Pawar pushes for sugar decontrol

Food and Agriculture Minister Sharad Pawar has reportedly made a detailed presentation to the Prime Minister on the issue of deregulating the sugar sector. According to Pawar's plan, the Centre should buy sugar at prevailing market prices for the public distribution system (PDS) directly from the open market in the new sugar year starting October. At present, mills are obliged to sell 20% of their sugar produce to the Central Government for distribution under the PDS at almost half the market price. The Centre also directs each month how much sugar should be released for the open market sale. Under decontrol, this release mechanism will be discontinued and sugar mills will be free to sell their produce as they wish.



Farmers would be able to sell sugarcane to the mills that pay the highest price and not stick to a specific cane area under the decontrol scenario, Pawar is believed to have told the PM. He is also understood to have said that sugar prices would become less volatile after decontrol. At the same time, the Agriculture Minister has made it clear that the Centre would fix the fair and remunerative price (FRP) for sugar cane even after decontrol. The chances of higher output in the coming year is giving room for the Government to consider this major change. The Government has pegged sugar output for the coming year (October-Sept 2010-11) at 23 million tonnes, while the sugar industry and analysts have predicted production between 23mt and 28mt.