Business Daily from THE HINDU group of publications
Tuesday, Jul 18, 2006
Agri-Biz & Commodities - Wheat
Wheat output estimate pruned to 69.48 m tonnes
New Delhi , July 17
In what raises questions over the credibility of official agricultural intelligence gathering, the Union Government has further lowered its estimate of the country's wheat production during 2005-06 to 69.48 million tonnes (mt).
In its initial `second advance estimate' of foodgrain production for 2005-06, announced on February 22, the Agriculture Ministry had projected a wheat output level of 73.06 mt.
This figure was revised downwards to 71.54 mt in the `third advance estimate' that was released on May 5.
And now, the `fourth advance estimate' of July 15, released here on Monday, puts the number even lower at 69.48 mt.
The difference of almost 3.6 mt between the initial and the latest estimates is significant on two counts.
Firstly, it shows that the Government had vastly underestimated the shortfall in the country's wheat production, which explains its belated announcement of a Rs 50-per quintal bonus (over and above the minimum support price of Rs 650 per quintal).
As a result, the Food Corporation of India (FCI) was able to procure hardly 9.3 mt of wheat, whereas timely announcement backed by a proper assessment of the crop size could have led to additional purchases of 3-4 mt.
Secondly, the private trade all through had maintained that production would be in the 68-69 mt range, which is close to what the Government is now estimating.
In other words, the private sector's market intelligence has proved far superior to that of the official statistical machinery.
Total foodgrain output
The total foodgrain production during 2005-06 as per the "fourth advance estimates" is now put at 208.30 mt, against 210.01 mt and 209.32 mt in the `third' and `second' advance estimates, respectively.
The corresponding figures are 91.04 mt (89.88 mt and 87.86 mt) for rice, 34.67 mt (34.67 mt and 34 mt) for coarse cereals and 13.11 mt (13.92 mt and 14.41 mt) for pulses.
In the case of commercial crops, the problem has been more of underestimation. The `second advance estimate' had assessed sugarcane production at 266.88 mt, which was revised upwards to 273.16 mt in the `third advance estimates' and now to 278.39 mt. This is further confirmation of the likelihood of an all-time high sugar output in the ensuing 2006-07 crushing season (October-September).
Similar successive upward revisions have been made for cotton (from 16.45 million bales of 170 kg each to 18.93 million bales and 19.57 million bales) and oilseeds (from 26.37 mt to 26.70 mt and 27.73 mt).
The rapeseed-mustard crop of 2005-06 is now placed at a record 78.87 lakh tonnes (lt), which is substantially higher than the preceding estimates of 71.69 lt and 76.90 lt.
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