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India’s food price inflation is no surprise

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Reports on the new evidence of price increases for staple foods in India have evoked surprise and a variety of responses from economic analysts. Reuters has reported that inflation “unexpectedly hit a seven-month high in September as food prices climbed” because the “wholesale price index (WPI), the main inflation measure, climbed to 6.46 percent last month”.

If tomato, potato and onion show the behaviour of all vegetable prices, the new food inflation peak is no surprise at all.

If tomato, potato and onion show the behaviour of all vegetable prices, the new food inflation peak is no surprise at all.

Supplied by the views from the financial markets and industry sources, and supported by a government position of prices and food supply that is predictably optimistic, reports in the mass media claim that inflation is expected to come down in coming months.

Business Standard reported that “the simultaneous rise in WPI- and CPI-based inflation in September can be explained by the lag effect of rising food prices on consumer prices. The newspaper quoted a chief economist of the State Bank of India who said: “Consumer price inflation is correcting the huge gap we had witnessed in food items at retail and wholesale levels in the previous months.” It also quoted an economist with a credit rating agency, CARE Ratings, who said the divergent trend in July and August could be explained by the fact that retailers couldn’t increase prices at the same rate as wholesalers and, therefore, had to squeeze their margins.

The Hindu reported that “headline inflation unexpectedly touched a seven-month of 6.46 in September riding on the back of a whopping 323 per cent increase in price of onion followed by all round hike in price of other fruit and vegetable items”. This newspaper said that the latest data released by the government on Monday put the food inflation at 18.40 per cent in September over the same month last year.

The three pairs of charts you see here describe the prices of tomato, potato and onion as recorded by the retail price monitoring cell of the Department of Consumer Affairs, Ministry of Food and Consumer Affairs, Government of India. The cell collects retail prices of 22 food items from 57 urban centres, and these are the monthly averages from 2009 January to 2013 September.

The monitoring cell does not collect the prices of common vegetables (such as brinjal, cauliflower or pumpkin) or leafy green vegetables, hence these will serve as indicative proxies that describe the movements of vegetable prices in Indian urban retail food markets over the measured period.

The charts with the full set of price trendlines for all 57 centres are dense to look at, hence I have simplified them to three trendlines each: an average, the price of the 80th percentile of the centres, and the price of the 20th percentile of the centres. Doing so helps preserve the overall trend over the period measured and also helps more clearly display the difference between the upper and lower bounds of the variation in price amongst the set of urban centres.

The tomato chart shows periodic spikes from mid-2010 however the peak of 2013 July dwarfs all others. The potato chart shows the previous peak being during 2009 October, but in terms of the persistence of high price the period from 2012 August till the present is the longest since 2009 January. The onion chart records the previous spike during 2010 December to 2011 January, which has been topped during the current spike that began in 2013 June.

The tale of the charts is that even for items that go through cycles, like vegetables, the overall trend is upwards and this upward trend is at a rate faster than the wage increases for agricultural and rural labour, for those working in the informal urban sector, and is a rate that is only partly offset by any dearness allowance (if that old mechanism is still used).

For all those who are said to be knowledgeable on food price and the causes of inflation – the ministries of agriculture, of commerce and of food processing, the industry associations, the bankers and financiers, the food and retail industry – the current food inflation spike is no surprise at all, it was expected as the festival season has begun. The difference now is that with every such season, the new base price for our food staples is pushed to higher level, further squeezing household budgets that are not reinforced by bonuses.

The cereals, oils and sugars have been far more predictable in their rise for the last five years. Their price rise in inevitable given the growth of the retail food industry, the processed foods industry, the rise in the price of fuel, and the rise on the prices of fertiliser and pesticides. Just as the so-called ‘carrying cost’ of PDS foodgrain is derided as being inefficient by the private sector, they too bear a carrying cost – inventory of processed food and inventory of primary crop used for such food – which is concealed in the price the consumer pays.

It is only local food networks that choose organic crops, supply locally and insulate themselves from the organised food profiteers that can free themselves from the pain of India’s steadily rising food price inflation.

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India’s onion panic

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The swings and spikes of the Maratha onion. The red line is the price per quintal, which is on the scale to the right. The quantities are in tons, on the scale to the left. Both price and quantity are for onions in Maharashtra, for the period 2006 to 2013 June. The data is from the National Horticulture Mission.

