Noting that sugar industry would be the priority area after Food Bill, Food Minister KV Thomas today said the government will consider the demand for partial decontrol of the sector after Parliament session gets over.
The minister also said the government would consider further export of sugar at an "appropriate time", which would be favourable for the industry. Last month, an export of one million tonnes was allowed under Open General Licence (OGL).
"There is a request from the industry as well as farming community that there are too many controls on the sector. One is levy sugar, which we allocate to States for distribution through ration shops.
"After this Parliament session, I will discuss the issue [removal of levy sugar system] with Finance Minister Pranab Mukherjee and Agriculture Minister Sharad Pawar," Thomas said on the sidelines of the AGM of Indian Sugar Mills Association.
At present, sugar mills are required to contribute 10% of their production to government (called levy sugar) for public distribution system (PDS) at a cheaper rate.
"We have committed to States to provide sugar at subsidised price... After this session, we will have detailed discussion with Finance Minister on how this can be reasonably resolved," Thomas said, adding that detailed discussion was required as this involved financial implications.
Making a demand for removal of levy sugar, ISMA President Narendra Murkumbi pointed out that the compulsion to supply 26 lakh tonnes of sugar for the PDS at a discounted rate causes losses of around Rs 3,000 crore to the industry every year.
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Addressing the function, Thomas said the issue of decontrol involves a large number of stakeholders -- farmers, mills, states and consumers -- and a consensus needed to emerge on this issue.
Besides removal of levy sugar obligations, the industry has been demanding end of monthly release mechanism, under which food ministry fixes the quantity of sugar that mills can sell in the open market every month.
Expressing concern over cyclical nature of sugar industry he said there was a need to tackle this phenomenon through long-term solution.