajeev Tayal, who runs a small grocery store in a New Delhi suburb. “I have no choice but to get in my car, go to the distributors’ warehouses and lug heavy sacks of goods myself.”

India has limited mechanization, so moving goods requires a lot of people power. Wheat is harvested by hand, not combines; burlap sacks of potatoes are loaded on trucks using lines of men instead of forklifts; eggs reach shops on the back of bicycles, not refrigerated trucks. More than half of India is involved one way or another in the growing, delivering and selling of food, economists say.

While the food supply chain isn’t supposed to be restricted by the lockdown, it is tough for authorities to differentiate between someone who is going to pick up a few bags of rice for his store and someone who shouldn’t be out. Meanwhile, much of the labor force is spooked and doesn’t want to come to work even if they are allowed.

The wholesale vegetable and grain markets that feed New Delhi illustrate the problems. Buyer arrivals have plummeted because of fear they would be breaking the law or could get infected as well as the lack of public transportation. The traders and customers who do make it are struggling with lack of help.

“There is no manpower: no one to load and unload the vegetables and a shortage of cleaning staff,” said Vijender Yadav, an onion trader who works at a sprawling open market near New Delhi. “This wholesale market is always dirty but never this bad.”

Fewer trucks are arriving as drivers abandon them, unable to cope with delays at state borders and being repeatedly stopped by police. Meanwhile, the affordable roadside truck stops they depend on have mostly shut down.

“All the eateries on the highways are closed. I have nothing to eat,” said Dhanraj Singh, a truck driver who got stuck in the lockdown delivering tomatoes to New Delhi. “Everyone says we should keep delivering essential supplies. But the supply link can continue only if we survive.”

Farmers are predicting problems too. While most farms are small, many still require seasonal help during harvest, often from other Indian states or even Nepal. Fear and travel restrictions are keeping the help home.

Satnam Singh, a wheat farmer in the western state of Punjab, said his crop will be due for harvesting next week but none of the 50 laborers he needs have shown up.

“My crop is ready but I’m worried about how I am going to harvest it,” he said. “The local workers aren’t leaving their homes and those from other states have gone back to their villages.”

The government had hoped online retailers, who have been transforming India’s outdated supply chain, would step in to fill some of the gaps, but their operations have been disrupted too.

Their armies of motorcycle delivery people were getting stopped in the streets and even detained because police weren’t sure if they were an essential service. WalmartInc.’s Flipkart said it lost more than half of its warehouse and delivery staff, presumably as they were scared to come to work. Some employees have started to come back now that the company has ratcheted up salaries and reassured them the police will let them do their jobs.

India’s hobbled supply chain has still been delivering the very basics—wheat, rice and some pulses—and should be fine if everything returns to normal when the lockdown is set to end April 14. However, there is good chance some restrictions will continue and citizens will remain home, causing shortages to worsen and spread to other products.

“Out of the 10 things people order, I can only give them around three,” said Gopal Kumar, who owns a general store in New Delhi. “Customers are getting worried and so are we.”


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