 "Sugar cooperatives cannot afford a laid-back attitude: Harshvardhan Patil")
Welcoming the Centre’s partial decontrol of the sugar sector, Harshvardhan Patil, minister of cooperatives in the government of Maharashtra, says there should be no tampering with this decision for at least some years. The commodity should also, he tells Sanjay Jog, be removed from the ambit of the Essential Commodities Act. Edited excerpts:
Will the partial decontrol on sugar help cooperative factories in Maharashtra?
Certainly. With the removal of the 10 per cent levy obligation, an individual factory will benefit by at least Rs 65-90 a quintal. The difference between the market price and the price at which factories had to meet the levy obligation was huge. Now, factories can make good those losses.
Would cooperative factories, struggling to cope with the rising mismatch between cost of production and the ex-mill price, be competent enough to function in the decontrol regime?
What is your comment on the government's decision to do away with the release mechanism?
This is another positive for factories. It was binding for factories to sell the quota fixed by the government during the stipulated period. If they failed to do so, there was every danger of conversion of that unsold quota into a levy sugar quota. Now, factories can dispose of the sugar at one go or in parts, depending on market conditions. They will now not be forced to sell sugar below the cost of production.
Can you give a guarantee to cooperative factories that the decontrol will not be revoked in the wake of a surge in sugar prices, especially ahead of elections?
In fact, we want that the decontrol remain in place for at least five years. It should not be revoked. Factories want that there should be consistency in the CCEA's decision on decontrol.
The Centre has not removed sugar from the Essential Commodities Act (ECA) which has been pressed by the state government and factories. Will it be pursued further?
The ECA of 1955 was enacted when sugar production was much less in comparison with domestic demand. The scenario has undergone a change and there is no need for retaining sugar in the ECA. Controls are now barriers for business activities of the industry. We will certainly pursue the issue with the Centre.
Will the partial decontrol on sugar help cooperative factories in Maharashtra?
Certainly. With the removal of the 10 per cent levy obligation, an individual factory will benefit by at least Rs 65-90 a quintal. The difference between the market price and the price at which factories had to meet the levy obligation was huge. Now, factories can make good those losses.
Would cooperative factories, struggling to cope with the rising mismatch between cost of production and the ex-mill price, be competent enough to function in the decontrol regime?
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The fittest will survive. Cooperative factories will have to gain further skills to act on the market conditions. The sugar market is not easy to handle and factories which do proper planning will benefit. Those which read the market well would benefit a lot. Those with a laid-back attitude will lose heavily. There are 202 registered cooperative sugar factories, apart from about 70 private mills in the state. Factories are already reeling under a financial burden due to low realisation. I feel cooperative factories will have to create a think-tank to act swiftly in the decontrol environment.
What is your comment on the government's decision to do away with the release mechanism?
This is another positive for factories. It was binding for factories to sell the quota fixed by the government during the stipulated period. If they failed to do so, there was every danger of conversion of that unsold quota into a levy sugar quota. Now, factories can dispose of the sugar at one go or in parts, depending on market conditions. They will now not be forced to sell sugar below the cost of production.
Can you give a guarantee to cooperative factories that the decontrol will not be revoked in the wake of a surge in sugar prices, especially ahead of elections?
In fact, we want that the decontrol remain in place for at least five years. It should not be revoked. Factories want that there should be consistency in the CCEA's decision on decontrol.
The Centre has not removed sugar from the Essential Commodities Act (ECA) which has been pressed by the state government and factories. Will it be pursued further?
The ECA of 1955 was enacted when sugar production was much less in comparison with domestic demand. The scenario has undergone a change and there is no need for retaining sugar in the ECA. Controls are now barriers for business activities of the industry. We will certainly pursue the issue with the Centre.