Food ministry hastens action on sugar decontrol

Last Updated: Wed, Nov 07, 2012 04:13 hrs

The food ministry is hopeful that at least two major recommendations of the Rangarajan panel on sugar decontrol, on abolition of levy sugar and the release order mechanism for mills, would be implemented in the next two months.

"We don't want the recommendations to meet the same fate as the other reports on sugar sector decontrol and have started internal discussions to expedite the implementation of some part of the report," a senior ministry official said.

Food Minister K V Thomas on Tuesday met Prime Minister Manmohan Singh and Agriculture Minister Sharad Pawar to discuss how the recommendations could be implemented at the earliest. The department of food and consumer affairs has received the recommendations from the Prime Minister's Office.

"There are seven-eight recommendations and all of them cannot be implemented in one go because many involve discussion with state governments like the revenue-sharing arrangement between mills and farmers for a Fair and Remunerative Price (FRP) and the distance criteria between mills. But some of the suggestions can be done right away and abolishing the levy sugar mechanism and release order is among these," said the official.

Under the levy mechanism, all sugar mills must sell a certain percentage of annual output to the government at rate set by the latter, much below the market price. The government, in turn, distributes this through the Public Distribution System (PDS). Under the release order mechanism, the government determines the extent of sugar that each mill in the country can sell in the open market.

"We’ve called a meeting of sugar directorates and commissioners in January to discuss the Rangarajan proposals and would like to discuss these with state governments as well," said Thomas.

C Rangarajan, who chaired this panel, heads the Prime Minister's Economic Advisory Council. Their report suggested a revenue-sharing model for determining the price of sugarcane, along with dispensing with the levy sugar and distance criteria for mills. It said states wishing to provide sugar under the PDS should buy it from the open market through a competitive bidding process and themselves fix the price at which they want to sell this through ration shops.

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