Lockdown – Food processors struggle with supply chain

As India enters the second week of its 21-day lockdown, a battle commences and extends itself from production, a reduction in workforce to the logistics. As all movement of people, goods, and services are suspended, the entire supply chain is disrupted. Panic buying in the pandemic has left many marketplaces empty. Even if farmers or producers are ready to dispatch, there are no trucks or drivers to deliver these to points of distribution or sale. The breakdown in logistics has led to a constant fight for business continuity and maintaining revenue flow, a significant challenge for every business in the current lockdown.

Ground realities in the food supply chain

As the Covid 19 pandemic hits industries hard and deepens their economic woes, companies are facing hurdles they’ve never seen before and are bracing up to meet them. Vikram Agarwal, managing director of Cornitos, states, “Greendot Health Foods are manufacturing Cornitos ready to eat snack products in Roorkee after taking all necessary Covid 19 precautions as notified by the government. We are ensuring as well as encouraging our distribution partners to maintain the workforce and vehicles required for the supply of Cornitos products without any interruption and delay. We are taking care of the sanitization of the transport vehicles and the workforce associated with them. It is suggested that the central government may appeal to transport associations to help the nation in this critical period concerning transportation charges and its availability.”

“Cornitos is trying to maintain its supplies, but ground realities are different than what the central government is notifying. Local administration is not cooperative and not allowing interstate movement of trucks,” Agarwal added.

Cargill is working hard to keep its operations running as the company supplies essential commodities, including edible oil, wheat flour, feed for dairy, and others. Simon George, president of Cargill India, said, “Due to the Covid-19 outbreak, there are some challenges around inter-state transportation of raw materials, ingredients, packaging material, and finished goods.”

Milk being the daily essential, Mother Dairy is also trying to maintain its supplies. “At Mother Dairy, we are working relentlessly to ensure that consumers don’t face any shortage of milk. To serve consumers, we have aligned our procurement network across locations to make necessary arrangements at all levels to ensure timely delivery with strict adherence to quality norms,” the Mother Dairy Fruit & Vegetable, spokesperson said.

Dharit Parikh, chief executive officer of HiGrocer, said, “Being in perishable food items our production is daily. Due to the lockdown and restriction on transport, our office staff, which stays in remote areas, faces issues to come to the workplace.” 

MoFPI sets up a task force to resolve problems of the food industry

On 30 March, Union Food Processing Industries Minister Harsimrat Kaur Badal held a video conference with major industry associations, including CII, FICCI, ASSOCHAM, PHDCCI, AIFPA, ICC, FINER and DICCI. The Task Force included all senior officials of the food processing ministry and members of Invest India. She assured industry representatives that a dedicated task force had been established to resolve all problems being faced by the food processing and ancillary industries during the current Covid-19 lockdown. Badal said that talks would be initiated with the transport unions to ensure a smooth supply of food material and access to raw materials by the food processing industry. 

Interpretation versus implementation

Industry representatives told Badal that though directions had been sent to all state governments about the need for allowing the manufacturing and movement of essential items, they were being interpreted in different ways by the state governments. They stressed the need for a uniform format for all states regarding the manufacture and movement of food products. The representatives shared the problems related to factory shutdowns, permission to operate warehouses, personnel movement, and logistic disruption. The industry representatives said that required labor was not available for smooth manufacturing and that there was a shortage of transport also. They further urged that ‘kirana stores’ be allowed to open across the country to ensure the forward linkage was established. 

Ministry creates Grievance Resolution Cell

Badal shared a tweet about her second video conference meeting held on 4 April with the industry associations, “We discussed interventions required by the government to revive the food processing sector after the lockdown ends.” She also announced that the task force on-the-job in the grievance cell had resolved 50% of all 348 queries regarding the supply chain and logistics issues of food processing companies.

According to Agarwal, the task force and grievance cell created by the ministry of food processing industry is the right move, which will discuss and act on all issues related to the sector daily and keep track of them during the lockdown period. The Grievance Resolution Cell should help in a proper and timely interpretation of the guidelines and in resolving the difficulties faced by the food industry and supply chain. It is needed to iron out the enforcement variability issues caused by the large variety of day to day circumstances.