The Hindu Business Line : Trade, Centre differ on crop output estimates

THE Union Government and trade usually do not agree with assessments on the crop production. For the 2004-05 crop year (July-June), the trade is of the opinion that the Centre has overestimated the overall output. This, in turn, is causing problems for user industries that depend on agricultural produce for their raw material requirements.

The grains trade, in particular, is of the view that the figures put out by the Agriculture Ministry do not reflect the ground situation, especially in oilseeds and wheat.

When contacted, Agriculture Ministry sources said that what had been put out as likely production was an estimate that could be revised either up or down depending on the final inputs from various sources.

The bone of contention between the Centre and the trade is the projection on oilseeds output. While the former has estimated that the oilseeds production has gone up to 261.03 lakh tonnes (lt) from 252.90 lt the previous year, the latter has put the figure at 219.30 lt.

"There is a big gap between the Government's and the trade estimates. Usually a gap exists, but not as wide as over 40 lt," said Mr B.V. Mehta, Executive Director, Solvent Extractors Association of India.

"If we go by the Government's estimates, then our crushing units should not have been starved of raw materials. Nafed may have around 20 lt mustard but apart from that there are no signs of oilseed being anywhere else for our units," added.

Nafed (National Co-operative Agriculture Federation) had procured 20 lt of mustard last year as part of the Centre's market intervention operations. This was to ensure that prices of the oilseed did not crash after hopes were raised of a record crop.

A solvent industry source said that the same held good for soyabean production too. "If the oilseed production was as high as projected by the Government, then why are vegetable oil imports rising?"Edible oil imports during the first nine months of the oil year from November 2004 have increased to 35.46 lt from 26.95 lt during the corresponding previous period.

"Prices of oilseeds and vegetable oils could have been lower than the previous year but that is because of a good global crop," sources said.

The grains trade also points out to estimates of wheat production as another case of the Government's figure being "higher than actual figures."

Initially, expectations were that wheat production could be around 75 million tonnes (mt). But once the crop arrival began, there was a total change in the picture. Last year, the yield was affected due to unusually warm December.

Though the Government has estimated the production to be 72 mt, the trade says that it could be not more than 68 mt.

According to Agriculture Ministry sources, wheat estimates are likely to be revised downwards by another half a million tonnes.

"The problem in presenting such estimates is that the user industry gets affected if it tends to go fully by what the Government says. Though we agree that in the current circumstances it is difficult to come out with accurate projection, efforts have to be made to give it close to actual production," industry sources said.

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