With more areas declared drought hit on Monday, the Centre has told states to reschedule farmers? crop loans by converting them into medium-term loans, encourage more short-duration crops like pulses, maize and vegetables and ensure adequate availability of non-government certified seeds known as ?truthfully-labelled? seeds.

Speaking to chief ministers at a special session on the drought in the presence of Prime Minister Manmohan Singh, agriculture minister Sharad Pawar said additional agricultural credit to farmers was essential to help them tide over the difficult situation. The Prime Minister assured states that the availability of food would not be a problem because the Centre had huge foodgrain stocks and various employment schemes like NREGA.

The impact of the poor monsoon, allied with a surge in global uncertainty, pushed down the BSE Sensex by 4.07% to a one-month low of 14,784.92.

Pawar accepted that a continued poor rainfall would affect production. ?This will negatively impact the availability (of) foodgrain,? he said. The minister also suggested that as a medium-term strategy, the country should create a national seed reserve and set up drought monitoring centres to ensure a more reliable and timely forecast and mitigation response.

The minister said the government was considering extending the scheme for distribution of cheap pulses through fair price shops and other steps to cool prices of essential commodities, including sugar. ?Besides a check on prices, it is also necessary that the subsidised food available under the public distribution system reaches its intended beneficiaries and diversion of foodgrain is checked,? he added.

Pawar urged state governments to immediately instruct senior officials to visit drought-hit districts and review the progress of measures taken to reduce kharif losses. He also urged them to prepare early plans for the coming rabi season to recoup some of the losses.

?To ensure proper coordination and exchange of information, control rooms must be started at state capitals and district levels and these control rooms must be in regular touch with the central-level control room in the agriculture ministry,? Pawar said.

FM Pranab Mukherjee, home minister P Chidambaram and Planning Commission deputy chairman Montek Singh Ahluwalia also attended the meeting.