The first two sessions of the workshop were held in P. C. Mahalanobis Hall (Committee Room No. 139), Krishi Bhawan, New Delhi on 29 th April, 2013.
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1 Summary Record of the Three days workshop on OECD-FAO Agricultural Outlook Processes, Methods and Results organised under NCAER Project on Agricultural Outlook and Situation Analysis for Food Security at Krishi Bhawan on April 29 th and at National Agricultural Science Centre, ICAR, New Delhi during 30 th April-1 st May, A three days workshop on OECD-FAO Agricultural Outlook Processes, Methods and Results was organised by the NCAER under its Project on Agricultural Outlook and Situation Analysis for Food Security during 29 th April-1 st May, List of participants is attached. Proceedings on April 29, 2013 The first two sessions of the workshop were held in P. C. Mahalanobis Hall (Committee Room No. 139), Krishi Bhawan, New Delhi on 29 th April, Session 1 The first session started at 2.30 pm under the Chairpersonship of Pr. Adviser (A&C). The Principal Adviser noted that the annual reports on medium term outlook by OECD-FAO provide projections of production, trade and prices for biofuels, cereals, oilseeds, sugar, meats, dairy products and fish and seafood. The assessments are based on a number of assumptions and quantitative relationships at the macroeconomic and sectoral levels. Pointing to the interactions between energy and agricultural production the OECD-FAO report of 2012 had drawn attention to the critical need to increase productivity of agriculture to meet the growing need for food from the rising population and income globally. However, the Principal Adviser noted that in the Indian context, the food-fuel tradeoff is limited and the impact of energy price on cost of food production is a significant issue. She also mentioned that India has begun to provide regular agricultural outlook assessments from both the short and medium term perspectives. Although such assessments were part of broader exercises such as the annual Economic Survey by the Ministry of Finance, Quarterly Reviews of the Economy by the Reserve Bank of India, Five Year Plan documents and more recently the State of Indian Agriculture report by the Ministry of agriculture, more frequent focused assessments of the sector were missing. The project commissioned by NFSM, Ministry of Agriculture on outlook reports is expected to fill this gap. FAO has recognised the initiative of the Ministry and started collaboration in strengthening the India agricultural outlook work. Given the vast experience FAO and OECD have in this area, we are seeking to benefit from this. Mr. Mukesh Khullar, Joint Secretary (Crops) and Mission Director, NFSM, welcomed the experts from FAO and OECD and noted that India was now among the few countries in the world with regular agricultural outlook assessment reports. The workshop would be an important opportunity to learn from international experience in this area. Dr. Peter Kenmore, FAO representative in India made brief comments on the initiative of the Ministry in bringing out the regular agricultural outlook reports and felt that the collaboration 1
2 between FAO and NCAER will provide an opportunity to incorporate the experience of OECD and FAO in analysing alternative scenarios. There is a significant potential to tap into the global modelling framework in OECD-FAO for the Indian researchers in the outlook work. Thereafter Mr. Holger Matthey, Economist (FAO, Rome) and Mr. Gregoire Tallard, Agricultural Policy Analyst (OECD, Paris) gave a general introduction on OECD-FAO Outlook results. They said changing demand/supply fundamentals are transforming agriculture into demand-driven sector. Emerging and developing economies are experiencing vibrant growth and developed economies are lagging behind in the agricultural growth process. China is becoming a major player in the global market, but has started facing increasing constraints to its growth. They said in the changing scenario although prices of agricultural commodities will see moderation they are expected to remain at a high level as compared to the experience of the recent decade. Session 2 Mr. Ashish Bahuguna, Secretary DAC, MoA also joined the workshop and chaired the 2 nd session which started at 4 pm. In this session Mr. Matthey and Mr. Tallard made a presentation on India specific Outlook Results in the OECD-FAO