India should emulate the Brazilian process of decontrolling the sugar sector by moving gradually, as sudden freeing of the sector could hurt farmers’ interest, an international sugarcane body said today.
Brazil, the world’s largest sugar producer, took around seven years to make the sector free from the government controls in 1997, fuelling sustained growth.
“We took seven years to decontrol the sector. India needs to follow a gradual process. If deregulated too quickly, there could be problems with farmers. It has to go step by step, so that agents, particularly farmers, can adjust accordingly,” Brazilian Sugarcane Industry Association President Marcus Jank told reporters on the sidelines of a conference here.
To start, India can do away with the monthly release quota system and levy sugar that the millers have to provide to the government at a subsidised cost for distribution through the public distribution system, Jank suggested.
From production till distribution, Indian sugar is controlled by the government. The food ministry allocates the monthly quota that mills sell in the open market, as well as through ration shops.
Besides that, mills are required to sell 20 per cent of their output to the government for distribution under the PDS.
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Food and Agriculture Minister Sharad Pawar had recently said the time was ripe for freeing the sector from all government controls and a proposal in this regard would be ready soon. Industry bodies have been demanding total decontrol to bring competitiveness and porfessionalism.
“Total decontrol is likely to be very complicated. In Brazil, we started decontrolling in 1991 and completed the process in 1997, as it takes time to establish. India has much more farmers, so it has more social responsibility than ours,” Jank said.
However, highlighting the merits of total decontrolling, he said since the era began in 1991, production of sugar in Brazil had gone up by five timers till 2010. Jank said sugar production in Brazil for the 2010-11 sugar year would be around 37 million tonnes.