Despite severe drought in fiscal 2002-03, India's agricultural output is enough to sustain the country, Union Agriculture Minister Ajit Singh said on Thursday.

"We had one of the worst drought situations last year and even though we experienced a dip in agricultural related activities, the production is commendable,” Singh told reporters at an agriculture summit organised by the Confederation of Indian Industry in Mumbai.

The kharif season crops fell by 16 per cent, while there has been a shortfall in rabi season crops, especially oil seeds, pulses and wheat, the minister added.

However, he admitted that cost of production and other expenses related to farming had gone up due to an increase in diesel and other fuel prices.

The minister said a proposal to collect Rs 800 crore (Rs 8 billion) to be disbursed as agricultural loans was forwarded to the government. The proposals, based on recommendations of P K Patil Committee, were expected to be implemented soon.

Under the recommendation, 40 per cent of the credit would be provided by the Centre, while the rest by the individual states.

This was in contrast to the existing practice of collecting 40 per cent contribution from the Centre, 50 per cent by states and rest from corporates, he added.