Outlook. Mr. Tallard said FAO- OECD has made projections for Indian agriculture for the coming decade ( ) for Wheat, Rice, Coarse Grains, Oilseeds, Sugar, Diary and Poultry and also for Cotton. The projections require some macroeconomic assumptions regarding GDP growth, inflation rate, population growth and exchange rate (INR per USD). Assumptions on petroleum crude were also necessary to examine the trade off between energy and agriculture. A number of these assumptions were based on the projections by IMF. They said strong food demand will continue in India with shift in dietary intake. Demand for Dairy, Poultry, vegetable oils, coarse grains and wheat is expected to gain prominence over rice. Milk production is likely to increase significantly in the outlook period ( ). Mr. Matthey said food security remains central issue for India and potential for arable area expansion is limited. Productivity improvements are critical. However, the projected improvement in productivity is moderate. The policy environment for agriculture has to provide incentives for these improvements in a sustainable manner. The presentation was followed by discussion on a number of issues related to the assumptions and results of the outlook exercise. The outlook work has required information of wide range of parameters relating to agriculture. The income elasticity of commodities and products, the norms relating to use of seeds, feed and wastage are necessary for the modelling work. These parameters may have changed over time and it is necessary to recognise these changes. The issue of relatively low improvement in agricultural productivity was discussed. Which policies are necessary to raise productivity? The recent experience in India has been that there have been significant gains in productivity. The attempt has been to bridge the yield gaps between high yield regions and low yield regions by improving yields in the low yield 2
3 regions. It was also noted that the genetic or technical potential for yields has not increased in the recent years. This may be the constraint that needs to be addressed in the longer run. Proceedings on April 30, 2013 Session 1 Dr. B. Gangaiah, Adviser, DES, MoA, chaired the first session. Dr. Shashanka Bhide, Bhide, NCAER provided a brief introduction to India s Medium Term Agricultural Outlook Reports. Dr. Nilabja Ghosh, IEG, New Delhi and Prof. Pramod Kumar, ISEC, Bangalore made brief presentations on the structure of the short and medium term models for the India s Agricultural Outlook. The participants discussed a number of issues relating to the parameters of the models and data requirements. How are the food and non food demand modelled? The seed, feed, wastage ratios for different crops need updating. The discussion coverd variables such as appropriate commodity prices to be used for models: farm harvest prices, wholesale prices and retail prices; wage rates; income levels; impact of world prices; technological developments; policy uncertainties; intelligence surrounding the variables; can the models be extended to long term i.e. beyond 2017 which is the terminal year for India s current, 12 th Five Year Plan? Sessions 2 and 3 Next two sessions were devoted to general introduction to AGLINK-COSIMO models. Prof. Ramesh Chand, Director, NCAP chaired the second session of the day. Mr. Matthey and Mr. Tallard while presenting the models said the AGLINK-COSIMO models are partial equilibrium models driven by elasticity, technological developments and policy variables. The models are not static and additional countries, items/ variables of interest are added from time to time. Fish and cotton were added recently. These models help us to bring out global projections on supply, demand and trade. The model parameters are generally not estimated by the modellers but taken from other studies and experts on the commodities. This is an important feature of the model that must be recognised. The individual country level models may vary in detail. The baseline for the models is based on the country experts and the models are calibrated to be consistent with the views of the experts. Dr. Gangaiah observed that this interaction with the FAO/ OECD experts will be valuable in the process of developing our India specific model. Dr. Ramesh Chand said the deliberations were very interactive and frank. India needs a specific model because of her distinct characteristic of agriculture and policy framework and 3
