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India Hoping for 'Rich' Harvest of Rice, Corn, Soya Bean

Indian agriculture officials say they expect a rich harvest of food grains this year following abundant rains mid-way through the monsoon season. From New Delhi, Anjana Pasricha reports the anticipated increase in food supply could help the country battle high food prices.

India is just mid-way through its monsoon season. But already, adequate rains have given farmers reason to cheer.

In a country where only 40 per cent of farmland is irrigated, monsoon rains that drench India from June to September are critical for farmers.

Agriculture Minister Sharad Pawar says he is expecting a "rich harvest" of rice, corn and soya bean crops this year due to the well-distributed rains. That would follow a record output of wheat earlier in the year.

This is good news for India, where millions of poor people have been hurt by higher food prices.

Economist Saumitra Chaudhuri, a member of the Prime Minister's Economic Advisory Council, says high food grain production will reduce pressure on domestic food prices.

"Food is a particularly sensitive item," said Chaudhuri. "Most of the consumption basket of poor people consists of food, and a good harvest essentially helps us to keep prices under control."

Officials say India will not need to import wheat this year, as it has the last two years. The government has bought about one-third of the production from farmers, filling its granaries and easing concerns of scarcity.

However, India is unlikely to lift a ban clamped earlier in the year on exports of most varieties of rice. The ban contributed to rising prices of rice in the world.

Chaudhuri says international grain prices are too high for India to risk lifting the ban.

"I think what the government really does not ever want to do in this situation is to become an importer for whatever reason, because then whatever check that has been placed on food prices so far will really come unstuck, so I think they would probably wait for grain prices to come to more reasonable levels before they review this particular ban," added Chaudhuri.

India is the world's second biggest producer of wheat and rice, and some years ago, it exported surpluses. But declining agricultural productivity in recent years has raised concerns that the country may no longer produce enough food to feed its population of over one billion, putting further pressure on a world where food scarcities are emerging.