Pandemic Led Food Price Anomalies and Supply Chain Disruption: Evidence from COVID-19 Incidence in India

40 Pages Posted: 28 Aug 2020

See all articles by A G Adeeth Cariappa

A G Adeeth Cariappa

ICAR - National Dairy Research Institute

Kamlesh Kumar Acharya

National Dairy Research Institute - Department of Dairy Economics, Statistics & Management

Chaitanya Adhav

ICAR-National Dairy Research Institute - Department of Dairy Economics, Statistics and Management

Sendhil R

ICAR-Indian Institute of Wheat and Barley Research

P. Ramasundaram

Indian Council of Agricultural Research

Date Written: August 27, 2020

Abstract

COVID-19 induced lock down has disrupted the food markets and commodity prices in India. This paper uses evidence from the official statistics on daily wholesale and retail prices (n=284) for major commodities by adopting interrupted timeseries analysis (ITSA). The results revealed that prices shot up immediately since lockdown, for chickpea, mung bean, and tomato. We find no evidence of structural break in food prices due to lockdown implying that the changes in prices caused by lockdown was not sufficient enough to alter the long-run price movement. ITSA confirmed the result as a majority of the commodity prices reverted indicating a negative post-intervention trend. We also triangulated the results with an online survey of 729 consumers coupled with a dipstick (telephone and personal interview) survey of 225 farmers. Despite the relaxation allowed for agricultural related activities during the lockdown, farmers reported disruption in disposing their winter produce barring wheat, covered by state procurement. The lockdown period coincided with the wheat harvest, the second most produced and consumed cereal in the country, resulting in a record procurement of 38.98 million tonnes in 2020. Consumers’ survey indicated that the pandemic restricted the access to food markets and a majority (75.31%) experienced an increase in the price of food items across intensity of COVID incidence. The pandemic has impacted the consumers’ livelihood from moderate (59.53%) to severe (3.3%) with 92 per cent reporting a change in shopping behavior. The Kruskal-Wallis test on Composite Consumption Behavior Change Index (CCBCI) indicated a significant shift among consumers who reported income change during the lockdown. The paper affirms that the pandemic has caused dramatic and unprecedented panic purchase by consumers as revealed by the survey. We strongly recommend for creation and functioning of suitable social safety nets to insulate vulnerable consumers and producers from the persistence and recurrence of pandemics.

Keywords: COVID-19, retail price, wholesale price, supply disruption, interrupted timeseries

JEL Classification: D12, E31, Q11, Q18, Q13, L51

Suggested Citation

Cariappa, A G Adeeth and Acharya, Kamlesh Kumar and Adhav, Chaitanya and R, Sendhil and Ramasundaram, P., Pandemic Led Food Price Anomalies and Supply Chain Disruption: Evidence from COVID-19 Incidence in India (August 27, 2020). Available at SSRN: https://ssrn.com/abstract=3680634 or http://dx.doi.org/10.2139/ssrn.3680634

A G Adeeth Cariappa

ICAR - National Dairy Research Institute ( email )

Karnal, Haryana 132001
India
+919741000909 (Phone)

Kamlesh Kumar Acharya

National Dairy Research Institute - Department of Dairy Economics, Statistics & Management ( email )

Karnal (Haryana) 132 001
India
9437204130 (Phone)

Chaitanya Adhav

ICAR-National Dairy Research Institute - Department of Dairy Economics, Statistics and Management ( email )

Karnal (Haryana) 132 001
India

Sendhil R (Contact Author)

ICAR-Indian Institute of Wheat and Barley Research ( email )

PO Box 158, Agarsain Marg
Karnal, 132001
India
132001 (Fax)

HOME PAGE: http://https://iiwbr.icar.gov.in/team_member/dr-r-sendhil/

P. Ramasundaram

Indian Council of Agricultural Research ( email )

Krishi Anusandhan Bhavan II
Pusa
New Delhi 110012, Delhi 110012
India
9716134485 (Phone)
110012 (Fax)

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