After a gap of two years, India will meet a record rice production target of 102 million tonne in the current crop year through June 2012 despite below-normal monsoon rains. This could give the government a necessary ammunition as it battles high food inflation and prepares to widen subsidised grain sales to the poor under an ambitious food security law.

Agriculture Secretary PK Basu told FE on Tuesday that the country will reap a bumper harvest of rice, wheat and pulses and is expected to meet the overall food grain output target of 245 million tonne for 2011-12, compared with 241.56 million tonne in 2010-11.

The country missed its rice output targets in 2009-10 and 2010-11 due to droughts as well as floods in some parts, which forced the government to maintain more-than-three-year-old curbs on the export of non-basmati rice to keep domestic supplies steady.

India, the world?s second-largest grower of rice and wheat, typically sets output targets of key crops each year and tailors around them crucial farm policies, including minimum state-fixed prices for select commodities, subsidised supplies of high-yielding seeds and fertilisers.

?I am 100% confident that we will meet the rice production target this year. The reason is simple. Planting has gone up from the last year level, and importantly, no district has been affected by either drought or flood so far,? Basu told FE. Last year, as many as 90 districts were affected by droughts and 60 districts by floods and rough weather, he added.

?If we could produce more than 95 million tonne of rice in 2010-11 despite such conditions in around 150 districts, we can definitely meet the target this year when chances of a large-scale drought or flood are less,? he said. ?Although the overall rainfall is expected to be slightly below normal this year, the distribution is likely to be fairly good,? he said.

The statements come amid growing apprehension by industry as well as consumers about the government?s ability to rein in food inflation that has remained stubbornly high since a drought in 2009 clipped the summer harvest. Sharp volatility in grains production in the past two years has also brought to the fore the issue of sustainability of the proposed food security Act that aims to supply cheaper grains to 75% of rural and 50% of urban households.

Although food inflation has receded from its multi-year-highs in 2010, the Reserve Bank Of India has raised its key policy rates 11 times since last March to suck excess liquidity from the system in a stern reflection that inflation–partly triggered by food prices–.is still much above its comfort zone.

Although food inflation hinges on a numer of factors, including the increase in state-fixed benchmark prices of key commodities as well as their demand, a bumper grains production will at least provide some cushion against any irrational spiralling of prices.

India needs more than 60 million tonne of rice and wheat stocks a year to meet its obligation under the proposed Food Security Act, and an increase in output will help the government in one of its biggest populist drives, especially when it is struggling to prevent an erosion of its image in the public glare following a slew of corruption charges. Significantly, the government has never procured 60 million tonne in a year.

Basu said water reserves are at a ten-year high, which will help the planting of winter crops from October when the seasonal monsoon shower ends.

More production can also encourage the government to allow exports of wheat and rice since banning the shipments in 2007 and 2008, respectively.