Real-time price, demand forecast for select crops from next kharif season

To make an accurate assessment of how prices and demands of farm commodities move, the central government is working on a proposal to develop projections like those of the US Department of Agriculture (USDA) for select farm goods from the next kharif season.

The forecast will be issued after regular intervals.

Officials said a technical advisory committee had been constituted for the purpose and the National Institute of Agricultural Economics and Policy Research (NAIP), under the Indian Council of Agriculture Research (ICAR), had been roped in as knowledge partner.

The NAIP has entered into a memorandum of understanding (MoU) with 14 major agriculture universities of the country for developing a model using mandi arrival and other data sources, along with international market trends, to forecast price and demand trends of commodities.

“The statistical model will use time-series data on mandi arrivals, their prices from secondary sources such as agmarket.nic.in and field surveys and other data points to accurately predict price and demand,” the official said.

The UPA government in 2011 entered into a partnership with the National Council of Applied Economic Research (NCAER) for preparing a monthly outlook report that detailed the supply-demand and price forecast for major crops. The arrangement lapsed after a few years.

The forecast is expected to be available from the 2019 kharif season for a few crops and will be expanded to cover others, depending on the success of the models. 

In the initial phase, the forecast is expected to cover national level price and demand and gradually will come up with regional and sub-regional level forecasts.  

According to senior officials the forecast will be shared initially with government officials and ministries to frame and redesign policies. 

“Once the process is settled and the model is well tested and there is a degree of alignment between the forecast prices and actual prices, then the price and demand projections will be disseminated to farmers and other stakeholders,” the official explained.  

He said the gradually when the forecast models are well settled and all the robustness of the forecasts is well established, the information will be shared on a real-time basis with farmers so that they can fine tune their sowing preferences. 

“We plan to move towards a regime where we can advise farmers which crop to sow and which not to sow depending upon the forecasts and demand trend so that supply management can be done,” the official said.

Care will also need to be taken to ensure that government’s own price and demand forecast for major crops ahead of the sowing season is not misused by traders for speculative purposes.

The USDA’s forecasts on crop prices and demand for a range of agriculture commodities done globally and also domestically is considered one of the most authentic and accurate sources of information which guides farmers’ decision not only in that country but also in other nations.

However, this is not the first time that such an attempt has been made by the government to forecast price, demand and supply scenario for major agriculture commodities. 

Experts said such an outlook if prepared correctly and religiously could help policy makers in taking informed decision on host of issues concerning the farming sector.

“I think there is need for such a real-time information system for agriculture crops which helps policy makers take timely decisions on import duties or export bans which protects the interest of consumers as well as farmers,” Shiraz Hussain, former agriculture secretary, told Business Standard.

FOCUS ON ASSESSMENT

• Centre plans regular timely price and demand forecast for select farm goods
• A series of meetings was held in the last few days to fine-tune the model
• ICAR-NAIP has been roped in as the knowledge partner for the project
• The forecast is expected to come for select kharif crops from 2019 season
• The forecasts won’t be shared with farmers initially and would be disseminated to them after the process is settled