Agriculture activity in the national accounts - how well it is measured?

1. Agriculture activity in the national accounts - how well it is measured? Pratap Narain B – 286 Yojana Vihar, Delhi – 110 092, India (Paper sponsored by UNSD)

2. Why EAA? Traditionally, policy analysis makes use of statistics in order to monitor developments and take decisions in order to influence them. UNSD understanding the need introduced the new term “macro-accounts” to refer not only to national economic accounts but also to satellite accounting, and, in particular, integrated economic-environmental and socio-economic accounting, in which monetary as well as physical data are used.Use of Macro Accounts in Policy Analysis, Series F No. 81, UN 2002.

3. What is agricultural activity? • Is it as defined in ISIC? • What a policy maker wants – Output of agriculture activity? Land used for producing the output? Or the people engaged in the production of the output? Backward & forward linkages? • Policy makers need is a combination of all the four, but most developing countries are producing data to answer the first question. This is the primary reason why national accounting is not popular in Ministry of agriculture and related offices.

4. Role of FAO • FAO has introduced SEAFA in 1996 to fill this gap • Two handbooks on - the compilation of Economic Accounts for Agriculture and collection of data and compilation of agri-environmental indicators in 2002. • Handbook on EAA emphasizes collection of data for agricultural output, agricultural holdings as well as agricultural institutions and present country practices for overcoming data collection problems by adopting suitable proxy calculation. • Handbook on agri-environmental indicators looks at specific data collection problems and advocates use of administrative and scientific data to enhance data reliability at reasonable cost.

6. Agricultural Statistics System in Developing countries • Despite the increasing awareness most developing countries still do not have an adequate system of agriculture statistics. • The available agricultural data are incomplete in terms of • The range of commodities covered (for example, in many cases only cash crops for large farms are covered), • The range of variables or data sets covered (for example in many countries data on agricultural inputs are practically non-existent), • Coverage of the nation (sometimes parts of the country are excluded from the national statistical reporting system). • The reliability of available data is often questionable

7. Data collection system • For improving the production data - attention is required to extend the coverage to minor crops; agricultural production being done outside agricultural holdings (e.g. crop grown at bunds, kitchen gardens, road side plantation, etc.); horticultural crops and livestock production. • Intermediate consumption/ producer prices data - most appropriate method: cost of production surveys supported by time use survey • Need of an integrated approach – a combination of agricultural – livestock census and institutional based sample surveys on cultivation practicesand food consumption pattern

8. Data collection system – case of India • Annual census of agricultural parcel/ Timely Reporting Scheme – estimates of area and production • Weekly collection of data on wholesale and retail prices • Cost of Cultivation Studies to obtain data on inputs & outputs • Data on electricity, insecticides, fertilizers from sources like Central Electricity Authority, Fertilizer Association of India, Pesticides Association of India • Other sources like Tea Board, Coffee Board, Rubber Board, Directorate of Areca nut and Spices Development, Directorate of Cashew nut and Coca Development, Central Bureau of Narcotics, Directorate of Marketing and Inspection, National Horticulture Board, National Sample Survey Organisation

9. Data collection system – case of India • Quinquennial Indian livestock census provides age-wise and sex-wise data at the district level on number of different categories of animals separately for urban and rural areas. • Integrated Sample Survey data collected on bovine practices, poultry practices and number of sheep and wool production, feeding and grazing practices of sheep and number of animals slaughtered according to species, breed and age, live weight and carcass weight after slaughter in the case of meat production.

10. The way ahead • Horticultural crops and Livestock production – use of census supplementary modules as recommended by WCA 2010 • Statistics on Agricultural inputs, producer prices etc. – Cost of cultivation studies supported by time use survey • Informal Agriculture Sector - agricultural activities of small and marginal cultivators, tribal/ nomadic population and households living in urban or semi-urban areas – Use of expenditure survey, small area estimation and other techniques

11. The way ahead • Land use classification - an ideal classification can be prepared by evaluation of each segment of land and use of (a) the concept of gross and net area under use, and (b) the principles laid down in ISIC for classifying activities into principal, secondary and ancillary activities and their association to the owner of the unit. • As it is not easy to collect comprehensive data for creating a global information system, a system of indicators based on macro-accounts may be developed to monitor and evaluate economic policies and programs.