Source: The post is based on the article “Why India needs timely and reliable data on crop production” published in the Indian Express on 3rd November 2022.
Syllabus: GS 3 – Agriculture
Relevance: About the credibility of NSO estimates
News: According to the National Statistical Office’s (NSO) latest GDP estimates for July-September, manufacturing contracts 4.3% and agriculture growing 4.6% year-on-year.
About the credibility of NSO estimates
The credibility of NSO estimates on Manufacture
The estimates of NSO is in stark contrast to the S&P Global’s Purchasing Managers’ Index (PMI). According to PMI, the manufacturing sector registered an expansion of 17 months in a row.
Reason for divergence: a) Most companies reported higher input costs in the recent quarter, this might be caused by the divergence between the NSO and PMI data, b) The PMI is based on a panel survey of just around 400 manufacturers. But the NSO’s estimates are based on gross value added.
|Read more: Improving Agriculture Yield in India – Explained, pointwise|
The credibility of NSO estimates on Agriculture
The estimates of Agriculture are in stark contrast with the other reports. Such as,
-According to the Agriculture Ministry’s first advance estimates, the production of kharif foodgrains and oilseeds (during July-September) was lower compared to last year.
-Most field reports suggested deficient precipitation in this monsoon, drought conditions in the Gangetic plain and excess rains in September-October would adversely impact the kharif crop.
-The high fodder and feed costs, and lumpy skin disease virus infecting cattle across many states have impacted non-crop segments such as livestock, forestry and fishing.
Overall, it’s difficult to reconcile the NSO’s agricultural growth estimate with the reported reality on the ground.
What should be done?
Timely and reliable information on crop production is a necessary public good — for policymakers as much as farmers and agri-businesses. Hence, India should,
Address the credibility of data: India is becoming a digital superpower. So, it should rely more on satellite imagery, remote-sensing vegetation indices and hand-held chlorophyll meters, instead of the traditional patwari-girdawari system for estimating crop area and yields.
Follow the approach of the US: The US Department of Agriculture releases monthly reports providing crop-wise output, domestic consumption, export and import forecasts and updates.
|Read more: India’s Agriculture Exports: Status and Challenges – Explained, pointwise|
Overall, India should understand the impacts of overestimation and underestimation of production.