Poor Monsoon Impact on Agricultural Production

According to most recent reports, progressive rice planting is currently lagging behind last year's level by over six million hectares, which would translate into a production loss of at least 12 million tons. Lower rice yields due to late and erratic monsoon rains in several states would also result in additional production losses. As the window of opportunity for planting of rice will be over soon, farmers will start shifting to less irrigation intensive short duration pulses and coarse grains. Although the government would make all out efforts to reduce losses by providing various incentives and input subsidies to farmers, devising contingency plans to increase kharif rice production and rice production during the rabi (winter) season, an overall loss of at least 11 million tons in MY 2009/10 rice production appears likely. In a worst case scenario, the losses could be as high as 15 million tons from last year's record production of 99.15 million tons (revised). However, a clearer picture will emerge only by end-August, when the government receives detailed reports from various drought affected states.
Despite a likely significant decline in rice production this year, the overall supply situation for staple grains would remain stable following record procurement of wheat (25.1 million tons) and rice (31.6 million tons) by the government from the record 2008/09 crop, resulting in a larger than normal build up of government-held stocks. Government-held grain stocks on July 1, 2009, were 52.5 million tons (19.6 million tons of rice and 32.9 million tons of wheat) which is more than adequate to meet the shortfall in production this year. Thus there won't be a need to import wheat or rice this year.
As a precautionary measure, the government has decided not to permit exports of non-basmati rice and wheat indefinitely, even on a government-to-government basis for humanitarian purposes.