It146;s a sad fact

Our official number crunchers may be statisticians and economists, many of them are first rate in their jobs, but at heart and in their soul they are babus. So they never ever tell you the good news at first shot. Notice how GDP figures always get revised upwards. This is better than China, of course, where the suspicion is always about officials padding up figures. But the sarkari Indian habit of being reflexively pessimistic isn8217;t without its downside either. Take the wheat crop. The agriculture ministry has just revised annual production estimate to 73.7 million tonnes from 72.5 million tonnes. But all sorts of evidence, anecdotal and otherwise, suggests the final figure will be better. It also seems the agriculture ministry de facto agrees. But a de jure announcement won8217;t come.

What this is doing is that it is reinforcing the narrative about a shortage. Last year8217;s wheat crop was low, 69 million tonnes. Since then, the story has been of impending crisis. Government announcements on imports were followed by, when the inflation scare hit the political class, a ban on forward trading. When facts on the ground indicate wheat output will be more than healthy, surely it would make economic and political sense to inject a dose of perfectly justified optimism. As one of our edit page columnists argues today, farming has to be seen as a basket of opportunities. Wheat procurement by private parties, as our series on the wheat belt shows, is changing economic dynamics. Paddy needs some intelligent government support to reinvent itself as the farm growth driver of tomorrow. Pulses can emerge as a market winner, given the huge domestic demand. Or take GM crops. When has the government promoted the fact that GM farming is an income and employment booster? Punjab, Karnataka, Gujarat, Tamil Nadu have all successfully adapted to Bt cotton. But the dominant discourse is defined by the kind of attitude seen in Andhra Pradesh, which banned Bt cotton last year; the case is being heard now.

The net result of pessimism is that policy corrections don8217;t get political traction. This would be the time, given good news on wheat, to rethink the ban on forward trading. Indeed, given a good crop, a neat case can be made for price projections that forward trading provides. But how will the government make the case if it refuses to consider the evidence?