The monthly swings, spikes and tears of the Maratha onion. The red line is the price per quintal, which is on the scale to the right. The quantities are in tons, on the scale to the left. Both price and quantity are for onions in Maharashtra, for the period 2006 to 2013 June. The data is from the National Horticulture Mission.

We onion eaters shudder when we remember the annus horribilis of 2010, when onion prices rose to a monthly average of about Rs 2,400 a quintal (that’s 100 kilograms).

Now, our familiar red allium cepa is lightening our slim purses by 70 rupees for a kilo. Will the rest of 2013 turn out to be another onion-scarce quarter? I should hope not. The chart tells us that the price peak of 2010 accompanied a dreadful shortfall in the supply of the pungent stuff, but surely, the low supply levels of mid-2008 and late 2007 were even more severe, as my chart tells us.

More worrying is the upward flight of that red line in this last month, which is now at or around a level second only to the peak of 2010.

The popular press hasn’t noticed the curious trend (perhaps editors and reporters nowadays must consume far too much pizza, pasta, cola, burgers and so on, untutored in the ways of the jowari roti, the one-half of a juicy red onion, and a handful of ‘lasanyache chutney’, as one says in Marathi, which is the unforgettable district staple of chutney made from ground garlic, red chillies and coconut; more the losers they then.)

Business Today has reported that “industry experts are perplexed by the trend” of the rise in onion prices (what’s their expertise worth I wonder), the Business Line warned that “after racing ahead of the rupee, onion could turn costlier than petrol”, the New Indian Express found Food Minister K V Thomas doing his bit to calm the nation by saying that “there’s no cause for panic”, and the Business Standard’s reporter in Lasalgaon, in the district of Nashik in Maharashtra, which is reckoned to be Asia’s largest onion market, nearly fainted away when the price shot up to Rs 5,300 a quintal.

Written by makanaka

September 18, 2013 at 11:29

The day India said ‘yes’ to Wal-Mart

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Update – The real nature of the neoliberal economy of India has become clearer with the decision – against the run of public opinion and against the evidence from the agricultural and food sectors – to permit opening up the retail sector.

Since the decision was taken, the central government has spared no effort in a cynical and devious campaign to claim that permitting foreign direct investment in retail will benefit farmers and consumers. On Sunday, 27 November 2011, large advertisements were released in newspapers proclaiming the benefits of this decision. Nothing is further from the truth. India’s urban households, those eking out livelihoods from informal work and precarious manufacturing sector jobs, recognise the untruth and see the evidence in the 10%-15% annual food inflation. Our trade unions know this and our left parties know this.

Ranged against this population, rural and urban, are the ministries and industries who see in the permission a new means to control access to food and the provisioning of food. That is why I support the opposition represented by the Communist Party of India (Marxist), whose concerns reflect those of this broad majority.

The CPI(M) has said correctly that this decision “will destroy the livelihoods of crores of small retailers and lead to monopolisation of the retail sector by the MNCs”. The party’s statement said: “Coming in the backdrop of persistent high inflation, growing joblessness and agrarian distress, this decision shows the utterly callous and anti-people character of the UPA Government. The Government seems to be more eager to meet the demands of the US and other Western governments and serve the interests of the MNCs like Walmart, Tesco and Carrefour, rather than protect those of its own people.”

India’s central ministries – now even further disrobed to reveal their predatory nature as instruments of the country’s business satraps – have held up the flimsy excuse that conditions imposed will safeguard the farmer, consumer and small retailer. This is lies.

The restriction that foreign retail outlets are limited to operating in cities of over 1 million population is meaningless because those are precisely the places where the MNCs want to go, to tap the lucrative segment of the market. It is in these cities – there are 53 cities with populations of over a million – that small retailers are mostly concentrated. India has the highest shopping density in the world, with 11 shops per 1,000 persons – these have evolved as neighbourhood suppliers and represent a cultural integration of small supplier and household familiarity.

The result is a rich density of trusted small retail – India has over 12 million such shops and these employ directly over 40 million persons. Well over 95% of these shops are run by self-employed persons in floor areas of under 500 square feet (about 48 square metres). It is these small shopkeepers in urban areas who fear for their future with the now-sanctioned entry of the MNC retailers. International experience shows that supermarkets everywhere invariably displace small retailers. Small retail has been virtually wiped out in the developed countries like the US and Europe. South East Asian countries had to also impose stringent zoning and licensing regulations in order to restrict the growth of supermarkets, after small retailers were getting displaced.

