Agriculture minister Sharad Pawar, on Saturday, called for abolition of levy system for ensuring growth of the sugar industry despite the cabinet deferring a decision to decontrol the sugar sector on Friday .
?We have got good stocks of about 11 million tonne as carry-over and we expect a good production. So this is the proper time when there is ample stock of sugar, one should take that decision,? Pawar said at the sideline of National Seminar on ?Seed & Crop Technologies for Doubling Agricultural Production?, organised by the national seed association of India.
He said the food ministry has submitted a proposal to the Cabinet that financial allocation should be provided to states for purchasing sugar from the open market instead of continuing with the levy.
?Whatever the gap between the levy and open market prices, up to Rs 4-5 per kg will be provided by the Centre to the states where they can make available sugar in the public distribution system,? he said. According to the current policy, sugar companies are mandated to give 10% of their open market sale quota to the government at lower than the market price, which is known as levy sugar. The government fixes the quota for each producer on a monthly basis to sell sugar in the open market.
Science and technology minister Kapil Sibal had, on Friday, said the issue of sugar decontrol has been ?deferred?.
The sugar industry expects production to decline to 20 million tonne during 2008-09 season starting October, compared to an estimated 26.5 million tonne in the current season ending September. During 2006-07, India produced a record 28.3 million tonne while the annual demand is 20 million tonne.
Due to favourable stock position, the sugar retail prices is in the range of Rs 17 and Rs 20 a kg. But rates have started go northward in the last few weeks to Rs 19-22 a kg.