Half of India facing drought; ration supplies to increase

New Delhi, Aug 19 (PTI) Nearly half of India is reeling
under drought that could cut rice production by over 10
percent, but the government would use its reserves to check
prices and also increase ration supplies, Agriculture Minister
Sharad Pawar said Wednesday.

The Centre will release wheat and rice from its reserves
in the open market if their prices go up. It is also mulling
increasing sugar supply through ration shops, he said at a
conference of state food ministers to discuss strategies on
drought and price rise.

"Ten states have declared 246 districts as drought-
affected. This comes to about 46-47 per cent of total
districts in the country," he told reporters.

"Shortfall in monsoon may result in area under paddy
coverage falling by about 5.7 million hectares (from last
year's level) and the production of rice may reduce by 10
million tonnes," he said, adding that some shortfall in
oilseeds and sugarcane output was also expected.

India produced 99.15 million tonnes of rice in 2008-09,
including 84.58 MT in the last Kharif.

Pawar said the Centre would provide additional food
grains to states for distribution among 11.52-crore Above
Poverty Line (APL) families at the minimum support price.
Earlier, food grains were provided at the cost price, which
included MSP, freight and storage charges.


Food grain for ration has also been increased from 11 MT
last year to 17 MT now for APL category.

Pawar said the empowered group of ministers decided early
this week to offload wheat and rice in the open market to
augment supply and curb food inflation. He pointed out there
could be a pressure on availability and market prices of rice
due to expected fall in rice production this Kharif season.

The minister asked the states to maximise procurement of
rice in the Kharif marketing season starting October. States
should impose a "minimum 50 per cent levy" on rice millers
(the rice used for the PDS).

Pawar expressed concern over the high rates of inflation
in food articles, in particular pulses and sugar, that have
shown a "sharp increase". "This has caused widespread distress
and we are keen to ensure that these increases are contained
so that the hardship to the consumers is minimised".

He said the Centre is considering to extend the scheme of
providing Rs 10 a kg subsidy on imported pulses through the
PDS beyond its deadline of September 30 to curb rising prices,
which have surged by up to Rs 30 a kg in three months.

On sugar prices that has crossed Rs 30 a kg from Rs 17-18
a kg a year-ago, he said the government is mulling raising the
amount of levy sugar that mills need to contribute for selling
in ration shops.

"The government is considering an increase in the
percentage of levy sugar to make more sugar available through
the public distribution system," he said. At present, mills
are required to provide 10 per cent of their total production
as levy sugar to the government for supply under the PDS.

The industry is ready to supply more sugar for the PDS
provided the government raised the levy price, Pawar said,
adding, levy sugar price was not revised in last five years
and is up for revision following Supreme Court direction in
this regard.

At present, the levy sugar price is Rs 13.50 per kg,
which is much below the production cost.

Pawar cautioned that sugar production for the next
season, starting October, "is not going to be bright". Sugar
output this season has slumped to about 150 lakh tonnes from
263 lakh tonnes in 2007-08. The dip in output against the
domestic requirement of 225-230 lakh tonnes has put pressure
on prices, he added.

Pointing out that some of the states have imposed sales
tax or value-added tax on imported sugar, the minister asked
them to abolish such a practice.

Pawar also expressed concern about the diversion of
subsidised items under the PDS in states and asked them plug
the loophooles to ensure that the benefit reaches the needy.

Already, the government's food subsidy, provided for the
supply of different items under the PDS and other welfare
schemes, has grown sharply and would cross Rs 60,000 crore
this fiscal, Pawar said.

The minister also maintained that while the Centre would
make every effort to augment the supply of essential items,
the states need to clamp down on hoarding by invoking tough
norms under the Essential Commodities Act to lend a helping
hand in containing the price rise. PTI BKP
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