Then there is the cunning untruth that the condition for making at least 50% of the investment in ‘backend’ infrastructure will benefit rural populations, as this is said to lead to more cold chains and other logistics, benefiting the farmers. International experience has, however, shown that procurement by MNC retailers do not benefit the small farmers – we have seen this in India despite the specious and manufactured ‘case studies’ produced by India’s management schools (the several worthless and compradorist Indian Institutes of Management and their similarly worthless competitors). Over time, smallholder farmers receive depressed prices and find it difficult to meet the arbitrary quality standards. Allowing procurement by MNCs will also allow the central government to reduce its own procurement responsibilities, and this will directly affect the food security of those millions of rural and urban households which depend India’s public food distribution system.

2011/11/25 – This is a turning point for India’s economy. The central government has allowed foreign investment up to 51% in the retail sector for ‘multi-brand’ ventures, and has allowed 100% foreign investment for single brand retailers.

With this permission, the ruling United Progressive Alliance has ignored utterly the concerns of hundreds of representations made over the last year by small traders and wholesalers, and by grocery shops’ assocations all over India, against the entre of foreign direct invetment in the retail sector. The ruling United Progressive Alliance has also ignored the needs and conditions of hundreds of thousands of smallholder farming families, who will from now on be steadily exposed to increasing levels of coercion to submit to corporate and industrial farming pressures, or to quit cultivation and join the masses of informal labour in urbanising towns and cities.

India’s powerful business and indutries associations – the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) – have vigorously for the last two years been manoeuvring the ruling political alliance towards this position. They have been aided substantially by representations from the countries and regions who have the most to gain from this permission being given – the USA and the European Union.

The so-called economists and analysts who are regularly polled by the business media and whose pronouncements are used to justify the progression of policy towards such permission, are making a variety of claims about the effects the expected foreign investment will have on India. They are saying that this “much delayed reform” will help unclog supply bottlenecks and help ease food inflation, that it will benefit farmers who can get better prices for their produce and will bring in international expertise to streamline supply chains in India.

This is rubbish meant to distract. The big retail corporations have for years been demanding entry into a country which is estimated to have a retail sector whose annual sales are said to be around US$450 billion. But this is a sector populated by tens of thousands of tiny family-run shops that account for 90% of this enormous volume of sales. This is a turning point for India’s economy, for it signals the start of yet another struggle to first block, and then throw out the retail conglomerates.

Here are some of the many news stories on this important matter:

Moneycontrol.com – ‘Don’t expect investments to flow instantly: Bharti Walmart’ – After a long wait, the government has finally allowed 51% foreign direct investment (FDI) in the multi-brand retail. It has also decided to raise the cap on foreign investment in single-brand retailing to 100% from the current 51%. …

The Hindu – ‘Cabinet approves 51 per cent FDI in multi-brand retail’ – In a bid to remove the impression that UPA II was suffering from “decision making paralysis” and kicking off the second generation reforms, the Union Cabinet on Thursday gave its approval to allowing 51 per cent foreign direct investment (FDI) in …

Shanghai Daily (subscription) – ‘India to allow global chains to open multi-brand retail stores’ – MUMBAI, Nov. 24 (Xinhua) — India’s cabinet has given the green light to foreign investors to take up to 51 percent stakes in multi-brand retail stores later Thursday after a meeting chaired by Prime Minister Manmohan Singh, said a report by the …

MarketWatch (press release) – ‘Government of India Unleashes Potent Phase II Reforms’ – WASHINGTON, Nov 24, 2011 (BUSINESS WIRE) — The US-India Business Council (USIBC) today hailed India’s steady progress in advancing major economic reforms with the Cabinet’s approval of opening India’s vast multi-brand retail sector to foreign direct …

Reuters India – ‘India opens supermarket sector to foreign players’ – India threw open its $450 billion retail market to global supermarket giants on Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia’s third-largest economy …

Wall Street Journal – ‘Carrefour Welcomes India’s Decision To Open Multi-Brand Retail Market‘ – PARIS (Dow Jones)–French retail giant Carrefour SA (CA.FR) said Thursday it welcomed the Indian government’s decision to open the country’s multi-brand retail market to foreign investment. “Carrefour will follow with attention the finalization of the …