4 the collaboration with the FAO/ OECD will provide guidance in this process. Session 4 Last session of the day was devoted to review and discussion on the AGLINK-COSIMO models. Questions on country specific heterogeneous policies, tariffs, duel prices (PDS and Market prices), basic farm prices, export prices, interaction with stake holders etc. were raised and discussed during the presentation. Proceedings on May 1, 2013 Sessions 1 and 2 Three sessions were held on the third day or the workshop. In the first two sessions, Mr. Matthey and Mr. Tallard made a presentation on Baseline cycle structure and data requirements for the medium term agricultural outlook. The various parameters, strategies for parameter choices, dependent and independent variables, elasticity of income after saturation, emphasis on consultations with experts, behavioural analysis, private stock data, grains, feed data, data calibration etc. were the issues raised and clarified during the presentation. The presentation also included demonstration of the working of the COSIMO model. Session 3 The third and last session of the day was chaired by Dr. B. Gangaiah, Adviser, Ministry of Agriculture. This session was devoted to India s needs in bringing out the short and medium term agricultural outlook assessments. Climatic variability, stock aspect, growing food processing sector, policy changes, technological changes, importance of pulses, GDP growth rate, growing service sector, horticulture, livestock, gender contribution, involvement of other stake holders like industry and trade etc. were the issues were raised and discussed during the session. Dr. B.S. Bhandari, Adviser, Ministry of Agriculture drew attention to a number of areas where the analysis will be necessary. He pointed to the need for capacity building within the government so that the outlook assessment process is sustained over time. Winding up the discussion Dr.Gangaiah said the medium term model will be based on a number of assumptions many of which generally do not remain constant over time. He cited weather, technology and policy measures. More realistic are the assumptions, the more realistic will be the results. The capacity building offered by FAO will be mutually beneficial. It is hands on experience sharing between the two groups. DES, M/o Agriculture also needs capacity building. Since it is a continuous process we need to have a system that will sustain the process over time. The workshop concluded with a Vote of Thanks by Dr. Shashanka Bhide, Senior Research Counsellor, NCAER to the visiting experts, Mr. Matthey and Mr. Tallard, participants from IEG, ISEC, NCAER and the Ministry of Agriculture. 4
5 List of participants of the Workshop on OECD-FAO Agricultural Outlook Processes, Methods and Results organised under NCAER Project on Agricultural Outlook and Situation Analysis for Food Security at National Agricultural Science Centre, ICAR, New Delhi during 29 th April-1 st May, Sh. Ashish Bahuguna, Secretary (A&C) 2. Ms. S. Bhavani, Pr. Adviser(A&C) 3. Dr. Peter Kenmore, FAO Representative in India 4. Sh. Raghav Chandra, Additional Secretary & FA(A&C) 5. Sh. A. K. Srivastava, Additional Secretary (DAC) 6. Sh. Mukesh Khullar, Joint Secretary (Crops), DAC 7. Sh. Narendra Bhoosan, Joint Secretary, DAC 8. Sh. J. S. Sandhu, Agriculture Commissioner, DAC 9. Mr. Holger Matthey, Economist, FAO, Rome 10. Mr. Gregoire Tallard, Agricultural Policy Analyst, OECD, Paris 11. Dr. B. Gangaiah, Adviser, DES 12. Dr. B. S. Bhandari, Adviser, DES 13. Sh. S. K. Mukherjee, Adviser, DES 14. Ms. Malti Devi Negi, Adviser, DES 15. Dr. S. Chandrasekar, Adviser, DES 16. Sh. Amar Singh, Adviser, DES 17. Prof. Ramesh Chand, Director, NCAP, New Delhi 18. Sh. Bhaskar Goswami, Policy Specialist, FAO, India 19. Prof. Pramod Kumar, Prof. & Head, ADRTC, ISEC, Bangalore 20. Dr. D. P. Malik, Additional Commissioner (crops), DAC 21. Sh. Narender Kumar, Joint Director, DAC 22. Dr. Nilabja Ghosh, IEG, University of Delhi, North Campus, Delhi 23. Dr. Anita Kumari, IEG, University of Delhi, North Campus, Delhi 24. Dr. S. Bhide, Sr. Research Counsellor, NCAER 25. Sh. Devender Pratap, Associate Fellow, NCAER 26. Dr. A. Govindan, NCAER 27. Ms. Laxmi Joshi, NCAER 28. Sh. V. P. Ahuja, NCAER 29. Ms. Mondira Bhattacharya, NCAER 30. Ms. Charu Jain, NCAER 31. Ms. Himani Gupta, NCAER 5
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