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Drumbeat: Ad Buzzaar
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Monday, May 25, 1998
Statistical decline
It may appear odd that agricultural output data for 1997-98 gets reported six weeks after the close of the financial year. The fact is that the agricultural year is July-June and the crop output data get compressed into the GDP estimate for the fiscal year that has gone by. Thus, current data showing lower output for a variety of crops have raised doubts whether GDP growth for 1997-98 will be even lower than the estimated 5.2 per cent for 1997-98. The issue is how good are the data for agricultural output. Current data are described as preliminary estimates. This means agricultural output for 1997-98 may be revised upward or downward. This suggests that the entire basis for arriving at crop estimates is less than firm. There have been reports that crop cutting surveys are in shambles. The data churned out are guesstimates. One would have thought that the Planning Commission would be prodding the agriculture ministry, CSO and other agencies to set right the data collection machinery. But that is not so; YojanaBhavan has gone into hibernation.The preliminary estimate for wheat shows a decline in output to 66.5 million tonnes in 1997-98 from 69.3 million tonnes in 1996-97. Will this pull down the GDP growth for 1997-98? The reported decline in volume may not have correspondingly depressed the value addition, not in these times of procurement bonus prices. Indeed, in a bad year it is likely that a rise in prices will prevent an erosion in the contribution of wheat to GDP. But there are conundrums. The output of coarse cereals took a beating, apparently because of a shift in area to oilseeds. But oilseeds output too declined in 1997-98. Curiously, despite lower output, edible oil prices are weak. So, are output declines exaggerated by statistical defaults? It is difficult to reconcile the reported wheat output decline of 1997-98 with the current rush by farmers to sell wheat to the procurement authorities. One estimate is that procurement in the current year so far has been close to 50 per cent more than in thecorresponding period of last year. Inadequate agricultural statistics suit the politicians; they use them to lobby for price incentives and subsidies. But the policy maker finds himself at bay: why are there area shifts to crops that fetch low prices? How to push for high growth in agriculture -- which requires a boost to commercial production of fruits and vegetables -- if basic commodities like cotton, oilseeds, sugarcane and cereals are under pressure? Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.

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