Voice of America – ‘India Opens Retail Sector to Foreign Supermarkets’ – November 24, 2011 India Opens Retail Sector to Foreign Supermarkets VOA News India’s Cabinet has approved a plan to open up the country’s $450 billion retail sector to foreign supermarkets, a reform that could unclog supply bottlenecks that have kept …

Wall Street Journal – ‘India Unlocks Door for Global Retailers’ – MUMBAI—India paved the way for international supermarkets and department stores to establish joint ventures, a major step in opening one of the last great consumer markets that has been off-limits to many of the world’s biggest …

Hindustan Times – ‘Left and Right sharpen knives for FDI battle’ – The Cabinet’s approval of 51% FDI in multi-brand retail is likely to flare up into a major political controversy with the main opposition parties gearing up to oppose it. While BJP leaders Sushma Swaraj and Arun Jaitley jointly condemned any such move …

Namnews – ‘Government Opens Up Country’s Retail Market’ – It’s official – the Indian retail market is now open to international chains, setting the stage for a major change of the local industry. Earlier today, the Indian government approved Foreign Direct Investment of up to 51% in multi-brand retail, …

Bloomberg – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores …

indiablooms – ‘India opens retail to foreign players’ – New Delhi, Nov 24 (IBNS): India on Thursday decided to allow foreign direct investment (FDI) in its closely-guarded multi brand retail market, paving the way for global supermarket giants to step into the $450 billion sector that was widely seen as one …

Tehelka – ‘Cabinet approves 51% FDI in multi-brand retail’ – The Cabinet cleared 51 per cent foreign direct investment (FDI) in multi-brand retail on Thursday paving the way for global retail giants like Wal-Mart and Carrefour to enter India. The Cabinet also cleared 100 per cent FDI in single-brand retail. …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

NetIndian – ‘Cabinet clears 51% FDI in multi-brand retail’ – After dithering for a long time, the Union Cabinet today cleared a proposal to allow 51 per cent Foreign Direct Investment (FDI) in multi-brand retail and raised the cap to 100 per cent in single brand retail. This will allow global retail giants like …

Boston.com – ‘India opens more to foreign multibrand retailers’ – AP / November 24, 2011 NEW DELHI—India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Retail Week – ‘Indian cabinet approves foreign investment in retail‘ – The Indian government has cleared the way to allow multinational retailers including Tesco, Carrefour and Walmart to enter its retail market. We provide a range of advertising opportunities. By advertising with us, you are guaranteed to reach the …

Atlanta Journal Constitution – ‘India opens more to foreign multibrand retailers’ – AP NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

IBNLive – ‘FDI in retail cleared; multi brand 50 pc, single brand 100 pc’ – The Union Cabinet FDI in multi-brand retail and single brand retail despite division within the UPA on the issue.

Moneycontrol.com – ‘Cabinet approves 51% FDI in multi-brand retail’ – Indian retailers finally get a chance to rejoice as the Cabinet today cleared the bill to increase foreign direct investment to 51% in multi-brand retail and 100% in single brand. Commerce and industry minister Anand Sharma said that he would give a …

Business Standard – ‘Too early to celebrate for Pantaloon retail’ – Valuations may prove to be a hurdle, while real gains will take time to yield. Stocks of organised retail companies like Pantaloon Retail and Shoppers Stop have been in action in the recent past on hopes that foreign direct investment (FDI) in the …

BusinessWeek – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – Nov. 24 (Bloomberg) — India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores Inc. …

Washington Post – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as Wal-Mart. …

STLtoday.com – ‘India opens more to foreign multibrand retailers’ – AP | Posted: Thursday, November 24, 2011 10:36 am | Loading… India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Wall Street Journal (blog) – ‘FDI in Retail: If Wal-Mart Builds It, Will Indians Come?’ – The Indian government deserves credit for doing what , for at least five years, it has been contemplating: setting the stage for the creation if a modern retail industry. It is unlikely that the Cabinet was seized by Adam Smith-like …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

Zee News – ‘Cabinet clears FDI in multi-brand retail’ – New Delhi: In a major decision, the government Thursday approved 51 percent FDI in multi-brand retail paving the way for global giants like WalMart to open mega stores in cities with population of over one million. The nod from the Union Cabinet came …

This permission, given by a ruling political coalition that has allowed food inflation to rage on unchecked for the last three years, which has regularly pushed up the prices of petrol (gasoline) and diesel, and whose record on tackling corruption and graft is shamefully weak, will not go unchallenged.

