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Why India needs timely and reliable data on crop production

The costs of overestimation and underestimation of production aren't small. Accurate data is a necessary public good – for policymakers as much as farmers and agri-businesses

The larger problem that needs addressing is credibility of data.

Manufacturing contracting 4.3 per cent and agriculture growing 4.6 per cent year-on-year have been the two major surprises in the National Statistical Office’s (NSO) latest GDP estimates for July-September. The de-growth in manufacturing is in contrast to the S&P Global’s Purchasing Managers’ Index (PMI) data that shows the sector registering expansion not only during the quarter, but for 17 months in a row to November 2022. However, the PMI is based on a panel survey of just around 400 manufacturers. Also, the NSO’s estimates are of gross value added. In other words, the value of output minus value of inputs used in production. Most companies reported higher input costs during July-September, leading to compressed margins. That, to an extent, can probably explain the divergence between the NSO and PMI data as far as manufacturing goes.

The same cannot be said about agriculture — where the growth for the last quarter was the highest since January-March 2020. This flies in the face of the Agriculture Ministry’s first advance estimates pegging the production of kharif foodgrains and oilseeds (mostly sown and raised during July-September) lower compared to last year. Most field reports, too, suggested that deficient precipitation in June, drought conditions in the Gangetic plain states and excess rains in September-October would adversely impact the kharif crop. The only way agriculture could still have grown by 4.6 per cent is on the back of non-crop segments such as livestock, forestry and fishing. But this again seems improbable in the light of high fodder and feed costs, aggravated by the lumpy skin disease virus infecting cattle across many states. These have contributed to sluggish milk procurement by dairies, forcing them, in turn, to raise both prices paid to farmers and charged to consumers. Overall, it’s difficult to reconcile the NSO’s agricultural growth estimate with reported reality on the ground. The benign effects of an extended monsoon and a normal winter, if at all, will be reflected only in the coming quarters. The prospects for the current rabi crop seem good, though one cannot really say till March.

The larger problem that needs addressing is credibility of data. Timely and reliable information on crop production is a necessary public good — for policymakers as much as farmers and agri-businesses. A country that sees itself as becoming a digital superpower should rely more on satellite imagery, remote-sensing vegetation indices and hand-held chlorophyll meters, as opposed to the traditional patwari-girdawari system, for estimating crop area and yields. The model here should be the US Department of Agriculture, which releases monthly reports providing crop-wise output, domestic consumption, export and import forecasts and updates. The costs of overestimation and underestimation of production aren’t small — which was clearly seen with last year’s wheat crop.

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First published on: 03-12-2022 at 06:10 IST
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