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LATEST NEWS UPDATES | Pawar pushes for sugar decontrol, presents case before prime minister

Pawar pushes for sugar decontrol, presents case before prime minister

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published Published on Sep 3, 2010   modified Modified on Sep 3, 2010

NEWDELHI: Food, PDS and civil supplies minister Sharad Pawar made a big pitch toPrime Minister Manmohan Singh here on Thursday on sugar sector decontrol. Heplaced a plan for the Centre to buy sugar at prevailing market price for thepublic distribution system (PDS) directly from the open market in the new sugaryear starting October.


If this goes through in the coming season,sectoral decontrol would be attained after 15 years of waiting for the rightenvironment. Past attempts to remove government control on the sweetener have sofar failed because of acute concerns over price fluctuations and food inflation.


But the chances of higher output in the next year is giving room forthe government to consider the major change.


While pushing the casefor decontrol, Mr Pawar is understood to have made a “detailedpresentation” to the prime minister on the advantages of sugar sectordecontrol to the retail consumers and to the cane farmers.


Farmerswill be able to sell sugarcane to the mill that pays the highest and not stickto a specific cane area under the decontrol scenario, Mr Pawar said. Mills hadasked that the designated cane area for each sugar mill not be disturbed underdecontrol. He is also believed to have maintained that sugar prices would becomeless volatile after decontrol.


Crucially, Mr Pawar had made it clearthat the Centre would continue to fix the fair and remunerative price (FRP) forsugar cane even after decontrol.


According to the industry, the bigsugar output projections made for 2010-11 is the “ideal environment”for pricing and marketing decontrol, a move that would allow sugar price to bedictated entirely by the market. While the government has pegged sugar outputfor the coming year at 23mt, sugar industry, including global analyst KingsmanSA, has pegged production at anywhere between 23mt and 28mt.


Atpresent, mills are obliged to sell 20% of their produce to the government fordistribution through PDS. Purchase of sugar for PDS from the open market by theCentre would mean that sugar mills will no longer be directed each month by thegovernment’s release system. In short, a cornerstone of sectoralderegulation would be conclusively laid by the government.

http://economictimes.indiatimes.com/news/economy/policy/Pawar-pushes-for-sugar-decontrol-presents-case-before-prime-minister/articleshow/6482721.cms


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