Here Today, Gone Tomorrow: COVID-19 and Supply Chain Disruptions

Forthcoming, American Journal of Agricultural Economics, 2020

39 Pages Posted: 11 May 2020 Last revised: 7 Oct 2020

See all articles by Kanika Mahajan

Kanika Mahajan

Ashoka University

Shekhar Tomar

Indian School of Business

Date Written: June 9, 2020

Abstract

This paper looks at the disruption in food supply chains due to COVID-19 induced economic shutdown in India. We use a novel dataset from one of the largest online grocery retailers to look at the impact on product stock-outs and prices. We find that product availability falls by 10 percent for vegetables, fruits, and edible oils, while there is a minimal impact on their prices. On the farm-gate side, it is matched by a 20 percent fall in quantity arrivals of vegetables and fruits. We then show that supply chain disruption is the main driver behind this fall. We compute the distance to production zones from our retail centers and find that the fall in product availability and quantity arrivals is larger for items that are cultivated or manufactured farther from the retail centers. Our results show that long-distance food supply chains have been hit the hardest during the current pandemic with welfare consequences for urban consumers and farmers.

Keywords: COVID-19, Supply Chain Shocks, Food, Prices, Online Retail

JEL Classification: E20, E30, Q11, L81, Q54

Suggested Citation

Mahajan, Kanika and Tomar, Shekhar, Here Today, Gone Tomorrow: COVID-19 and Supply Chain Disruptions (June 9, 2020). Forthcoming, American Journal of Agricultural Economics, 2020, Available at SSRN: https://ssrn.com/abstract=3596720 or http://dx.doi.org/10.2139/ssrn.3596720

Kanika Mahajan (Contact Author)

Ashoka University ( email )

University Campus, Plot #2,
Rajiv Gandhi Education City
Kundli, Haryana 131028
India

Shekhar Tomar

Indian School of Business ( email )

Hyderabad, Gachibowli 500 019
India

HOME PAGE: http://shekhartomar.com

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