Agriculture ministry differs with CSO over estimated growth of farm sector

Agriculture ministry differs with CSO over estimated growth of farm sector

 
The Ministry of Agriculture and Farmers Welfare has contended that the growth in real Gross Value Added (GVA) by the agrarian sector will not decline in 2017-18 vis-à-vis 2016-17 as has been predicted by the Central Statistics Office (CSO).

The first advance estimates of CSO show that the growth rate in GVA at basic price (at 2011-12 prices) of the 'Agriculture, forestry & fishing' sector is likely to dip from 4.9 percent to 2.1 percent between 2016-17 and 2017-18 (please consult table-1). Among other things, the press note dated 5th January, 2018 of the Ministry of Statistics and Programme Implementation (MoSPI) makes it clear that the CSO has calculated the advance estimates by extrapolating the first advance estimates of production of major kharif crops for 2017-18 and targets based on rabi sowings (please click here to access).
 
Table 1: First advance estimates of GVA at basic price by economic activity (at 2011-12 prices), in Rs. crore 
 
Table 1 Agricultural GVA growth
 
Source: Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, CSO, MoSPI, please click here to access
 
It must be noted that GVA is the difference between GDP and net indirect taxes. 
 
The press note of MoSPI further mentions that the information, which has been furnished by the Department of Agriculture and Cooperation (DAC) of agriculture ministry, indicate that the production of kharif foodgrains during agriculture year 2017-18 was 134.67 million tonnes as compared to 138.52 million tonnes during the same period in 2016-17. In case of livestock sector, estimates of production, mainly in the form of production targets for milk, egg, meat and wool from the Department of Animal Husbandry (Ministry of Agriculture) has been used.

It should be noted that the first advance estimates of production of foodgrains for 2017-18 was released on 22nd September, 2017. However, the first advance estimates of horticulture crops for 2017-18 was released much later viz. on 2nd January, 2018.

In its press release dated 7th January, 2018, the Ministry of Agriculture and Farmers Welfare has clarified that the data on crop coverage and resultant estimated production (as in August 2017), which has been shared by its Directorate of Economics & Statistics (DES) with the MoSPI, does not take into account the increased area coverage under kharif crops by December 2017 on account of improved south west monsoon rainfall in the subsequent months. Therefore, the concomitant increase in kharif production of foodgrains, oilseeds and commercial crops has been left out in the first advance estimates of national income by the CSO.

The estimates by DES, which has been shared with MoSPI, are largely "eye estimate" by state governments (by August 2017), says the press note of the agriculture ministry.

Due to delayed onset of south west monsoons and relatively poorer rainfall in the initial months of the entire monsoon period (June-September) in some places, the area coverage under different kharif crops as of August, 2017 was below that of the previous year. So the first advance estimates of national income by the CSO actually reflects poorer foodgrain production owing to computation based on area coverage under kharif crops as in August 2017 (and not as in December, 2017), says the agriculture ministry’s press release.

The agriculture ministry's press release mentions about the delay in onset of south west monsoons that caused lower area coverage under kharif crops and hence lower kharif crop production as of August 2017. However, a report entitled 2017 Southwest Monsoon End of Season Report by the India Meteorological Department (IMD) says that the monthly rainfall over the country as a whole were more than the long period average (LPA) during first two months of the monsoon season (104 percent of LPA in June and 102 percent of LPA in July) and were less than LPA during the last two months of the season (87 percent of LPA in August and 88 percent of LPA in September)
 
According to the 2016 Southwest Monsoon End of Season Report by IMD, the monthly south west monsoon rainfall over the country as a whole was 89 percent of LPA in June, 107 percent of LPA in July, 91 percent of LPA in August and 97 percent of LPA in September. 
 
Apart from kharif crop production, the Ministry of Agriculture and Farmers Welfare is also hopeful about rabi production due to a rise in area coverage under rabi crops till 5th January, 2018 (which is 58.6 million hectare).

The first advance estimates in case of horticulture shows that as of December, 2017, area coverage under fruits & vegetables stands at 24.92 million hectare, as against the previous year final of 24.85 million hectare. The country’s horticulture output is expected to be 305.4 million tonnes in 2017-18 as compared to 300.6 million tonnes in the previous year, as per the first advance estimates released on 2nd January, 2018.

Since the crop sector, which includes both agriculture and horticulture, account for nearly 60 percent of the entire ‘Agriculture, Forestry and Fishing’ sector's GVA, so the agriculture ministry is hopeful of a much higher GVA for the year 2017-18, when final estimate figures of the agrarian sector are released. 
 
The critical question is: If the DES (under the DAC, Ministry of Agriculture and Farmers Welfare), in the usual manner, is going to bring out the final estimates of production of major agricultural crops for 2017-18 in February next year, why should the agriculture ministry release an immediate clarification on the expected growth rate in real GVA originating from the agrarian sector for 2017-18, which has been recently predicted by the CSO (under MoSPI)?

It may be noted that the final estimates of the national income for the year 2017-18 would be released in May, 2019 (much later than February, 2019), if the present trend or cycle of press releases by MoSPI continues.
 

References

 
Press release: Strategy for High Agricultural Growth Rate, 2017-18 -Ministry of Agriculture & Farmers Welfare, Press Information Bureau, dated 7 January, 2018, http://pib.nic.in/newsite/PrintRelease.aspx?relid=175456  
 
Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI), please click here to access
 
Press release: First Advance Estimate 2017-18 and Final estimate 2016-17 for area and production of Horticulture Crops, released on 2 January, 2018, Press Information Bureau, Ministry of Agriculture & Farmers Welfare,
http://pib.nic.in/newsite/PrintRelease.aspx?relid=175158

Area and Production of Horticulture Crops - All India 2016-17 (Final) and 2017-18 (First Advance Estimates), please click here to access

First Advance Estimates of Production of Foodgrains for 2017-18, released on 22 September, 2017, Ministry of Agriculture & Farmers Welfare, please click here to access 
 
2017 Southwest Monsoon End of Season Report, IMD, please click here to access 
 
2016 Southwest Monsoon end of season report, IMD, please click here to access
 
Poor south west monsoon rainfall sours hope for good foodgrain output, News alert from Inclusive Media for Change, dated 10 November, 2017, please click here to access 

Cropping seasons of India- Kharif & Rabi, Arthapedia, please click here to read more 

Agriculture ministry expects upward revision of farm growth rates -Sayantan Bera, Livemint.com, 9 January, 2018, please click here to access 

Some red flags in the economy numbers: Agriculture is the most alarming -RN Bhaskar, MoneyControl.com, 7 January, 2018, please click here to access 

Bullish Agri Ministry expects higher GVA growth in 2017-18, The Hindu Business Line, 7 January, 2018, please click here to access 


Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak



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