September 22, 2020

Data collection could help India tackle its food inflation problem

By Niranjan Rajadhyaksha, Aditya Kuvalekar

In LiveMint, Aditya Kuvalekar and Niranjan Rajadhyaksha suggest a farmer facing app which can provide harvest-time price forecasts to inform sowing decisions of farmers and address some of the possible concerns in doing so.

Excerpts below:

" In this era of technology and smartphones, governments can develop the infrastructure to gather real-time data, even if not perfectly accurate, on the area under cultivation for a few important crops, with their expected harvesting dates. One way to do this could be to develop a smartphone app for farmers to enter this information after sowing and get modest monetary incentives for doing so. The mechanism is relatively straight- forward. Since not all farmers will make sowing decisions at the same instant, if the app shows that a number of farmers are sowing, say, onions, its price is likely to be low due to oversupply. Therefore, the app could advise farmers who make sowing decisions, even if slightly late, in favour of another crop for a better price. This also insures the early movers, as the farmers who make sowing decisions later have no incentive to grow onions if too many farmers before them have already done so. We want to emphasize that we are not suggesting a socialist-era relic of centralized production planning. Rather, price forecasts themselves will serve this purpose."

"One may call the whole idea far-fetched on three grounds. First, can farmers actually use smartphones to provide such data to the government? Second, can farmers diversify so easily? And third, do we have algorithms to forecast future prices? These are valid concerns."

Read full article here

Topic : State Capacity / In : OP-EDS
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