Hostility between states amid the COVID-19 pandemic hits trade, spurs food inflation fears
The contrasting examples of the relations between Kerala and its two neighbours, Karnataka and Tamil Nadu, during the COVID-19 pandemic, illustrate the human and economic costs of state governments refusing to work with each other, and the benefits of mutual cooperation. Kerala and Karnataka have been embroiled in a dispute since 21 March, when the latter announced that it was closing all road crossings between the states. The decision blocked access for residents from north Kerala’s Kasaragod district to visit Mangaluru, in Karnataka, where the nearest well-equipped hospital is located. The consequences were grave, leading to the death of at least ten patients who were unable to receive urgent medical attention.
The dispute between the two states also led to a complete halt to the road trade between the two states, hurting both farmers and consumers. The blocking of trade and transport between the states can also result in other far-reaching consequences, such as a food inflation due to the restrictions on free trade. Meanwhile, the cooperation between the governments of Tamil Nadu and Kerala has helped both migrant labourers, who were stuck in Kerala during the nationwide lockdown, and allowed for businesses and trade to continue functioning smoothly.
On 21 March, the Dakshina Kannada district administration of Karnataka blocked National Highway 66 at the Talapady checkpost between Mangaluru and Kasaragod in Kerala by dumping truckloads of mud on road. The state government took the decision after six patients tested positive for COVID-19 in Kasaragod, which was then declared one of the ten hotspots of the pandemic by the central government. Two dozen other entry points into Karnataka from Kerala were also closed in a similar manner. On 28 March, a terminally ill patient from Kasaragod died after her ambulance was stopped en route to a hospital in Mangaluru. On the same day Pinarayi Vijayan, the chief minister of Kerala, wrote to the prime minister asking the central government for quick intervention to end the road blockade.
On 1 April, the Kerala High Court directed the central government to “ensure that the blockades put up Karnataka is removed.” The court was of the view that “any further delay could entail loss of precious lives of our citizens.” By then seven patients had died trying to reach Mangaluru due to the road blockade, exceeding the total number of deaths Kerala has had from COVID-19—two so far. This is despite the state having India’s first reported case of COVID-19 cases as early as 30 January.
The Karnataka government refused to lift the blockade, which BS Yediyurappa, the state’s chief minister, said would mean “embracing death.” Yediyurappa made the comment in the wake of panic about people from Kerala filling up the limited medical facilities in southern Karnataka. The Karnataka government challenged the Kerala High Court’s order before the Supreme Court. On 7 April the Supreme Court disposed of the case after Tushar Mehta, the solicitor general, said the central government had facilitated talks between the chief secretaries of the two states and solved the issue.
Though the Talapady check post was opened for ambulances on 8 April, it has not brought relief to patients from Kerala’s border district. “The Karnataka government has now asked for some strict conditions to be followed to get entry into the state,” Sumesh Raj, a Kerala Police officer posted on the border, said. “For one, the patient, the accompanying bystander and a paramedic should carry a certificate showing that they are not COVID positive. They should also provide certificates showing that the treatment that the patient seeks now is not available anywhere in Kasaragod district.”
Sumesh told me that the Kerala government had tried to take precautions to deal with the situation by keeping doctors, paramedics and an ambulance on call at the border. This would mean that people who are facing emergency conditions can get these certificates made quickly. Sumesh added that even if patients were allowed through the border, many were not allowed to gain admission in hospitals in Mangaluru. Kerala’s troubled relation with Karnataka seems to suggest that the COVID-19 pandemic and subsequent lockdown have raised walls of hostility along its borders, creating new obstacles for the smooth functioning of India’s federal structure, at least for some states.
On the other hand, the relation between states seen on Kerala’s other border, with Tamil Nadu, was markedly different. When tension mounted on 4 April, following rumours that Kerala would soon shut its borders with Tamil Nadu, a new hotspot for COVID-19, Vijayan himself attempted to quell the unrest. During his daily press brief Vijayan said that the thought of closing the border “has never crossed our mind. We see our brothers who live next to us as siblings.” Edappadi Palaniswami, the chief minister of Tamil Nadu, responded in a tweet saying, “I am elated that Kerala has treated the people of Tamil Nadu as brothers and sisters. I warmly declare that during all happiness and crisis, Tamil Nadu will be the companion of the Kerala state brothers and sisters. May this friendship and brotherhood grow forever.” Vijayan responded affectionately, tweeting, “The relationship between Kerala and Tamil Nadu is bonded in love, brotherhood, history, language and culture... Together we will overcome the challenges.”
