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COVID-19’s Disruption of India’s Transformed Food Supply Chains
COVID-19 has created high transaction costs and uncertainty in India’s transformed food supply chains, putting food security at risk as 92% of food consumption in India is purchased, predominantly from the private sector. Government faces the challenge of marshalling resources between mitigating the impending food crisis and containing the contagion as the risk of sociopolitical tensions looms large. It is recommended that the government concentrate on sustaining the food supply chains towards eventual rebound, recognising that government food distribution cannot replace even a tenth of the market.
COVID-19 is spreading through the developing world and has not spared India. In response, the Indian government has imposed rigorous lockdown regulations, which have an impact on all aspects of the economy. How will the COVID-19 affect food supply chains (FSCs) in India?
To understand the impacts of COVID-19 on the Indian FSCs, it is crucial to start by considering some surprising realities of the new Indian FSCs. There has been a deep and rapid transformation that has shifted the FSCs from being “traditional” to largely “transitional” in just two decades, making India one of the fastest changing agrifood economies in the world. The Indian food economy now is mainly urban, fed by long rural–urban supply chains. It is now 80% composed of non-foodgrains and thus fed by perishable FSCs, 60% post-farmgate, and 85% dependent on small and medium sized enterprises (SMEs) that are dynamic and clustered near and in towns. It is 96% dependent on the private sector (with government managing only 4% of India’s food). It is characterised by highly integrated rural hinterlands, peri-urban and urban areas, having tight and fluid connections in both directions.
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