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UPDATE 1-Morocco cereal crop to fall 70 pct after worst drought in 30 years

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By Aziz El Yaakoubi

RABAT, May 10 (Reuters) - Morocco is expected to harvest a cereal crop of 3.35 million tonnes, down 70 percent from last season's record 11 million tonnes, after the worst drought in 30 years, the agriculture ministry said on Tuesday.

Abnormally dry weather across the country is threatening to add to the financial risks for Morocco's government just as it seeks to spur economic growth and cut public spending.

Agriculture accounts for more than 15 percent of the economy and the weak harvest is expected to slow growth. Morrocco's central bank expects the economy to grow 1 percent in 2016, slowing sharply from 4.4 percent in 2015.

The harvest includes 1.86 million tonnes of soft wheat, 870,000 tonnes of durum and 620,000 tonnes of barley, the ministry said in a statement.

Rainfall was 43 percent less than an average year and 45.5 percent less than last season, which makes this the worst season in 30 years, with 98 dry days between November and February.

However, the ministry said the drop in agricultural gross domestic output would be contained at 7.3 percent or 110 billion dirhams ($11.45 billion) thanks to other non-grain cultivations in irrigated areas.

The U.S. Department of Agriculture attache in Morocco said in a report last month that Moroccan cereal imports would reach 4.6 million tonnes in the 2016/17 season, including 3.9 million tonnes of wheat and 0.7 million of barley.

For the current season, analysts and traders expect cereal imports to remain less than 3 million tonnes, as last year's bumper harvest has helped mitigate the impact of the drought.

Rising food import costs come at a delicate time, as Morocco faces protests over austerity measures and unemployment in an election year. It will hold a parliamentary election on Oct. 7, the second ballot since the Arab Spring-like protests five years ago.

Agriculture is the country's biggest employer, with nearly 35 percent its workforce, but the majority of cereal-planted areas are small properties owned by subsistence farmers. ($1 = 9.6070 Moroccan dirham) (Reporting By Aziz El Yaakoubi; Editing by David Goodman and David Evans)

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