Road to recovery
As one of the major sectors in Nepal, agriculture falls under the government’s priority list. However, the sector hasn’t received the required attention, due to which it hasn’t been able to make departures from its traditional ways. There is a dire need of innovation, especially with regards to the supply chain, in the sector to re-invent it. Furthermore, the lockdown brought about several challenges which again highlighted the need to rebuild traditional supply chain mechanisms. To under how the agriculture sector coped during the pandemic, and how supply chain dynamics changed, NEF spoke to Prajwal Kattel, Chief Operating Officer of AgriMove Pvt. Ltd. And prepared a brief excerpt as below.
Impacts of the COVID-19 pandemic and the subsequent lockdown on AgriMove’s business operations:
The COVID- 19 pandemic largely impacted the business operations of AgriMove, especially during the first week of the lockdown as the business did not operate during that week at all. Once the government started providingpasses; the business resumed in a relatively small scale and location. In the beginning, it was challenging to cope with the health and safety issue of the staffs, mobility, the response that they would receive from their family, the landlord, and the society. With almost daily changes and updates in government regulations, the business had to re-adjust operations promptly and logically. Sometimes, strategies prepared in the previous night would not work the next day.It was evident that no new strategy would work as ‘the’ strategy in this situation.The company had to adapt with new working hours, work division and order processing. However, as the team got familiar with this change, it managed to regain the business.
Innovative business and supply chain modalities that were adopted by AgriMove (if any) in order to cope with the current crisis:
Most of the things that were being done earlier had to be done in new ways, adaptingto limited resources and strict government guidelines. Since packaging takes a significant amount of time in AgriMove’s supply chain cycle, the business had to innovate in this section. Order patterns received during the few days of lockdown had to be studied,and new arrangementshad to be made to reduce daily packaging hours. On the other hand, it was impossible to do 100% procurement directly from the farms. Therefore, it was decided to gain a balance through dry vegetable items, fruits and utilize short distant farms. Also this ratio was changed with respect to AgriMove’s fulfillment center. In other way-round, a shorter farm-to-fork supply chain was basically the game changer. Therefore, not only was AgriMove able to do better regular business, but it also reduced the post-harvest losses that used to happen in the past.
In many instances, agriculturalproductscould not reach the market platform due to the lockdown resulting in losses for farmers/producers, and there was a high rise in prices of agricultural produce.
Measures that could be taken in future to avoid such situations:
Even before the lockdown, it was an unpleasant reality that not much Nepali fresh produce used to reach the market, which was made worse by the lockdown. This is a national issue, and the government should come up with necessary feasible plans to address this. Moreover, aplan to introduce and strengthen digital platforms and structures could be a good way forward. However, looking at the current practices in other sectors, it is doubtful that the government is ready for this. Few plans from the government side such as- subsidy for transportation, minimum dynamic rates for every produce, purchase guarantee for smallholder farmers makes more sense and will create positive impact in a short time.
Impact of unavailability of seeds, fertilizers and human resources on agricultural yield (in terms of production and in the near future), and its influence on the recovery process of the agriculture sector:
By their long experience, Nepali farmers and producers know that unavailability of seeds and fertilizers significantly reduces production. There are multiple prospects to increase production through timely availability of improved seeds and fertilizers, as well as through soil fertility management practices. Adopting a strategy of district based seed banks would help to address this problem in a systematic manner. A large fraction of the production gap is also resulting from the lack of knowledge, inadequate access to affordable technologies, and unavailability of extension services due to weak public and private sector capacity to provide support needed for small scale farmers. To address this issue, even a simple initiative like producing and disseminating reliable hand books about ‘the geography and climate suitable crops’ to farmers and producers can be highly effective. We are quite poor in terms of understanding and analyzing the total and real cost of agricultural production and generating necessary data. A thorough study of crop based ‘cost of production’ is urgent to make a realistic plan for the future. As an optimist active in this business, I believe that modern technology has to be used as soon and widely as possible in agriculture throughout the farm-to-fork chain. In addition, alarge number of Nepalis youth alsohave to be trained to use these technologies effectively.
Type of policy reforms (particularly from the government) that are required to stabilize supply chains in the agriculture sector in order to ensure demand and supply equilibrium, and food security post the pandemic:
The government should make policies that combine the actors in the supply chain. That includes producers, processors and distributors to stabilize supply of fresh produce and to improve the functioning of the chain. Collaboration amongst various stakeholders along the value chain is very important. The interdependence between stakeholders in the chain and their wider network all should be involved in such collaboration. Improved supply chain helps to collect more produce and reduces harvest loss. Our domestic demand and supply equilibrium of the produce is very much out of balance because of the import mainly from India. This is discouraging for local producers. On the other hand, produce imported from India is cheaper compared to domestic production. Therefore, our government should support farmers in reducing their cost of production. Also it is important to encourage our farmers to harvest products that are imported to help us meet demand and supply equilibrium.
Food security starts from seed selection and ends at the dining table. Basically, it comprises of four dimensions: availability, access, utilization, and stability. When all four of these dimensions are fulfilled simultaneously at an individual, household, community or national level then only food security will be achieved. Along with this, climate resilience has also become critical in food security thinking.Therefore, the government should plan and coordinate policies that are suitable to our food ecosystem.
“Supply chain in agriculture sector has been highly disrupted which could take a while to recover despite government easing regulations.”
Supply side measures and recovery plans that could be adopted to ensure smooth and prompt revival of the agricultural sector of the nation:
Nepal’s current supply practice of fresh produce is still quite traditional. The practice of supply chain is unaccountable. The coordinated and systematic supply along the chain is a very important footstep to equalize this problem. The small scale farmers are not getting the fair price they deserve for their total produce because of various reasons including poor transportation system.
The government can and should take some important initiatives like building as many collection centers as possible at local levels, shortening the distance between farms and markets by creating new authorized markets, subsidizing the fresh produce transport agents, and encouragingas well as facilitatingthe private sector.
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