Posts Tagged ‘cereals’
With only just over a week remaining of the usual June to September monsoon season, the first estimates of crop production for the year 2016-17 have brought welcome news to Bharat.
The estimates are the first in the normal series of four which are released through the crop year 2016-17 by the Ministry of Agriculture ad Farmers’ Welfare. What they show is important for two reasons.
First, they come against doubts that have been raised in various quarters since the last week of August about the adequacy of the 2016 summer monsoon. Second, they show that the effects of the drought and drought-like conditions that gripped a number of districts of Bharat from March to May have not affected crop production. These are important messages both.
Coming to the numbers released, the production of kharif rice is on target: 93.88 million tons (mt) against the target of 93 mt. The production of ‘coarse cereals’ (which includes jowar, bajra, maize, ragi, small millets and barley) is on target: 32.46 mt against the target of 32.50 mt. The production of pulses (which includes tur or arhar, gram, urad, moong, and other kharif pulses) above target: 8.7 mt against the target of 7.25 mt.
The overall outlook then for kharif season production is foodgrains of about 135 mt (final amounts will be subject to revision as states confirm their data).
Quietly, the Ministry of Agriculture has issued its first estimate for the crop year 2013-14. Food price inflation in every single state and union territory has been rising over the last four to five years, and with the furore over the WTO Ministerial Conference just over, and with promises to keep over the National Food Security Act, the big bottom-line should have been accompanied by a number of careful statements from ministries and departments concerned with cultivation and with the supply of food.
These would be the Ministry of Consumer Affairs, Food and Public Distribution, the Ministry of Agriculture itself, the Ministry of Food Processing Industries, the Ministry of Commerce (whose minister represented us at the WTO meeting), the Ministry of Rural Development (under which the gigantic rural employment guarantee programme now includes work on agriculture, and safeguards against leaching labour away from the fields when it is needed in those fields), and so on. But, we have a 259 million ton bottom-line number for the country for 2013-14 and there’s no elaboration of it whatsoever from any chamber of the government.
Here are the key numbers in million tons (with the first advance estimates, where given, in parentheses). Rice 105 (92.32), wheat 92.5, pulses (which is tur, gram, urad, moong, other rabi and kharif pulses) 19 (18.02), coarse cereals (which is jowar, bajra, maize, ragi, small millets, barley) 42.5 (43.99). To this I have added vegetables and fruit – these are for reasons I cannot fathom (but have suspicions about) still omitted from the targets and from the estimates; this happens four times a year, and they are released with a dullness and lethargy that belie the frantic scenes in the districts whenever a fair price shop is restocked. [You can get the xlsx file with the latest data here.]
Using averages of all-India production of vegetables and fruit for the last three years available (these are 2012-13, 2011-12 and 2010-11) I can supply what could serve as ‘targets’ for horticultural production as follows: vegetables 154.1 mt, fruit 76.3 mt. But, to hint at my suspicion, this is lucrative export produce and the government agency, the Agricultural and Processed Food Products Export Development Authority (APEDA), working in concert with the Ministry of Food Processing Industries, is responsible for converting our vegetables and fruit into produce shipped off in containers, or into raw material for India’s growing ‘food service’ industry (awful term, as if we needed yet another service to add to the inequitous burden of the info-tech and financial services) and the domestic organised retail trade (yes that means Walmart, Tesco, Auchan, Carrefour, Metro and who knows who else).
To what extent do cereals prices pull up (or depress, if at all they do) the FAO food price index? This chart shows the relationship between the main index and the cereals sub-index. As we can see from the shaded areas (which correspond roughly to the 200 mark), the steady steep rise in the cereals index, from around 2007 August onwards, pulled first the cereals sub-index and then the FAO food price index over 200, and kept them above for about nine months. The same phenomenon took place from 2010 July onwards, as a soaring cereals sub-index shot above the main index and pulled it up above 200 in 2010 October, and has kept both above 200 ever since.
