The sugar sector should be decontrolled, removed from the PDS and the tax incidence on sugar manufacturing be rationalised, it said. Similarly, the second generation reforms should be initiated to ensure increased profitability so that the rural poor can also share the benefits of efficiency and productivity improvement.

The Survey said there is also a need for the effective management of the food economy through introduction of comprehensive reforms, including a change in the monopoly of the FCI and the PDS. The food subsidies can be either channelled into guaranteed unskilled manual employment or income supplement system for the poor using smart card technology including stored finger print, it said.

It further said the cooperatives and user groups should be allowed to run irrigation system so that it is properly maintained and regulated for the benefit of the farming community.

According to the Survey, the kharif foodgrains production for 00-01 is estimated to be 102.7 million tonne (mt) compared to last year's 104.9 mt, showing a shortfall in output by 2.2 per cent. Production of kharif rice, estimated at 74.1 mt, would be lower by about 2.6 mt compared to last year's record of 76.7 mt.

Though kharif pulses, estimated at 5.5 mt, is somewhat better than last year's 4.9 mt, production of kharif coarse cereals, despite more area coverage, is estimated to drop to 23.1 mt. The decline, it said, is primarily due to drought conditions prevailing in 71 districts not only in 99 but also in 00. Rabi crop prospects also do not appear to be satisfactory as area sown under rabi crops has been lesser this year primarily due to inadequate post-monsoon rainfall, it said.

Preliminary estimates indicate that rabi foodgrains may at best reach 96.3mt in areas dominated by wheat, which represents a sharp decline of 7.7 mt over last year's rabi output of 104 mt, the Survey said.

The Survey also said the expected wheat production of 70 mt would be 5.6 mt lower compared to last year's output. Whereas Punjab and Haryana may reap a normal wheat crop because of assured irrigation, decline in production would be mainly in MP, Rajasthan, Gujarat and UP, said the Survey. On commercial crops, it said the current year's oilseed output at 18.6 mt is lower by 2.3 mt compared to 20.9 achieved in 99-00.

Soyabean output would be lower by 1.6 mt compared to 6.8 mt achieved last year, while rapeseed and mustard output too would be lower by 1.7 mt to reach 4.3 mt, compared to last year's 6 mt, it said.

Production of jute and mesta is likely to be 9.9 million bales, marginally less than last year's 10.5 million bales, while cotton output of 13.2 million bales is an increase over last year's 11.6 million bales, despite shrinkage in area. Sugarcane is likely to reach a new peak of 300.6 mt against last year's 299.2 mt, said the Survey. Regarding the plantation crops, it said, the recent sharp fall in international coffee prices due to surplus supply has adversely hit the domestic exports.