Mughal-era practice behind unclear food output estimates? | Latest News India - Hindustan Times

Mughal-era practice behind unclear food output estimates?

By, New Delhi
Sep 30, 2023 11:57 PM IST

India's government has admitted that its estimate of wheat output for the 2022-23 season is under dispute, with grain traders arguing that production could not have been more than 102-103 million tonnes, compared to the government's estimate of 112-113 million tonnes. The discrepancy has led to high cereal inflation in the country, despite expectations of falling prices and substantial state-held stocks. The government is now planning to use technology-driven models to improve its crop estimates and ensure more accurate data in the future.

The government’s estimate of wheat output from the 2022-23 winter-sown season stands at a record 112 million tonnes. A bumper harvest should have led to falling prices, substantial state-held stocks and loosening trade regulations.

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HT Image

Yet, the world’s second-largest wheat grower is battling high cereal inflation for at least 12 months — normally a sign of shortages — puzzling policymakers. After a spate of harsh measures to cool prices, the government has now admitted that its production estimates are under dispute.

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The grain-trading industry doesn’t agree that the government’s wheat-output figures are right, pointing out that production this year couldn’t have been more than 102-103 million tonnes, which means a gap of nearly 10 million tonnes.

Addressing a meet of the Roller Flour Millers’ Federation of India on September 25, food secretary Sanjeev Chopra said the “divergence”, referring to the difference in estimates of the government and those of grain traders, needed attention. He acknowledged that such a huge difference in output figures needed to be reconciled and accounted for, for better inflation targeting.

The agriculture ministry largely depends on production data provided by states. Local revenue officials called “patwaris” and district agriculture officials still use outdated “eye estimates” and a revenue department-based system developed the Mughal emperor Akbar nearly 500 years ago to determine productions estimates, a former Union agriculture secretary said, declining to be named.

“Patwaris often don’t visit fields, use a visual reference of where it’s convenient to go and put out figures based on general feedback from farmers,” he said.

Chopra said there has been a mismatch between wheat production estimates of the 2022-23 crop year (July to June) of the agriculture ministry and private trade.

“We (the government) are reporting 112-113 million tonnes of wheat production while private trade is reporting 103 million tonnes. So, 10 million tonnes is a lot of divergence.”

“To ensure that this kind of disparity is kept to the bare minimum, the triangulation is going to happen,” the top official said, suggesting the government will go over its estimates and find the truth.

In the next couple of years, the government’s crop estimates would reflect more accurate figures, he said, referring to efforts now to switch to high-end technologies to estimate crop acreage and yields.

Getting production estimates right is critical for food management, fixing export targets and keeping prices affordable in a country of 1.4 billion people, 800 million of who depend on subsidized grains handed out through government-procured food stocks.

The agriculture ministry is now preparing to use a fleet of technology-driven models to estimate sowing and yields for reliable data. From this kharif or summer season onwards, the ministry will try out a programme called Yield Estimation System based on Technology (YES-Tech) to gather data on rice and wheat, an official said, requesting anonymity.

The programme will rely on satellite and remote-sensing-based data to determine production.

However, as of now, the YES-Tech programme will be aimed primarily for estimating crop losses for better implementation of a flagship farm insurance scheme, PMFBY.

The problem of unreliable data is not new. In 2016, the government estimated 93.5 million tonnes of output of the grain despite poor sowing and severe moisture stress following a back-to-back drought. Private traders estimated at least 5 million tonnes lower output than the official figure and they were proved right, as wheat prices soon started rising. This led to the government abolishing the 10% import duty to spur imports.

The danger of unreliable data is that “one cannot accurately plan for traders, consumers and farmers”, according to Prof T Mani, a retired economist with the Tamil Nadu Agricultural University.

The current wheat crisis – marked by high prices – has its roots in the 2022 spring harvests and stoked partly by unreliable output estimates. A prolonged heatwave in March that year cut output to about 106 million tonnes from an earlier official estimate of 111 million tonnes.

In April 2022, the government said the country was targeting to export 10-15 million tonnes of wheat to plug a supply gap created by the Russia-Ukraine war. Soon, wheat exports rose amid a global shortage. However, within a month, the government had to ban wheat export after finding that output was lower than estimated and government stocks fell to a 15-year low. That ban is still place. Shipments of non-basmati rice were also barred in July.

“Cereal prices are not falling despite many measures by the government because overall output is low,” said CP Gupta, the proprietor of Cheshta Enterprises, a Kota-based wheat-trading firm.

A series of interventions by the government to boost supplies hasn’t been effective in controlling prices, such as caps on how much quantities of wheat wholesalers can stockpile. To drive down wheat prices, the government also offered its own wheat at a substantially reduced price to traders, which shaved off 45,000 crore worth of potential income of farmers, according to a paper last week by economists of the Indian Council for Research on International Economic Relations (ICRIER), a New Delhi-based think tank.

Food secretary Chopra said, had the government not taken these measures, food inflation would have been even higher and the government had sufficient stocks of both rice and wheat to intervene in the markets to cool prices.

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