Like US, agriculture ministry needs a wing to collate dependable farm data
by Tejinder Narang
October 25, 2012
The fear of drought in India has abated with late precipitation of the monsoon in September this year. However, the country continues to suffer from a drought of formalised tabulated data of agro items on a real-time or monthly basis, though many estimates continue to fatigue the print and electronic media.
Red or green prices flashing on computer screens are taken for ‘granted’, but the discovery of future or spot values is an extremely complex algorithm of world’s weather phenomenon, crop conditions, macro-status of supply or demand, stocks in hand, export or import presumptions, local or sea freight rates, speculation, domestic and international financial parameters and so on.
Agriculture and allied activities, valued at $252 billion, represent 14% of India’s GDP of $1.8 trillion. India exports around 25 million tonnes and imports around 14 million tonnes of agro commodities every year. Also, domestic consumption of grains, pulses, oilseeds and sugar is around 255 million tonnes.
So, the country certainly needs latest tools in data collation and publication. This year, all major countries that produce or trade in rice, wheat, corn, sugar, edible oil, pulses and even Indian traders are closely watching the country’s roller-coaster ride from the perceived drought to an expected normalisation of output to strategise their businesses.
The point is, existing stocks or production get consumed and new supplies arrive in recurring cycles with corresponding volatility in values. If the data is comprehensively captured with full transparency, dynamic movements can be understood and interpreted. The government can take rational, rather than emotional, counter-cyclical measures, while trade can also position itself with the fundamentals of the market.
As of now, fragmented data is available with multiple agencies such as the ministry of agriculture, department of food and consumer affairs, Directorate General of Foreign Trade (DGFT), Director General of Central Statistics of India, Customs, Railways and the meteorological department.
The government also collates data from many associations, such as the Indian Sugar Mills Association for sugar and the Solvent Extractors’ Association of India for oilseeds, meal and oil. The Food Corporation of India’s records is the data source on rice and wheat stocks, while stocks in the local market are guesstimates or arrived through deductive analogies.
Industry and government estimates vary on the output of cane or sugar or oilseeds. In 2009-10, the country’s sugar output was raised from 15 million tonnes to 19 million tonnes, reflecting the shocking ignorance about a 27% variation. Hence, domestic prices plunged to unreasonable limits.
This year too, consensus on sugar output and carry-in stocks remains elusive. Likewise, in March 2012, the DGFT banned cotton exports by cancelling valid registrations due to confusion over surpluses for exports. Rice export was banned for four years (2007-11) following a fear syndrome over possible shortages. In fact, India has not imported rice for the last two decades.
While data on the quantum of import of edible oils and pulses is available with the customs department, the need is to put this in public domain. Price realisation by farmers for paddy, wheat (in non-procurement zones of FCI), pulses, seeds, cotton and so on are unavailable in public domain. However, trading houses and newswires generate many private reports.