Govt allows free export of sugar in 2012-13

Last Updated: Mon, Oct 15, 2012 19:36 hrs

The government today said sugar mills would be allowed to ship the product abroad in the 2012-13 crop marketing year without any curbs.

The decision comes days after the Rangarajan committee has favoured lifting of any restriction on export or import of the commodity.

Food Minister K V Thomas said all decisions on the remaining recommendations of the panel—headed by Chairman of Prime Minister’s Economic Advisory Council C Rangarajan—would be taken in a time-bound manner. “We have decided to extend the time for sugar exports under open general licence (OGL) for another year,” Thomas told reporters here after meeting Agriculture Minister Sharad Pawar.

He said the food and agriculture ministries are of the view that the government should not adopt a “switch-on and switch-off” trade policy on farm items. Sugar exports were placed under OGL in 2011-12 as production surpassed domestic demand. In earlier years, the government had banned exports before allowing limited export in tranches.

The Rangarajan panel, among other things, had recommended phased decontrol of the sugar sector, removal of obligation on part of mills to supply 10 per cent of sugar at cheaper price to the government to meet the ration shops demand, freedom to mills to decide on the quantum of sugar to be sold in the open market. It has also favoured a revenue-sharing arrangement between farmers and sugar millers .

“It (Rangarajan panel report) will not meet the fate of earlier reports and a time-bound decision will be taken after receiving views from the PMO (Prime Minister’s Office),” Thomas said.

The panel is the third committee formed by the government to study reforms in the sugar sector.

Suggestions of earlier panels—Tuteja Committee and Thorat Committee—have not been implemented yet.

In 1971-72 and 1978-79, the government had made attempts to decontrol the sector. In mid-2010, former food minister Sharad Pawar initiated efforts in this regard.

In its other recommendations, the panel has also recommended doing away with the cane area reservation and minimum distance criteria, besides suggesting the removal of controls on by-products such as molasses.

The government estimates the country’s sugar production in 2012-2013 to be 23 to 23.5 million tonnes (mt) against the local demand of about 22 mt. India exported 3-3.5 mt of sugar in the 2011-12 crop marketing year that ended on September 30.

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