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LATEST NEWS UPDATES | Prime Minister Manmohan Singh seeks consensus on trade policy

Prime Minister Manmohan Singh seeks consensus on trade policy

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published Published on Apr 30, 2012   modified Modified on Apr 30, 2012
-The Economic Times

Prime minister Manmohan Singh is meeting a group of ministers including Finance Minister Pranab Mukherjee, Agriculture Minister Sharad Pawar, Food Minister KV Thomas and Commerce Minister Anand Sharma to arrive at a consensus on trade policies especially in sugar and cotton exports.

Recently, Pawar had criticized the export policies of cotton and sugar. The sugar export is a contentious issue as even after having a surplus production and international demand, the export has hit a road block in the absence of a clear policy.

After notifying the export of 2 million tonne sugar in two tranches this season, the food ministry had to suspend the notification of another one million, which was decided in the meeting of a panel of ministers on March 26. The panel wanted a new and faster mechanism of sugar export, keeping in view the principles of equity and transparency. But even after the elapse of a month, the consensus is yet to be arrived at.

This inertia is hurting the sugar industry, which is sitting on a heap of at least four million tonne surplus sugar. The industry wants to sell it as fast as possible to clear the cane arrears of farmers, which have touched a record high of 10,239 crore. "The government is yet to come out with a fresh mechanism. When the policy has worked well for the last five tranches over two years, what's the need to change it in the mid of the season," said a sugar mill owner.

Pawar, who crafted the existing sugar export mechanism, has now become a self-critic. He believes that the existing mechanism is slow and needs to free up a bit to augment faster exports.

"The policy shift is making us to wait. If there is no consensus on the alternative mechanism, let the sugar move out through the existing one. We already have lost one precious month," said another miller who was in New Delhi to attend a conference of International Sugar Organisation. Currently, the government allocates export quota to individual mills on the basis of actual average production over three years. Now the panel of ministers wants to adopt a new mechanism that could be based on 'first come, first serve' basis.

The Economic Times, 30 April, 2012, http://economictimes.indiatimes.com/news/economy/policy/prime-minister-manmohan-singh-seeks-consensus-on-trade-policy/articleshow/12930379.cms


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