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Covid relief fine but labour, raw material key, says food processing sector
Saturday, 28 March, 2020, 08 : 00 AM [IST]
Ashwani Maindola, New Delhi
Even as the Reserve Bank of India (RBI) announced fiscal measures to fight the situation arising out of the Covid-19 pandemic and countrywide lockdown, experts in the food processing industry feel that more steps will be needed to normalise operations in regard to processed food companies.

Sagar Kurade, MD, Suman Project Consultants,and former president, AIFPA, sums it up for the industry: “We have to accept the fact that there is a supply chain disruption currently taking place for the processed food industry.”

He explained that the food processing industry required a multidirectional strategy. Kurade emphasised the following points:
 1. Labour shortage - There are quite a few who have already gone to their villages. Those who remain, have the fear of catching Corona virus. Some are asking for guarantees, which obviously is difficult in current scenario. The few who are willing to come are harassed by enforcement officials.
2. Raw Material - Food maybe seen as an essential commodity but packaging materials and some essential ingredients are not. Moreover, prices of raw materials, especially fruits and vegetables, are fluctuating on a dramatic basis. Hence, this is leading to decrease in production of final products.
3. Urgent need to educate / communicate to enforcement officials on ground: There are cases of harassment by ground officials to keep the processing unit closed.
4. Utility bill exemption, loan benefit exemption or a fiscal intervention must for food industry: While RBI move of reducing repo rate by 75 basis points is welcome, it is important that banks transfer them fully to customers.

“While the move of shutdown is welcome, must as well as supported by the food industry,  it’s important to reflect that we live in a country where more than 50% citizens are directly and indirectly dependent of agriculture and allied income,” he said.

The RBI, on Friday, announced the reduction in Repo rate by 75 basis points to 4.4% and Reverse repo by 90 basis points to 4% which experts say will reduce the cost of credit. The reduction in CRR by 100 basis points to 3% for 1 year to release Rs 1.37 lakh crore was also announced by the RBI.

Besides, there will be three months moratorium on payment of instalments of Term Loan outstanding, deferring of Interest on Working Capital facilities by three months and not considering such deferment for NPA was also announced by the RBI.
Meanwhile, with the unprecedented situation arising out of spread of Covid-19 in India and the corresponding measure of complete lockdown declared by the government; food companies have also taken stern measures to deal with the situation.

For instance, Varun Chaudhary, executive director of CG Corp Global, which makes the ready-to-eat noodles Wai-Wai, stated, “We are putting all our efforts to resume production and maintain a steady supply of goods all over India. We are in constant touch with concerned authorities in different states to get required permission for movement of our products as we are facing difficulties on the ground for transportation of our products like many other FMCG companies.”

“We have implemented stringent measures in our plants. Thermal scanning has been installed in each of our factories. Awareness campaigns are being driven to sensitise our employees and the key information are being displayed in banners across our plants. All employees are being trained to adopt the required measures such as wearing masks, maintaining regular hygiene and sanitisation. We have suspended all internal meetings and have restricted entry of outsiders.” 

“We are closely monitoring the situation and will continue to take the necessary steps as directed by the Central and local governments, from time to time.  CG Foods and its employees are committed to produce and feed our countrymen with utmost care against Corona virus spread, as it is our national duty to do so at this point of time,” said Chaudhary, on a concluding note.  
 
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