Thorat panel calls for sugar sector decontrol

The Centre, which had appointed YSP Thorat committee to study sugar economy, is in the midst of finalisation of its recommendation. The committee is unanimous over decontrol of sugar industry. However, the committee is of the view that it should be done in two phases.

Present month to month sugar release mechanism be replaced and it should go to three months and subsequently to six months. Thereafter, it should be decontrolled. The committee has also suggested that all incentives given to the sugar industry be WTO compatible. The present buffer stock system be replaced by a new mechanism wherein the Centre will procure sugar during excess production and sell it during deficit.

It said the financial institutions such as LIC can be involved to mobilise necessary funds for this purpose. The committee is expected to submit its report to the government by end of September.

It has recommended a sugarcane price stabilisation fund by making budgetary provision for the same. The committee is of the firm view that necessary resources for the proposed sugarcane price stabilisation fund should not be mobilised from farmers and consumers but it can also be raised through the sugar cess in addition to a budgetary provision.

Moreover, the committee has favoured a Thailand cane and sugar fund for the benefit of sugar industries. Sources told FE, “In Thailand the initial price is fixed before the crushing season on the estimates of sugar production.

In case of less production and low price against the estimates, farmers are given assistance through cane and sugar fund.”

On the location of sugar mill, the committee has suggested that present limit of 15 km between two units be increased to 40 km taking into consideration the availability of sugarcane and the viability of the sugar mill.

source:financialexpress