Food prices forecasting system to avoid shocks?
Niti Aayog said that India needs its own annual “agricultural outlook”, which refers to an economic forecasting system to assess demand and supply situations to avoid seasonal rise in prices of food items, such as onions.Updated: Sep 27, 2019 10:02 IST
State-run policy think-tank Niti Aayog has said India needed its own annual “agricultural outlook”, which refers to an economic forecasting system to assess demand and supply situations to avoid seasonal rise in prices of food items, such as onions.
Ramesh Chand, the Niti Ayog member who oversees agriculture, said it was important to have a fair idea of production and supply, which determine prices. He was speaking at India Agriculture Outlook Forum 2019 organised by the agriculture ministry. Chand is part of a high-level panel of chief ministers formed by the Modi government to suggest measures to reform the agriculture sector.
“We need a system of agricultural outlook to forecast certain things in advance, which help the government to respond better,” he said.
Indian agriculture, he said, had reached a highly commercialized stage, where it was necessary to have an “outlook” system, referring to a mechanism of forecasting prices.
He said onion prices were elevated right now and prices would come down when summer crop hit markets by November.
How quickly the prices come down will depend on how quickly shipments from the Centre’s buffer stock will reach markets, he said.
Chand said the “policymakers today are far more receptive to inputs from agri economists than before.”
“For nearly 20 years, agriculture economists of this country have seen frustrating moments because whatever agri-economists had been suggested to the government, it was not taken forward,” he said
Prices of onions have doubled in some cities between August and now, including in Delhi, Jammu, Patna and Gurugram. Usual retail rates of Rs 25-30 a kg have gone up to Rs 60-80 a kg, according to market data.
The Union government imposed a minimum export price (MEP) on onion of $850 (about Rs 65000) a tonne. An MEP is a policy tool designed to discourage exports by making Indian produce expensive for foreign buyers, ramping up domestic supplies. It has also offered states onions from federally held reserves of 32,000 tonne, a statement from the consumer affairs ministry said. The government has also called for bids to import onion and shipments are expected by November.