The Indian Sugar Mills Association (ISMA) and National Federation of Co-operative Sugar Factories (NFCSF) in a recently-held press conference have urged the government to immediately implement the Rangarajan panel recommendations that call for lifting of all controls on the sugar industry.
Leading sugar industry representatives, speaking at the meet, called for immediate decontrol of the sector, saying it would result in a gain of over Rs 3,000 crore and benefit mills and cane-growers as well as consumers.
Abinash Verma, director-general, ISMA, said, “The decontrol would boost sugar industry's growth and it would benefit both farmers and the consumers.”
He added, “The direct financial implication of the decontrol would be around Rs 3,000 crore. Apart from this, there will be savings on processing and inventory costs etc.”
A committee headed by C Rangarajan, chairman of Prime Minister’s Economic Advisory Council, in a report last month, had submitted to the Prime Minister, recommendation to lift all controls on the industry.
Among the steps, the panel suggested 70:30 per cent revenue sharing of sugar sale between farmers and millers and scrapping the present levy system that required mills to sell 10 per cent of the output to the government at cheap rates for supplies through state run fair price shops. The committee also called for scrapping of mandatory rule that requires sugar to be packaged in jute bags.
Jayantilal B Patel, president, NFCSF, echoed, “Unnecessary controls and regulations by the government were negatively impacting sugar industry and farmers.”
“I urge the government to seriously take the Rangarajan panel recommendations and implement it with immediate effect. This is the fourth expert committee report in the last 31 years and we are urging the government for its immediate implementation for the growth of our sugar industry which is not growing at par with other industries in India,” informed Patel.
Gautam Goel, president, ISMA, said, “The decontrol would pave the way for huge investments in sugar industry. This industry has been stagnating in the last five-six years. There is hardly any new investment and people are sceptical because of uncertainties.”
“India is the second largest producer of sugar at nearly 340 million tonnes and the annual output is worth around Rs 80,000 crore (around $ 15.5 billion). The industry impacts the livelihood of 50 million farmers and employs 5 lakh people directly at the mills,” stated Goel.
He added, “The sugar industry would grow at an average annual rate of 15-20 per cent for the next 5 years if Rangarajan Committee recommendations were implemented.”
As per the panel assessment, the size of the Indian sugar industry would double at Rs 1,60,000 crore in the next five years if it was freed from government controls.
Rangarajan Committee Recommendations:
1) Discontinuance of the policy of cane area reservation followed in some sugar producing states with an intention to give freedom to farmers to choose the buyers for their sugarcane.
2) Determination of sugarcane price by linking it to the revenue realised by sugar mills from sale of sugar and first stage by products.
3) Removal of the minimum distance of 15 km/25 km between two sugar mills.
4) Removal of obligation from the sugar industry to supply 10 per cent of their production as levy sugar for the PDS at a discounted price.
5) Abolition of the regulated release mechanism under which the sugar mills are told every month/quarter to sell a certain fixed quantity of sugar. Non-compliance of the same invites penal action or conversion of unsold quantity into levy sugar.
6) A freer international trade policy wherein quantitative controls and time restrictions on export and import of sugar should not be prescribed by the government. Instead, the government should follow a tariff rate policy to manage the import/export of sugar as per the requirement in the country.
7) Exempt sugar from compulsory packing order under the Jute Packaging and Marking Act, 1987, which will give freedom to the sugar mills to decide on the packaging material to be used as per availability, quality and pricing.
8) A market determined pricing policy for the sale of byproducts like molasses, bagasse and press mud, giving full freedom to the mills to sell these products and any value-added products thereof.
