The last couple of years has seen a renewed focus towards the rural and the farm sector in India. This comes with the backdrop of Prime Minister Modi led government’s vision towards doubling farmers income by 2022 and with the recent announcement of providing 1.5 times of MSP over and above the cost of cultivation.
There has been a lot of talk around rural distress and several attempts to start farmer agitations which are motivated by political considerations rather than facts. The debate started with a financial newspaper publishing an article with an image which was selectively picked up a former NAC member, and now a political activist for the purpose of constructing a false narrative. Post that, All India Kisan Sangharsh Coordination Committee, has come out with their own computations for the national average weighted price.
The Hindu today used this computation without due diligence and published an article on MSP realization, however, the data in itself is subject to severe inconsistencies. We took a closer look at the data and were astonished to see the extent of the deceptive methodology and twisting of facts using a selective choice of data aimed at creating a false narrative only to fool the people of India.
The Deceptive Methodology
The first thing that we noticed with the data as presented by All India Kisan Sangharsh Coordination Committee was lack of clarity on how they had arrived at the weighted average national prices. Below we represent the data that was used by for the Hindu Article.
They are purposefully not using the standard acceptable methodology. They fail to tell us how they arrived at the average price across time for the purpose of their computation. To compute the price average across time, they need to take a weighted average over that particular day which has to be followed by weighted average over time. We illustrate this using an example.
Let me illustrate this using an example, if for Bajra, we have 2 Mandis then to arrive at the computation price for that day, we will multiply the weights arrived using quantities to come at the price. The difference in a simple average and a weighted average has been presented over here and we can see that the weighted average is way over the simple average.
The simple average is calculated as:
While the weighted average is calculated as:
Thus, the article provides misrepresented data computed by faulty methodologies
Unfortunately, they’ve selectively chosen to hide how they’ve arrived at the daily average and averaging over a period of time. This demonstrates their unsurprisingly total lack of intellectual rigour as their analysis has a lot of outliers. This is precisely why their computations are completely incorrect, inconsistent and driven by a dubious methodology. As always is the said, data never lies but the way it is presented can lead to a lot of erroneous confusions which is why it is important to debunk their claims.
One of the correct ways to look at data
The data we presented here looks at the data for select mandis and argues that the prices of these commodities is well beyond the MSP. There is a case that at times the price of the crop may go below the MSP when the quality of the grain is not up to the mark. This has been the case in the past too as the government tends to procure only those crops that meet its safe procurement standards.
Beyond that, it has been the case that information asymmetry has been broken and as a result, when a mandi offers a higher price, farmers tend to sell their products there. That’s why, for the case of Bajra, Bhavnagar mandi had a higher volume than Jamnagar mandi as the price was higher in Bhavnagar. Thus, in effect, there’s a major variance that occurs on a daily basis with the MSPs and it is important to appropriately arrive at the weighted average price on a daily basis.
They had deliberately chosen to mislead by using a dubious methodology while computing their national average price. In the past too, they had selectively quoted data from certain markets only to construct a false narrative. A closer look at the data further reiterates that MSP realization has significantly improved under the NDA as compared to the situation under UPA-II.
As a result, the narrative around the MSP serves only the political interest of the opposition as the reality on the ground is in stark contrast with the picture that they’re trying to paint. It is thus extremely necessary to call out this farcical approach that has been dressed up carefully so as to confuse the reader and obfuscate facts.
The Prime Minister has shown commitment towards doubling of farming income by increasing the MSP for both Kharif and Rabi Crops as illustrated by the images given below.
While criticism of the government is every agency and individuals right, cloaking data to subtly further a motivated agenda is not only unethical but also extremely dangerous. The misinformation campaign that is furthered by elements like Yogendra Yadav and then picked up by the mainstream media often goes unchallenged weaving a web of lies that becomes difficult to pierce over time.
Ashutosh Kulkarni is a New Delhi based public policy analyst. He tweets @PrachinVaani.