Indian drought threatens rice, sugar output

NEW DELHI, August 19, 2009 (AFP) - India said Wednesday it would step up its food distribution programme for the poor as a widening drought threatened to cut rice production by 10 percent and sharply reduce sugar supplies.

Agriculture and Food Minister Sharad Pawar also said the government would consider releasing wheat and rice from its reserves into the open market if their prices, which have already shot higher, increase further.

The monsoon rains, which sweep the country from June to September, are running at 29 percent below normal.

"Ten states have declared 246 districts drought-affected," Pawar said in the Indian capital. India has 626 districts.

"A shortfall in the monsoon may result in the area under paddy coverage falling by about 5.

7 million hectares (from last year) and the production of rice may be reduced by 10 million tonnes," or 10 percent, he said.

India produced 99.15 million tonnes of rice in the financial year 2008-09.

Pawar said the national government would provide extra food grain to states in case it is needed for distribution at low prices.

Pawar said some shortfall in oilseeds and sugarcane output was also expected, adding the government may raise the amoun