Food inflation crippled India’s households in 2010

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Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaThe price of a basket of staple foods has become crippling in rural and urban India. The government’s response is to favour agri-commodity markets, greater retail investment and more technology inputs. For food grower and consumer alike, the need for genuine farm swaraj has never been greater.

The retail prices of staple foods rose steadily through 2010, far exceeding in real terms what the Government of India and the financial system call “headline inflation”, and exceeding also the rate of the rise in food inflation as calculated for the country. These calculations ignore the effective inflation and its increase as experienced by the rural and urban household, and they ignore also the considerable regional variations in India of a typical monthly food basket.

Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaMoreover, from a household perspective an increase in the prices of food staples is not seen as an annual phenomenon, to be compared with some point 12 months in the past. It is intimately linked to employment (whether informal or seasonal), net income, and the pressures on the food budget from competing demands of medical treatment, education and expenses on fuel and energy.

When real net income remains unchanged for over a year or longer, the household suffers a contraction in the budget available for the food basket, and this contraction – often experienced by rural cultivator families and agricultural labour – is only very inadequately reflected by the national rate of increase in food inflation.

An indicator of the impact on households is provided by the price monitoring cell of the Department Of Consumer Affairs, Ministry Of Consumer Affairs, Food and Public Distribution. This cell records the retail and wholesale prices of essential commodities in 37 cities and towns in India. Data over a 36-month period (2008 January to 2010 December) for the prices of cereals, pulses, sugar, tea, milk and onions reveals the impact of the steady rise in the Indian household’s food basket.

In 33 cities and towns for which there are regular price entries, the price per kilo of the “fair average” quality of rice has risen by an average of 42% over the calendar period 2008 January to 2010 December. In 12 of these urban centres the increase has been over 50% (Vijayawada, Thiruvananthapuram, Hyderabad, Bengaluru, Patna, Cuttack, Bhubaneshwar, Indore, Bhopal, Shimla, Karnal and Hisar).

The average price rise over the same period for a kilo of tur dal, for 32 cities for which there is regular price data, is 46%. In 11 of these urban centres the increase in the price of tur dal has been over 50% (Puducherry, Bengaluru, Patna, Agartala, Nagpur, Mumbai, Indore, Ahmedabad, Shimla, Jammu and New Delhi). Where wheat is concerned, from among the 27 cities and towns for which there are regular price entries over three years, in 10 the per kilo price rise is 30% and more.

Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaIf in search of a comforting cup of tea over which to rue the effect of the steady price rise, this too will cost a great deal more than it did three years ago. For 25 urban centres with regular price data, the average increase over the same period of 100 grams of loose tea leaf is 38% and in 11 of these cities and towns the increase is between 40% and 100%.

The sugar with which to sweeten that cup of tea has become prohibitively expensive over the January 2008 to December 2010 period. For the 32 cities and towns for which there is regular price data, the average price increase for a kilo of sugar is 102%, the range of increase being between 76% and 125%.

This increase for sugar – relatively homogenous for the price reporting centres – exhibits the countrywide nature of the price rise of the commodity. Nor is there a household economy case for substituting sugar for gur, or jaggery. For the 17 towns and cities reporting data for gur prices over the same 36-month period, the increase in price over the period has been an average 118% with 11 of these centres recording an increase of over 100%.

Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaAdding a third element of higher cost to the humble cup of tea is the price of milk. For the 25 towns and cities which recorded increases in the per litre price of milk over the 36-month period (one city recorded a drop) the average rise is 37%. In seven cities a litre of milk costs at least 50% more in December 2010 than what it did in January 2008 – Ahmedabad, Bhopal, Indore, Jaipur, Jodhpur, Patna and Hyderabad.

In conspicuous contrast are the rates of increase in price of cooking media – groundnut oil, mustard oil and vanaspati. Over the January 2008 to December 2010 period the 37 urban centres recorded average price increases of 10%, 9% and 10% respectively for groundnut oil, mustard oil and vanaspati.

Finally, the volatile allium cepa, or common red onion. In 29 cities and towns reporting regularly the per kilo prices of onion, the increase in price of the vegetable has been astonishingly steep. The average increase for 29 cities is 197.5% and in 14 the increase has been 200% and above – New Delhi, Shimla, Ahmedabad, Indore, Mumbai, Rajkot, Agartala, Aizawl, Bhubaneshwar, Cuttack, Kolkata, Chennai, Hyderabad and Vijaywada. In pale comparison is the otherwise worrying average increase of 39.5% for a kilo of potatoes – this is the 36-month average increase recorded by 27 urban centres.

