Decontrol the Sugar Industry

A govt. committee headed by Chairman of PM’s Economic Advisory Council , C Rangarajan has Favoured to Decontrol the Sugar Industry , Dispensing Immediately with the Levy Sugar Obligation & Administrative Control on Non-levy Sugar .

According to committee , India contribute 17% to the world sugar production but its share in export is only just 4% . The committee pitched for a Stable Trade Policy and a Moderate Duty of Import & Export & also to Done Away Outright Ban or Quantitative Restrictions on Sugar Trade . Committee points out that Export & Import Policy should not be guided by Domestic Availability. The Committee recommended for the removal of the concept of a minimum distance of 15 kms obligating a mill to buy cane from growers with in the reservation area . Instead , mills must enter into contracts with farmers . This would help phase out the cane reservation area & bonding .

Further , The Committee suggested the State Administered Price (SAP) of sugar cane set by state should be done away with , in favour of the Fair & Remunerative Price (FRP) set by the Central Govt. as minimum . Mills must share 70% of value of suger & each by product , including bagasses , molasses & price-mud (ex-mill) , as cane dues payable to farmers for supplies .

And , on account of payment to farmers , Committee recommended that payment to farmers should be made in two phase : the first , the Minimum FRP and the second subsequent to the publication of half – yearly ex-mill prices . 

Next , Committee says , Rationalization of Sugar Cane Price and Liberalization of Sugar Trade need to be introduced over a period of 2-3 years in a calibrated and phased manner . However , levy sugar obligation & administrative control on non-levy sugar should be done away with .  Under which , the mills are required to sell 10% of their production to govt. at below market price for the poor under the TPDS . Instead , the state that want to provide sugar under TPDS might procure from open market through competitive bidding and also fix the issue price .