A sizeable reduction in demand of milk and milk products (MMP) due to COVID-19 lockdown has adversely impacted the milk producers and processors. The consequent decrease in prices of MMP has been instrumental in the losses of their stakeholders. The preliminary estimates of economic losses to the milk producers stand at 112.3 crores per day which are highly concentrated in nine states out of which two states, namely, Uttar Pradesh and Rajasthan alone are accounting for more than one fourth of these losses. The improvement in the welfare of consumers on account of decline in prices is not sufficient enough to compensate the producers, leaving 66.7 crores per day of economic losses uncovered. This dark shadow of lockdown is expected to last long with reduction in milk production and the profitability of dairy industry subject to the mitigation strategies adopted afterwards. It is suggested that procurement of milk by public and private dairy plants should be increased and the same should be utilized to produce dairy products having comparatively longer shelf life like butter, ghee, skim milk powder (SMP), etc. The additional workforce which returned to rural areas may prove to be a boon for the agriculture and dairy sector, provided they are trained in the respective field and channelized in the right direction by equipping them with productive assets like dairy animals, besides developing essential livestock supporting services, viz., veterinary and artificial insemination (AI) centres, milk marketing network and milk processing facilities.
The current COVID-19 pandemic sweeping across the globe is expected to have a disastrous impact on the world economy Indian economy is also expected to face severe headwinds Indian agriculture remains a bright spot though The real gross domestic product (GDP) from agriculture & allied activities is expected to maintain a robust growth rate of 3% in 2020-21, which in turn can help the overall growth in GDP The factors on supply side appear to be largely adequate with robust foodgrain production and sufficient stocks The prices of most of the food commodities have shown a decline in the month of March both at wholesale and retail levels However, major problem could arise on the demand side due to disruption of livelihoods during the lockdown period leading to lower incomes for farmers, agricultural labourers and seasonal migrants This negative impact on rural income is likely to derail the economy, which was already reeling with demand contraction even before the crisis Hence, several safety nets, such as direct cash payments, free distribution of grains, etc , are needed These safety nets are needed for at least six months Immediately after the lockdown period, the activities in agricultural market are likely to increase The measures of social distancing and hygiene need to be strictly enforced at this time The supply of inputs, labour and machinery for the upcoming kharif season needs to be ensured with adequate health safeguards In the wake of fears of a second wave of COVID-19 around November, the recent initiative of selling and transporting directly from the warehouses and FPOs, without passing through the APMC mandies, needs to be strengthened Also, a robust system of direct payments and grain distribution to the vulnerable sections needs to be continued Given the satisfactory state of domestic food supplies, restrictions on exports need to be avoided as it could hamper our global food markets
