EGoM on drought meets early next week

FMC warns of futures ban in farm products IMD expects rain deficit to narrow in coming weeks

With the southwest monsoon showing little sign of improvement, worsening the drought-like scenario in many parts of the country, the first meeting of an Empowered Group of Ministers (EGoM) on this situation will be held on Tuesday next week. Agriculture Minister Sharad Pawar will chair it.

The commodities market regulator, the Forward Markets Commission (FMC), has warned traders that it would not allow them to manipulate futures prices of agriculture items and could ban its trading if required.

The EGoM, first constituted in 2009, when the country faced its worst drought in 30-odd years, has been in limbo since then because the monsoon had improved in the preceding two years. With a 22 per cent deficiency in rainfall in 2012, the panel will meet again to take "quick and timely decisions" on policy and other matters for effective management of a drought. Officials said it could consider allocating extra quantities of wheat and rice to low-rain states and a tab on export of farm commodities, mainly wheat and rice.

Pawar, who joined office today after issues related to a week-long standoff in the ruling coalition between the Congress and his NCP got sorted, said the ministry was collecting details from states on the impact of poor rains. He also had a lengthy meeting with Food Minister K V Thomas and India Meteorological Department (IMD) Director General L S Rathore to review the situation.(RAINFALL DEFICIENCY & VULNERABILITY OF STATES)

Home Minister P Chidambaram, Power Minister Sushilkumar Shinde, Petroleum Minister S Jaipal Reddy, Urban Development Minister Kamal Nath and Water Resources Minister Pawan Kumar Bansal are part of the EGoM. Food Minister K V Thomas said production of oilseeds and pulses could be hit because of low rains and as of now there was no plans to stop export.

IMD said it expected the monsoon deficiency to get narrower in the coming days, with improvement in rains. “Although the monsoon is not active, it is not sluggish either,” said Rathore. “The eastern coast, central India and the northeast are getting fairly good rain. Even Maharashtra and parts of the peninsula are receiving rain. The only concern is northwest India and the interior peninsula,” he said.

Monsoon rainfall has been, as mentioned earlier, deficient by 22 per cent so far this year across the country and the situation is worrisome in Karnataka, Maharashtra, Rajasthan and Gujarat. On a week-on-week basis, monsoon across the country was around 20 per cent less during the week ending July 25, a marginal improvement since the 22 per cent deficiency during the previous week.

The sowing of major kharif (summer) crops like rice, cotton, coarse cereals, oilseeds and pulses has been hit. Monsoon rains are crucial for the agriculture sector, which contributes about 15 per cent to the country's GDP, as only 40 per cent of the total cultivable area is under irrigation.