Indian drought threatens rice, sugar output
NEW DELHI: India said Wednesday it would step up its food distribution programme for the poor as a widening drought threatened to cut rice production by 10 percent and sharply reduce sugar supplies.
Agriculture and Food Minister Sharad Pawar also said the government would consider releasing wheat and rice from its reserves into the open market if their prices, which have already shot higher, increase further.
The monsoon rains, which sweep the country from June to September, are running at 29 percent below normal.
"Ten states have declared 246 districts drought-affected," Pawar said in the Indian capital. India has 626 districts.
"A shortfall in the monsoon may result in the area under paddy coverage falling by about 5.7 million hectares (from last year) and the production of rice may be reduced by 10 million tonnes," or 10 percent, he said.
India produced 99.15 million tonnes of rice in the financial year 2008-09.
Pawar said the national government would provide extra food grain to states in case it is needed for distribution at low prices.
Pawar said some shortfall in oilseeds and sugarcane output was also expected, adding the government may raise the amount sugar producers must set aside for sale to the poor to boost supplies and keep a lid on prices.
"The government is considering an increase in the percentage" of sugar set aside "to make more sugar available through the public distribution system," Pawar told state food ministers.
At present, sugar mills are required to earmark 10 percent of their total production for the poor for distribution through state-run shops at subsidised prices.
"We will have to collectively think as to how we ensure that this sugar really reaches the intended beneficiaries," Pawar told the ministers.
India is the world's biggest consumer of sugar as well as one of the top producers.
The country's monsoon, expected to be the weakest in at least seven years, has helped drive global sugar prices to nearly three-decade highs and has also pushed up prices in India.
Pawar said the sugar production outlook was "not bright," adding output in the current sugar season had fallen to 160 million tonnes from 263 million tonnes a year earlier.
India has an annual domestic requirement of 225 million to 230 million tonnes.
Prime Minister Manmohan Singh has said India faces no risk of food shortages thanks to two years of bumper crops.
Schemes such as the government's rural job programme can help ease the effects of the drought on the rural poor, he told state chief ministers earlier this week.
"There is no need to panic as we have a better understanding of how to handle a crisis like the drought," he said.