Farmers' protest not only impacting economic recovery but putting huge dent to supply chain: CII

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The current agitation by farmers has led to supply chain disruptions, which will impact the economy in the coming days and may impinge upon the ongoing recovery from the economic contraction due to COVID-19, industry body CII said on Monday.

"Given the challenge to get the economy back on the growth trajectory, Confederation of Indian Industry urges all the stakeholders to urgently seek ways to end the ongoing protests and reach an amicable solution, in the interest of industry and economy," CII said. 

The farmers' protest, which has intensified over the past couple of weeks, has led to obstruction of traffic and road blockades across multiple checkpoints in the northern states of Delhi-NCR, Punjab, Haryana, Uttar Pradesh and Rajasthan, and in smaller measure in many other states. 

The already broken supply-chain which was recovering post the pandemic-induced lockdown has come under severe stress, CII stated. 

According to the chamber, around two-thirds of consignments in transit are taking 50 per cent extra time to reach their destinations in Punjab, Haryana, Rajasthan and Delhi-NCR.

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In addition, transport vehicles are forced to travel up to 50 per cent longer to reach Delhi from the warehouses in Haryana, Uttarakhand and Punjab.

This may push logistics cost by up to 8-10 per cent. Many companies in the industrial belt surrounding Delhi are facing labour shortages as people struggle to reach production facilities from neighbouring towns, the industry chamber said.

Nikhil Sawhney, chairman, CII Northern Region, said, "The ongoing farm agitation requires an immediate amicable solution as it is impacting not only the economic growth but also putting a huge dent to the supply chain which is affecting the large and small industries alike."

The chamber observed that the effect of the agitation is more acute for industries in hilly regions of Himachal Pradesh, Uttarakhand and Jammu and Kashmir which are dependent on goods transported by road. 

There is also uncertainty around the transportation of farm products to the major markets of Delhi-NCR and it could lead to significant losses to the farm sector in these states, it said. 

"Tourism, a major revenue and livelihood source in these states, is likely to get adversely impacted at a crucial time when the sector is looking forward to regaining some momentum following the unlocking of the economy," said CII.

Farmer leaders on Monday went on a day-long hunger strike and their colleagues demonstrated in different parts of the country to push for a rollback of the new farm laws.

On Day 19 of the protest at Delhi's border points when agriculturalists from multiple states in the north intensified their movement, Union Agriculture Minister Narendra Singh Tomar said the government is engaging with them to decide on the next date of talks -- deadlocked after five rounds.