Drought costs rice production

Drought costs rice production

File photo. AFP

Pawar’s promise to check the soaring prices of essential commodities comes in the wake of this year’s erratic monsoon which has cost rice production by 10 million tonnes.

Because of drought that has gripped 246 districts across 10 states, paddy coverage was faced with a shortfall of about 5.7 million hectare, a situation which would reduce rice production by 10 million tonnes. The country produced 99.15 million tonnes of rice in 2008-09, including 84.58 million tonnes during the last Kharif season.

The minister, who was addressing a day-long meeting of state food and civil supplies ministers, said the drop in the Kharif output of rice might trigger an upward spiral of foodgrain prices and conveyed the Centre’s action plan to counter a rise in rates.
He also asked the states to impose a 50 per cent levy on rice millers. The situation could be grim in the days to come as Pawar also expected shortfall in the output of oilseeds and sugarcane due to poor monsoon, which has brought 29 per cent less than normal rainfall in the country. 

Sugar prices

To stem the rising price of sugar, Pawar has asked states to increase the levy quota from sugar mills from the existing 10 per cent and requested relaxing VAT for imported sweetener.

Sugar output in the year ending September 30 was 15 million tonne, lagging demand by as much as 23 million tonne. The area under cane cultivation shrunk to 4.25 million hectares from 4.38 million hectare a year ago.

Now, the price of sugar in the retail market is hovering at Rs 30 per kg from Rs 17 a kg last year.

Currently, sugar mills are forced to sell 10 per cent of their output at low state-set prices under levy quota. 

“If required, the government would not hesitate to undertake open market intervention and release wheat and rice under the open market sale scheme,” Pawar said.  To control the prices of foodgrain as well as their seamless distribution to the poor, Pawar hinted that the government may buy more to build adequate reserves and strengthen the PDS for any contingency.

PDS rice

The minister asked states to ensure the purchase of at least half of the total rice procured by private millers for the PDS.

In this context, Pawar referred to states like Kerala, Tamil Nadu, Assam and Puducherry which have not collected any levy rice from private millers during 2008-09.

He apprised states of the fact that the Centre’s food subsidy, provided on procurement of foodgrains and subsidised supply through the PDS, has grown sharply and will exceed Rs 60,000 crore this year.

DH News Service

DH Newsletter Privacy Policy Get top news in your inbox daily