Sugar decontrol decision depends on production next year: Pawar

Hoping to take advantage of good sugar production and lower prices, Food and Agriculture Minister Sharad Pawar today favoured ending government's role in fixing sales quota on industry.

Stating that industry associations have been demanding decontrol, he said a decision on this could be taken if there
is good production in the next crop year starting October.

The minister, however, assured that the government would continue to fix the support price of sugarcane for farmers.

The government controls the sugar sector right from fixing the support price of cane to allocating the monthly quota of sugar that mills sell in the open market.

"Industry bodies have written to us saying that this is the time when the government should consider (on decontrolling the sector). We are dicussing and assessing the entire situation," Pawar said on the sidelines of a sugar conference.

He said the government will have an estimate of sugarcane planting and sugar output of 2010-11 by September first week. Sugar year runs from October to September.

"Based on the assessment, we will take a final decision (on decontrolling sugar sector) and recommend to the Cabinet. Till then, we will not recommend," Pawar said categorically.

Asked whether the ministry would propose full decontrol or it would be in a phased manner, he said, "One thing is for sure, the right to fix the support price of cane for farmers will definetely be with the government."

Earlier addressing the conference, Pawar pointed out that the sugar sector is the only industry under the government control and said this is a right time to withdraw controls as output during next crop year would be on higher side and prices will be reasonable.

"I honestly feel this is the time where the government, NFCSF and ISMA (industry bodies) should sit together and take some of the major policy decisions. My thinking behind is that this is the only industry in the country which has too much controls from the government side.

"And the time has come from the government side to give a second thought about this approach. If we have to give a second thought, we have to withdraw the government controls on sugar industry and give a full freedom to those who are managing the industry like others," Pawar observed.

Noting that the next crop year would be a good year for both consumers and farmers, the minister said some "drastic decision" could be possible to take. "Definitely, we are ready to discuss with NFCSF and ISMA and take a collective decision, which will show a new path to the sugar sector".

Pawar said the country would have enough sugar production next crop year to meet the annual demand of 23 million tonnes. India is estimated to produce 18.5 MT in 2009-10 crop year.

source: hindustantimes