Sugar tasted sweeter this yr, industry sees decontrol in 2013

Dec 25 2012, 16:24 IST
Comments 0
SummaryCentre asks mills to contribute 10 per cent of output to run the ration shops.

Sugar tasted sweeter this year for the Rs 80,000 crore industry which saw bumper production, higher exports and signs of freedom from government control, but consumers had to pay Rs 10 per kg more for the commodity through the year.

High retail prices helped sugar industry recover costs and clear almost entire cane payments to farmers -- worth Rs 52,000 crore in 2011-12 marketing year (October-September).

The year started on a good note with the Prime Minister appointing an expert panel in January to examine the decontrol of the sugar sector, ending on a hope that 2013 could be a landmark year with government freeing the only industry left under its control. Sugar industry, on which five crore cane farmers depend, is controlled right from fixing the cane price to marketing of the sweetener.

Much to the industry's liking, the expert panel headed by PMEAC Chairman C Rangarajan submitted a positive report on the decontrol of sugar sector in October with recommendation of immediate removal of two major controls - regulated release system and levy sugar obligation.

Through the release mechanism, the Centre fixes the sugar quota that can be sold in the open market and under the levy system, it asks mills to contribute 10 per cent of output to run the ration shops costing industry Rs 3,000 crore a year.

Even before the report was submitted, the government had started to loosen its grip on the sector by relaxing the regulated release mechanism in April from monthly basis to quarterly, and then later to a four-monthly exercise. The move has helped mills manage inventories and cash-flows better.

The government has hinted that it would eventually phase out sugar quota allocation for open market sale. It has also started the consultation process with states on removing levy obligations and sugarcane pricing.

At the fag end of the year, Food Minister K V Thomas assured the industry leaders that Rangarajan report would not meet the fate of earlier reports.

"The decision on some of the recommendations will be taken in the next 4-5 months. It will take some time, we cannot take decision in haste. We are taking views of the state governments," Food Secretary Sudhir Kumar said.

Way back in 1971-72 and 1978-79, the government had made attempts on decontrol. Agriculture Minister Sharad Pawar also tried for the decontrol in 2010 when he was holding the charge of Food Minister, but without any result.

Besides some

Single Page Format
Ads by Google

More from Sugar

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...