Rain woes: No food items ban yet but imports likely, says govt

There is no need yet to panic over the prevailing drought situation as the government has contingency plans in place, Food Minister KV Thomas said today.

Though the government has not though of banning exports of any food items, it is considering imports via state-owned agencies to meet any requirement, he said.

The minister reviewed the situation in a meeting with Prime Minister Manmohan Singh, Agriculture Minister and the India Meteorological Department officials, in the first sign that the government is gearing up to face consequences of a drought-like situation.

[caption id=“attachment_392231” align=“alignleft” width=“380”] KV Thomas said prices of vegetables, pulses and edible oil are likely to increase due to the deficient rain situation.[/caption]

The rain short fall in the country was 22 percent as of July 18, the met department had said. It has also scaled down its rains forecast for the year to 92 percent of long period average from the earlier 96 percent.

He said prices of vegetables, pulses and edible oil are likely to increase due to the deficient rain situation.

There is a proposal to increase the subsidy for pulses sold through public distribution system to Rs 20 per kg from Rs 10.

Farmers in the country have sowed pulses on 4.02 million hectares by July 20, compared with 5.86 million hectares a year ago, a Reuters report said.

Paddy sowing is complete over 14.46 million hectares compared with 16.13 million hectares a year ago, the report said.

Cultivation of oilseeds has completed over 10.88 million hectares compared with 12.14 million hectares a year ago, the Reuters report said. The sowing progress of oilseeds is key as India is hugely dependent on imports to meet its requirement.

The government has no plans to ban exports of sugar and food grains as of now, the minister said, adding the rain deficit is unlikely to affect output of sugar and rice.

The country has procured a record wheat and rice in the last year, which is likely to serve as a buffer in case of an emergency, various brokerage have said.

Thomas, however, said the government is considering imports through government agencies.

On media reports of plans to ban futures trading in commodities, the minister said he has identified some commodities with high price volatility. He has also asked the regulator Forwards Markets Commission to intervene if volatility persists