A Mind To Stomach it !
Constitution provides for ‘Food security’ as a major guarantee to every citizen of India.
Covid-19 pandemic has affected the food and agriculture sector of India as badly as it has the other sectors even though this is one sector which should in-principle, be less affected than others.
The chief factors which have affected food-supply include labour shortages, transport and human movement interruptions, quarantine measures limiting access to markets as also supply-chain disruptions.
As the Central Government imposed lockdowns in all States across the country, recruiting seasonal workers has become a major problem for farmers. As almost every commentary has said by now -‘the coronavirus and the measures taken across India will have a direct impact on food production.
Overseas too, the scenario isn’t any different : the fruit and vegetable farms that rely on seasonal workers abroad are particularly affected. The coronavirus has arrived at the worst time – the season for sowing vegetables,and soon it will be the time to sow cotton, pulses and other crops. In some regions, vegetable and fruit farmers are struggling to package and transport their produce and they face a logistical nightmare caused by a nationwide coronavirus lockdown. A similar situation is taking place in other States where farmers are worrying about who will harvest crops amid an exodus of migrant labourers making a beeline to return to their native places in other parts of the country.
As elsewhere in the globe, Indian agro-traders are pondering how long supermarkets will stay fully stocked as long-time supplier nations begin imposing export controls. Kazakhstan, for instance, has reportedly banned exports of wheat flour (of which it is one of the world’s biggest sources)as well as restrictions on buckwheat and vegetables including onions, carrots and potatoes.
Similarly, Vietnam, the world’s third biggest rice exporter, has (reportedly temporarily) suspended rice export contracts.
And, Russia, the world’s biggest wheat exporter, may also threaten to restrict exports, as it has done before.
The consequences of such actions are far-reaching and life-threatening.
Everyone is vulnerable to food price rises and shortage unless the government takes action.
India most urgently must bring in a ‘Strategic Food Ordinance’ aiming to ensure ‘adequate and uninterrupted food supplies through wholesalers and retailers across the nation,at all times’.
The law should seek to regulate the strategic stock of food commodities in the country. In the event of crises, emergencies and disasters, it may offer incentives and facilities to registered providers and merchants even while stipulating various penalties that include imprisonment and fines of up to rupees fifty crores for violators.
As per the law being mooted, registered merchants are required to manage the strategic stock of food commodities and the warehouse by specifying the location, area and size of the store designated for the food commodities provided that it is in the country, and to notify the Competent Authority of the location of the store, as well as storing the stock of food commodities under the specifications and standards adopted in existing Law.
And what would the Ordinance law mean for food retailers?
If you are a food retailer, in order to comply with your legal obligations, you must have a proper (and up to date) crisis management plan in place and make sure you implement it fully.
Some of the key questions you need to ask :
i) Does your plan sufficiently protect vulnerable employees?
ii) What are your stock levels? Do you have stock level and demand auditing monitoring systems in place to enable you to replenish stock levels for food and groceries as quickly as possible in order to meet your legal obligations?
iii) Does the plan expressly identify the key personnel (and their authorised delegates) and their relevant functions? Are the key personnel (and their authorised delegates) able to lawfully operate in case of emergencies including during the lockdown periods?
iv) What are your notification obligations in the event you become aware that you are (or are likely to become) unable to manage the required stock levels?
v) Do you have alternative supply, production and/or storage facilities available? What are the supply terms and conditions? Are the terms consistent with your statutory and other contractual obligations?
vi) What is your position vis-à-vis your suppliers and distributors? Are any of your main suppliers in countries severely affected by the pandemic (e.g. China, Italy, Iran) or the lockdowns and human movement restrictions (e.g. Australia) or where protectionist export restriction measures have been introduced (e.g. Vietnam and Kazakhstan)? How strong is your position in relation to any potential non-performance by suppliers or subcontractors?
vii) Have you conducted a full review of your contracts particularly the force majeure and insurance provisions? Are you sufficiently protected against business interruption caused by issues such as supply disruption, failure of utility services caused by a pandemic?
Thus, the suggested new Ordinance-law on food security ought to place an extra layer of obligation on food-retailers to be prepared and take a proactive measure to respond and manage the implications of the coronavirus pandemic on the food and agri-business.
Food retailers must consider their statutory and contractual obligations carefully given the constant changes in light of the rapid movements in the global supply chain.
A comprehensive and up to date crisis plan would be essential to ensure the continuity of supply.
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This really ground reality in the existing circumstances and authorities shall act on priority
Thought provoking..