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Covid–19 crisis – Challenges and solutions for food industry
Wednesday, 22 April, 2020, 08 : 00 AM [IST]
Sagar Aanand N Kurade
The threats and challenges faced by the world and Indian food industry with regard to growing Covid-19 is unprecedented, the likes of which India has certainly not seen post-Independence. While the Government of India needs to be commended with regard to prompt and early action in handling the crisis, it is important that the supporting actions are also immediately put forth so as to avoid putting a complete break on the processing and economic activities associated with agriculture and horticulture processing. 

While food processing plants as well as the supply with regard to their raw material has been declared as essential services, it is important to table the challenges that the Indian food industry is facing and ensure quick solutions with regard to the same.

Farm level Concerns
India is in the middle of a major harvesting season of Rabi crops especially with regard to crops such as wheat, barley, mustard, fenugreek, garlic, mango and litchi. The current crisis is leading into a situation where there is not enough work force at farm level to ensure harvesting of crops. Add to this the fact that farmers are not able to monetise their crops due to supply chain disruptions. 

It is therefore suggested to ensure farm level workers be immediately issued working passes / stamps by respective Panchayats or by the District Collector.  

Labour / Work Force
Even through food processing plants would like to initiate and / or increase production, the industry is facing a challenge with regard to the availability of work force as well as convincing the work force to attend. While most industrial units are willing to provide an environment which mitigates the chances of any Corona virus in the plant, there are cases where by work force is asking for guarantees on the same. 

The industry is suggested to follow the guidelines issued by Government of India and as far as possible arrange for stay and food provisions of migrant labourers. The state and Central government, on its part, should encourage Industry to issue working pass and or stamp to critical employees required to run the plant. 

Educating Enforcement Officials
The Corona virus situation, presented in front of us, is a fluid situation leading to notifications by different ministries and state departments being issued on a regular basis. However, there needs to be a consolidated effort on part of each state as well as Central government to ensure that these notifications are communicated to and understood by the enforcement officials at the ground level. The earlier 21 days of lockdown situation in India reflects on the urgent needs to do so.  

Financial Implications
The food processing Industry, especially the MSME sector is facing serious challenges with regard to working capital as well as term loan. It is therefore suggested, that all banks should be instructed to issue working capital loans equalling to 25% of the last three years average company turnover. The interest rate so charged should not be more than 3% over and above the Repo rate.  

Further, the moratorium on all EMI to banks and NBFC should be extended from three months to six months without any levy of additional interest or penal interest.

Taxes and Filings
Goods and Services Tax slabs with regard to all essential services including food industry should immediately be looked at. An ideal suggestion would be to reduce the slab rate under which a certain good or services operate. Further, the timelines with regard to filling of GST as well as TDS should be extended by a period equivalent to the expected period of the lockdown. This move should be supported with extension of dates with regard to any approvals, licences, clearances and renewals from state and / or Central government.

Utilities and Expense Support
While Ministry of Finance as well as RBI have to be commended for providing some financial relief, it is important to understand that citizens and corporates are bogged down with many additional expenses such as electricity bills, water bills, gas bills, income taxes as well as property taxes. It is suggested that the state and Central governments should look to discount these expenses as part of a relief package.   

Trade & Logistics Incentives
Ministry of Commerce, Government of India, needs to re-look into the duty structure of products which are being imported in order to support essential services. Once the crisis mitigates, the Central government may look to re-impose the same next year. 

Further, while Government of India has advised non-charging of container detention charges from March 22 till April 14, 2020,  this period should be extended till May end, 2020. This move should also be supported with quick and free movement of goods across the country without charging on any toll taxes for a period of at least three months. Additionally, limits with regard to letter of credits as sanctioned should be increased. 

Having tabled the challenges and solutions for food industry in view of Corona crisis, it is also important to ensure that we, as citizens of this proud nation, should contribute as much as possible to the state and government relief funds as well as support the nation in whatever way possible in time of such crisis. 
Wishing all readers - Stay Safe.

(The author is MD, Suman Food Consultants, and former president, AIFPA) 

 
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