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EGoM to meet on drought next week: Sharad Pawar

NEW DELHI (Reuters) - Agriculture minister Sharad Pawar raised the prospect of drought for the first time this year, saying on Thursday officials would discuss next week the so-far meagre monsoon rains that are key to the economy of this major consumer and producer of food crops.

Pawar said members of the Empowered Group of Ministers (EGoM) on drought would meet as early as Tuesday for the first time since 2009, which saw the driest monsoon in nearly four decades.

"An (empowered group of ministers) on drought is likely to meet on Tuesday, but I am seeking the availability of other ministers," Pawar told reporters. "We will discuss the situation there."

India is one of the world's largest consumers and producers of agricultural commodities including sugar, rice, cereals, oilseeds and pulses, and more than half of its farmlands are irrigated by the monsoon.

The four-month season accounts for 75 percent of the country's annual rainfall and half of that is usually delivered in June and July.

Halfway through this season, however, the monsoon is about 22 percent below average but the government has so far stopped short of classifying the lack of water as a drought, although it has warned that the rains for the whole season are likely to be weaker than usual.

A poor monsoon will add to the woes of a government already struggling to contain double-digit food inflation and slowing growth.

Below average rains may cause food shortages and increase demand for subsidised diesel for irrigation. Domestic grain shortages may also curb exports, pressuring global prices for cereals which have reached record highs due to a major drought in the United States.

India currently allows exports of rice, cotton, corn, wheat and sugar, but government sources said this policy may be reviewed mid-August.

The sources also said the state regulator may decide next week whether to ban futures trading in selected farm commodities.

This week's rainfall bulletin is due out later on Thursday.

Pawar had warned that the weak monsoon may reduce India's rice output this year and cut growth in the farm sector to below the government's target of 4 percent.

The government is already providing supplies of high-yielding seed varieties, ensuring fodder availability and increasing power supplies to some areas as farmers across the country struggled to plant summer crops in the dry earth.

Some media reports say textile mills are also importing cotton to cover shortfalls caused by the lack of rain. (Editing by Jo Winterbottom and Miral Fahmy)