Policymakers will be the last to admit it, but it is increasingly clear to everyone else that 2012 will likely be marked as another drought year. If the current dry spell in most parts of the country extends to most of August, it could severely hit production of a clutch of food crops akin to the situation in 2009 when a drought scorched rural India and pulled down farm GDP growth to 1%.

While agriculture minister Sharad Pawar on Thursday uttered the D word, food minister KV Thomas and Forward Markets Commission chairman Ramesh Abhishek said if need be, futures trading in some farm items could be banned to curb price fluctuations.

Independently, Crisil said in a report on Thursday that the actual progress of the monsoon did indicate the risk of a drought, adding overall rainfall deficiency till now was similar to that in 2009. On the agency?s DRIP yardstick for estimating the impact of deficient rain on farm output, production in Gujarat, Rajasthan, Maharashtra, Karnataka and MP is likely to be hit the most by poor rainfall. Crisil?s deficient rainfall impact parameter (DRIP) is based on the premise that both the availability of irrigation and the level of precipitation affect crop production.

Crop-wise DRIP scores show that coarse cereals (jowar, bajra) oilseeds (groundnut, soyabean) and pulses (tur) have been impacted the most by deficient rains. For most of these crops, which are crucial in rural India?s consumption basket, the DRIP score is higher than that in 2009, indicating the increased impact of the imminent drought on people.

However, while the overall rain deficit as of now is 22% (it was 23% during all of the 2009 monsoon season), with particularly weak rainfall in the northwest, central and southern peninsular regions, the weatherman has not given up. On Thursday, the India Meteorological Department said the deficiency would ?fill up in the coming days? as the monsoon is likely to improve in the eastern, central and Indo-Gangetic plain. Not everyone would pay heed though. Earlier this week, the Prime Minister?s Office said the monsoon was likely to be on the lower end of the range while Pawar said on Thursday that the empowered group of ministers on drought would meet the coming Tuesday.

Pawar was recently made head of the group, after Pranab Mukherjee quit the post.

According to Crisil, Rajasthan and Madhya Pradesh not only have high incidence of rural poverty but also high dependence on agriculture. ?Providing relief to these sates will translate into a higher burden on the exchequer.? It added : ?… the crop damage will be limited in regions where the rainfall situation improves in July/August 2012. But in regions where rainfall continues to remain scanty/deficient, the damage that has already been done to kharif crops cannot be sufficiently mitigated even if monsoons bounce back. However, a bounce-back of the monsoon in August and September will improve the ground water situation and help the (rabi) crop.?

Farm secretary Ashish Bahuguna recently said sowing was picking up despite the monsoon deficit, adding the situation hasn?t so worsened that the country needs to curb farm exports. Sounding optimistic, Bahuguna said 2012 wouldn?t be another 2009. Still, analysts expect a fall in the output of rice, coarse cereals, pulses, oilseeds, cotton and sugarcane. Although Punjab and Haryana have received deficient monsoon rains, sowing in Punjab is over and more than 70% of planting in Haryana has been completed. About 95% of farmland in Punjab is irrigated and so, the monsoon doesn?t impact crop much.

However, Crisil believes that kharif production will be hit as sowing of quite a few crops has been negatively impacted. ?At the all-India level, area sown till July 13 was around 19% lower than that during the corresponding period last year. In addition, yields of crop that have been planted will suffer. This will shave off some part of GDP. If monsoon continues to remain below normal in August, GDP growth could fall below 6% from our current expectation of 6.5%,? the agency said, in a report titled ?Monsoon: 2009 situation yet again??

While prices of wheat and rice are stable, rates of sugar, pulses and vegetable are showing an upward trend, the government noted. A proposal for increase in subsidy for supply of pulses through the public distribution system to the poor is being brought before the cabinet committee on economic affairs by the ministry of consumer affairs, food and public distribution. FMC?s Abhishek said: ?We are going to be very alert and not allow traders to manipulate prices. We will ban if need be.? Crisil said food inflation, which is already high, will face further pressure due to poor rainfall. The prices of pulses and coarse cereals, which are rain-fed crops and for which no buffer stocks exist, could flare up. Prices of oil seeds are expected to rise further because of lack of adequate sowing due to lower acreage. This will push up the WPI-based inflation beyond 7% that we have forecast in our base case scenario.? Thomas had earlier hinted at imposition of stock limits to curb hoarding.

Pawar said it would be difficult for farmers to match last two years? production levels as monsoon is ?playing hide-and-seek? this year. However, Bahuguna said the country would achieve the grain production target of 245 million tonnes for the crop year through June 2013, although cereals output target may be trimmed. The country harvested a record 257.44 million tonnes of food grains in the year through June, compared with 244.78 million tonnes a year before, which was also an all-time-high crop until then. Food grain production in 2009-10 was 218.2 million tonnes, thanks to a good rabi harvest.

Area under the paddy crop until July 20 rose almost 50% from a week earlier to 14.45 million hectares, but it?s still 10.34% lower than a year before and 5.72% below the normal average by that time, farm ministry data show. Cereal planting more than doubled to 9.54 million hectares until Friday from the previous week, but coverage is still 24.4% below normal average. Area under pulses roughly doubled to 4.01 million hectares from a week before, although it is still 22.4% lower than the normal coverage. Similarly, planting of oilseed rose from the past week to 10.88 million hectares, almost the normal level, while cotton coverage trailed the usual average by 7% at 8.37 million hectares. Sugarcane planting, however, has gone up by around 4% from normal average to 5.28 million hectares.

India, the world?s second-largest vegetable oils buyer, imports around half of its annual requirement of cooking oils and one-fifth of pulse needs. Any fall in oilseed and pulse production would potentially drive up domestic prices.

Prime Minister Manmohan Singh recently directed all departments and ministries to coordinate with states to meet any eventuality and monitor the monsoon situation on a weekly basis. A statement by the PMO this week said rainfall deficiency has reduced from the June level, but the intensity and spread of showers over the next week or so needs to be watched carefully, especially in Karnataka, Maharashtra, Gujarat and Rajasthan. ?The progress of the Monsoon so far has not allayed earlier concerns,? it said.