How many onions in this mandi?

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Wordcloud credit: www.wordle.net

Wordcloud created at wordle.net from names of major crops and states

Who finds and collects the numbers – the enormous diverse sets of numbers – that help describe India’s agriculture? How these are found and used is an absorbing story. In their most encapsulated form, they are given to us as micro-tables by the Ministry of Agriculture in weekly briefings in New Delhi. Depending on the time of the year, these ar titled “rabi sowing progressing well” or “kharif sowing progressing well” (that didn’t happen in 2009, with the failed monsoon, but these habits are hard to break).

Our agri-bureaucracy is large and deep. It’s big enough to rival other countries’ entire administrations. Who in all that byzantine maze is responsible for keeping track of the dozens of foodgrain crops, dozens of commercial crops, the land use in 35 states and union territories, the vast network of departments, research institutes, agricultural extension offices, state agricultural universities, livestock, fisheries, boards and finally the tens of thousands of farmers’ cooperatives?

Here’s a short attempt at describing this universe. The Ministry of Agriculture consists of three departments: Department of Agriculture and Cooperation; Department of Animal Husbandry, Dairying and Fisheries; and Department of Agricultural Research and Education. Each department has its own statistical organisation and system, and I have my doubts about whether they exchange data and methods on subjects that matter.

There’s an Agriculture Census Division which is responsible for organising the quinquennial agricultural census and input surveys in the country in collaboration with the State Agricultural Census units. There are two main statistical activities of the Division: the Agriculture Census and the Input Survey. The Agriculture Census collects quantitative information about the structure of agriculture in India. So far, seven Agriculture Censuses from 1970-71 and six Input Surveys since 1976-77 have been completed.

Ploughing a field in Satara district, Maharashtra

Ploughing a field in Satara district, Maharashtra

The Directorate of Economics and Statistics (DES) is responsible for “collection, collation, dissemination and publication of statistical data on diverse facets of agriculture and allied sectors, required for planning and policy formulation by the Government”. The Agricultural Statistics Division maintains state-wise estimates of area, production and yield of 44 principal crops (27 major and 17 minor) under the two broad seasons of kharif and rabi. The estimates are updated annually in February or March after the release of final estimates of area, production and yield of the preceding agricultural year. This Division also estimates and measures demand and supply projections of foodgrains, oilseeds and other commercial crops. Agricultural wages constitute a major item towards cost of production. Data on agricultural wages in 17 states is collected by DES every month, the wage data relate to the agricultural year (July to June).

Then there is a ‘Timely Reporting Scheme’ which assesses the area sown under principal crops on the basis of what it calls “complete enumeration of 20% villages selected randomly”, which in country with 600,000 villages is a lot. This scheme is put to work in 16 land record states – Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand, Jharkhand and Chattisgarh – and 2 Union Territories – Delhi and Puducherry.

The Cost Study Division implements the “Comprehensive Scheme for Studying the Cost of Cultivation of Principal Crops in India”. This division compiles cost data on principal agricultural crops grown in India: barley, gram, jute, lentils, peas, rapeseed and mustard, safflower, sugarcane, wheat, arhar (tur), bajra, coconut, cotton, groundnut, jowar, maize, moong, nigerseed, onion, paddy, potato, ragi, sesamum, soyabean, sunflower, tapioca, urad and tobacco. This division supplies cost estimates to the all-important Commission for Agricultural Costs and Prices (CACP) which then makes “suitable recommendations” on the Minimum Support Prices of 24 agricultural commodities, which it is then the responsibility of the state governments to ensure that each state’s farmers are paid (at least) those prices for the major crops they bring to the procurement yards.

Finally, there’s the Prices and Markets Division, which collects data on wholesale prices, retail prices, farm harvest prices and market arrivals of selected agricultural commodities from all over India. The bulk of the daily and weekly commercial data is gathered by this division and the scale and scope is staggering: weekly wholesale prices of 154 agricultural commodities are collected from around 600 selected markets and centres; weekly retail prices of 45 food items and monthly retail prices of 43 non-food items from 87 selected markets and centres covering 32 states and union territories. The prices are collected every Friday. It also collects annual farm harvest prices for 26 principal crops from all major states and union territories.

That, in a nutshell, is the story of the numbers that (we hope) help describe India’s agriculture.