Now FAO has said (in its global information and early warning system on food and agriculture, GIEWS) that the export prices of grains has risen sharply in 2012 July with maize prices at record levels. Export prices of maize increased by 20% in the first three weeks of July compared to their June level. The benchmark US maize price averaged USD 322 per tonne reaching a new record high. “Prices were underpinned by continuous concerns about the impact of hot and dry weather conditions on yield potential of the 2012 maize crop in parts of the United States,” said FAO. And now has come the downward revision of the US official 2012 maize production forecast.
The question for us is: how will the the FAO Food Price Index, which in June fell for the third consecutive month, respond? The FAO Food Price Index (FFPI) averaged 201 points in June 2012, down 4 points (1.8%) from a May value of 205 points. After the third consecutive month of decline, the June value of the index was 15.4% below the peak reached in February 2011. “Continued economic uncertainties and generally adequate supply prospects kept international prices of most commodities under downward pressure, although growing concerns over adverse weather sustained prices of some crops toward the end of the month,” said the FAO.
In 2012 June, the FAO Cereal Price Index averaged 221 points, unchanged from May and down 45 points (16.8%) from its peak of 265 points in April 2011. Grain prices were very volatile in June, with weather as the main driver. “After a generally subdued situation during the first half of the month, markets moved up in the second half amid deteriorating crop prospects, most notably for maize in the United States,” said the FAO.
Finally, FAO’s cereal supply and demand brief for 2012 July lowered the forecast for world cereal production from last month, which is likely to result in a smaller build-up of world inventories by the end of seasons in 2013 than previously anticipated. “While the bulk of the increase in cereal production from last year is still expected to originate from a significant expansion in maize production in the United States, the deteriorating crop conditions due to the continuing dryness and above-average temperatures in much of the major growing regions of the country have dampened this outlook,” said the brief.
Moreover, world wheat production is heading toward a contraction of about 3.2%, to 678 million tonnes, or 2 million tonnes less than reported in June, as downward adjustments in Australia, China and the Russian Federation more than offset upward revisions in the EU and Morocco. Where rice production in 2012 is concrened, the FAO estimate is it will grow by 1.6% to 489.1 million tonnes (in milled equivalent), which compares with a previous forecast of 490.5 million tonnes. The small reduction mainly reflects some deterioration of prospects in a few major producing countries, especially India.
The FAO has released its latest food price index data, and the central message for this month is: little change from the last month. The question for us, as we read about and hear about steadily rising food price inflation in the countries of the South, is: why is the FAO food price index not capturing real inflation for these populations?
This chart is a way to rectify that lack. In this, I have used the index data as the composite (food) plus the components (meat, dairy, cereals, oils, sugar) directly from the data, but have re-based them.
I have used the monthly data from 2008 January to 2012 March, and re-based them (six series) on each of their minima for the period. Thus, the minima are: Food, 141.3 in 2009 Feb; Meat, 120.4 in 2009 Feb; Dairy, 114.3 in 2009 Feb; Cereals, 151.2 in 2010 June; Oils, 127.3 in 2008 December; and Sugar, 166.7 in 2008 December.
The current readings for all six series (2012 March) are: Food 215.9; Meat 178.2; Dairy 197.0; Cereals 227.0; Oils 244.9; Sugar 341.9.
What this chart does is show the variation by month from the minimum for each series for the period. It is another way of looking at how the indices have moved from a point of low reference in the recent past, and to my mind is more evocative of the real situation in rural and urban food markets in the South.
The April release can be found here. And this is what FAO’s usually bland commentary on the latest month’s movements is: “The FAO Food Price Index (FFPI) averaged 216 points in March 2012, virtually unchanged from 215 points in February. Among the various commodity groups, only oils prices showed strength, compensating for falling dairy quotations, while the indices of cereals, sugar and meat prices were largely unchanged from last month’s level.”
