Sugar cooperatives seek decontrol

Taking cue from private sugar mills' demand for decontrol, the cooperatives are also now seeking decontrol of the sugar industry.

"We would recommend the withdrawal of certain controls to the government. Keeping in mind the bumper production, this is an appropriate period to introduce decontrol", said Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories.

The government control of the sugar industry is having a detrimental effect on the domestic sugar sector. Decontrol would ensure removal of sugar from the list of essential commodities, added Kumar.

There are about 298 sugar mills in the cooperative sector and 232 in the private sector. The private sugar mills have long been seeking decontrol.

At the 72nd annual general meeting of the Indian Sugar Mills Association (ISMA) held recently, the outgoing president of the association, C S Nopany said, "There are a number of controls that have become archaic and needs to be removed for the healthy development of the industry. The regulated release mechanism and the obligation to supply 10 per cent levy sugar are two such controls."

"The government should withdraw the regulations over the sugar industry to allow it to grow better", the Union Agriculture Minister Sharad Pawar too had said at the ISMA meeting. It is highly probable that some of the decontrols would be removed in the next calendar year.

The Tuteja Committee under the former Food Secretary S K Tuteja has already recommended the withdrawal of the monthly release mechanism.

The sugar mills can sell only that quantity in the market, which is allowed by the Directorate of Sugar under the union Agriculture Ministry on a monthly basis.

The Directorate releases large quantities of sugar whenever the price goes to a certain high. Mills are also under obligation to supply 10 per cent of sugar they produce as levy sugar to the government at a concessional rate. Further, it is mandatory for the sugar industry to pack its sugar only in jute bags.