Beyond empty rhetoric, interstate cooperation has been key in helping those facing economic distress due to the lockdown. When Milma, Kerala’s milk marketing cooperative, failed to procure regular quantities of milk because the closure of hotels and restaurants hindered its sales, it caused acute distress for milk producers in Kerala’s Palakkad district. But it started usual procurement on 3 April, following the Tamil Nadu Cooperative Milk Producers’ Federation—commonly referred to as Aavin—and Telangana-based Dodla Dairy’s support to convert the excess milk procured into milk powder.
Kerala’s encouragement of interstate cooperation has also helped Tamil migrant workers in the state, many of whom were quickly identified and taken to relief camps where they had access to shelter and food. However, reports have also emerged of some migrant labourers walking across the Tamil Nadu border because of the uncertainty of the length of the lockdown. In such cases the two state governments were able to share information and respond quickly to the problems faced by migrant workers.
This kind of bonhomie that allows for economic quick fixes is not visible across the country. Farmers, traders and entrepreneurs in the food industry are facing an unprecedented crisis amid the lockdown, which has hampered labour, procurement and supply chains.
Alakkal Joseph, a farmer of areca nut and black pepper from Kasaragod’s Panathur town, explained the impact of the lockdown on his trade. “I used to sell goods in Karnataka’s Sullia market, just 20 kilometers from my place,” Joseph said. “But now both entry points—Chemperi border and Kallapalli border—are shut. Many Keralites study in Sullia’s colleges, especially dental college, and engineering college, as well as schools. Similarly, people from Karnataka’s border villages depend on Panathur for their daily requirements. All of them are in trouble after Karnataka blocked the roads.” According to Joseph, prices of vegetables and other essential goods have gone up nearly fifty percent. “Some goods are coming from Tamil Nadu. But the transportation cost is higher,” he added.
Cyriac G, a pineapple farmer from Udupi in Karnataka, told me that truckers are staying away due to border restrictions and the fear of getting stuck. “Some farmers are facing order cancellations and losses,” Cyriac said. He hoped that the lockdown will end soon so that his produce can be transported to Kerala, Maharashtra, Goa and Rajasthan, before the April–May season gets over. He added that prices in the local market have shot up despite a crash in the wholesale market.
Abdul Samad, a mango wholesaler from Wadakkanchery in Thrissur district, said that the delay at state borders and lack of availability of truckers has impacted his business badly. “I used to send a lot of local variety mangoes—Priyur and Moovandan—to Kolkata by road, which get exported to Bangladesh by sea,” he said. “I don’t know if I will be able to do any business in this season.”
The sudden reduction in interstate transportation of produce is one of the primary reasons for the slowdown in agricultural markets. “Even when most state borders are now open for essential goods, the cargo movement is only 4 to 5 percent, despite the government relaxing the number of essential goods in a circular from 29 March,” Bal Malkit Singh, the chairman of the All Indian Motor Transport Congress—an association that represents over 90 lakh truck owners across the country —said. “While drivers, mostly migrants, have left for their home state, a few who are still around fear of getting stranded, with eateries and garages being shut,” said Singh. He added that truck owners together are facing a loss of around Rs 2000 crore a day.
A few organisations have pointed to the likelihood of food inflation due to the disruption of supply chains and the uncertainty over whether the lockdown will be stretched. On 27 March, Shaktikanta Das, the Reserve Bank of India governor, said that the supply disruptions and panic buying may push food prices up. “Looking ahead, food prices may soften even further under the beneficial effects of the record food grains and horticulture production, at least till the onset of the usual summer uptick,” Das said. On 9 April, the RBI forecast in its Monetary Policy Report that inflation would collapse to 2.4 percent in the fourth quarter of 2020-21 amid a pronounced slump in demand. The report stated that it would create room for more interest rate cuts. However, the central bank has warned that the pandemic looms as a “spectre” that could upset all calculations.
In a statement issued on 31 March, the ratings-agency Fitch said the nationwide lockdown would lead to a growth in food inflation. It noted that food inflation would not ease from the high rate of 9.5 percent that it had predicted in an earlier report published in February. The report argued that the inflation will largely be due to the lockdown, police blockades and the absence of truckers to carry crops to markets.
The economic fallout of the COVID-19 crisis is likely to be long term. State governments being at the forefront of this battle will need to work with each other and the central government, in the true spirit of India’s federal structure, in order to overcome the odds.