The October-November 2010 issue of Himal Southasian is out and includes a contribution from me. The issue is themed on agriculture and ruralscapes in Southasia (that’s how Himal spells it, one word). Here’s an extract from my article:
India’s government and its agricultural research establishment are forging new compacts with the private sector food industry. Their reasons for doing so are the breakdown of agricultural extension and the need for food infrastructure. Yet low-input organic farming yields sufficient produce in tune with local conditions, and is well suited to smallholder rural farming households. This benefit is opposite to the ‘agritech’ demands of food industry powers in India, and at risk is the farm livelihood of the country’s massive majority of farmers.
In July, India’s agriculture minister, Sharad Pawar, talked about the role of the private sector in agricultural research and human-resource development in the country’s food industry. His audience was made up of participants of an ‘industry meet’ put up by the Indian Council of Agricultural Research (ICAR), assembled to discuss four issues: seed and planting material; diagnostics, vaccines and biotechnological products; farm implements and machinery; and post-harvest engineering and ‘value addition’.
Pawar explained the conventional approach of public-sector agricultural research and development, which has been to take responsibility for setting priorities, mobilising resources, research, development and dissemination. He then explained that agricultural extension – the education of farmers in new techniques and technologies, which has been neglected for several years – is ‘no longer appropriate’. Instead, he urged the adoption of public-private partnerships, through which public-sector institutes (such as those in the ICAR network) can ‘leverage valuable private resources, expertise or marketing networks that they [the farmers] otherwise lack’.
The so-called area, production and yield (APY) model of measuring agriculture in India has long been the dominant one, focusing on growth in irrigated area, crop production in tons and yield per hectare. In following this model, central and state planners, leveraging the reach and influence of the national agricultural research system, have automatically tended towards technology as an enabling factor and the economics of the organised food industry. This strong bias exists as a legacy of the successful years of the Green Revolution, when the massive laboratory-led creation of high-yield varieties proceeded in step with massive irrigation programmes and farm mechanisations schemes. In the process, they have turned the needs of small and marginal cultivating households into programmes and schemes, so that these small-scale farmers become ‘consumers of technology’ rather than being recognised as holders of traditional agricultural knowledge.
These sustainable agricultural systems contribute to the delivery and maintenance of a range of public goods such as clean water, carbon sequestration, flood protection, groundwater recharge and soil conservation. But since they cannot help to achieve short-term profit-oriented goals, both the commercial effort of the National Agriculture Research System and the private sector ignore them. Finally, the cost-benefit of conservation of resources can be determined by the scarcity value of those resources. For instance, will urban food consumers be willing to pay for watershed protection in a district from which they import food?
The only way to get a positive answer from this question is by investing in public education, and by building it into public policy at an institutional level – where it immediately runs into political and business interests. The development of community-supported organic agriculture in India can provide an alternative, which will depend more on the ability of associations of organic farmers to organise, rather than on state support.
India’s organic farming systems. These grow a variety of cereals, tubers, leafy vegetables, fruits and tree crops without chemical fertiliser and pesticide and largely depend on saved seed. There are well-established biological and energy benefits of organic and agro-ecological farming that, under the growing shadow of climate change and energy scarcity, become even more compelling for farming communities.
Here in one convenient Excel file is the annual data from the release of Advance Estimates of crop production for India. This is from the Ministry of Agriculture, Government of India, and is usually posted on the website of the Department of Agriculture and Cooperation.
The file contains the annual estimates for 1997-98 to 2006-07, two advance estimates for 2007-08 and the full four advance estimates for 2008-09 and 2009-10. The Ministry, just to make things more interesting for the toiling masses, posts the data as a grubby two-sheeter pdf image. I’ve been careful about the numbers.
These estimates are for all major crops covered by the Ministry and in rabi and kharif where applicable: rice, wheat, jowar, bajra, maize, ragi, small millets, barley, coarse cereals, cereals, tur, gram, urad, moong, pulses, kharif, rabi, groundnut, castorseed, sesamum, nigerseed, rapeseed, mustard, linseed, safflower, sunflower, soyabean, oilseeds, cotton, jute, mesta and sugarcane.