Rice production may slump by 10 million tonnes (MT) this Kharif season as drought has plagued over one-third of the country, prompting the government to boost the Public Distribution System (PDS) and intervene in the market to curb price rise.
“Shortfall in monsoon may result in a shortfall in area coverage of paddy by about 5.7 million hectares compared with last year and the production of rice may be reduced by 10 million tonnes,” Food and Agriculture Minister Sharad Pawar said, addressing food ministers of different states here today.
India produced 99.15 million tonnes of rice in 2008-09, including 84.58 million tonnes during the last Kharif season.
The minister observed that the dip 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.
“If required, the government would not hesitate to undertake open market intervention and release of wheat and rice under the open market sale scheme,” Pawar said.
This means the government may buy more to build adequate reserves and strengthen PDS for any contingency. And, Pawar asked states to ensure the purchase of at least half of the total rice procured by private millers for the PDS.
Also, Pawar expected some shortfall in the output of oilseeds and sugarcane due to poor monsoon, which had brought 29 per cent less than the normal rainfall in the country.
Pawar said maximum procurement of rice had to be made to ensure increased availability of foodgrain for distribution to the needy under PDS. And, state governments should impose a “minimum 50 per cent levy” on rice millers (the rice used for PDS). In this context, Pawar referred to states and union territories like Kerala, Tamil Nadu, Assam and Puducherry, which have not collected any levy on rice from private millers during 2008-09.
Moreover, the minister asked the states to review the taxes they levy on the purchase of foodgrain by central agencies.
He also apprised them of the fact that the Centre’s food subsidy, provided on procurement of foodgrain and subsidised supply through the PDS, has grown sharply and will exceed Rs 60,000 crore this year.
However, the good news is that the Centre has procured record 32.6 million tonnes of rice and 25.3 million tonnes of wheat during the current marketing season. The huge purchase is expected to provide some relief to the Centre in its efforts to mitigate the impact of drought or drought-like situation in 209 districts across the country.
The Centre is planning to extend the scheme of providing Rs 10 a kg subsidy on imported pulses through ration shops beyond its deadline of September 30 to curb the rise in prices, which have surged by up to Rs 30 a kg in three months.
The Centre had implemented the scheme last year and asked MMTC, STC, PEC and Nafed to import pulses to augment domestic supply.
