Considering higher area of cultivation and likely bumper production
Agriculture and Food Minister Sharad Pawar on Thursday met Prime Minister Manmohan Singh to apprise him of the move to decontrol the sugar industry.
To look at the possibility of de-control, it was decided that Chairman of Prime Minister's Economic Advisory Council C. Rangarajan, Chief Economic Adviser Kaushik Basu and former Agriculture Secretary Nanda Kumar would suggest a formula for revenue sharing between farmers and industry when all controls go.
The meeting was attended among others by Food Secretary Alka Sirohi.
At present, the government controls the sugar industry by fixing fair and remunerative price payable to farmers for sugarcane, setting the quota of sugar that mills could sell in the open market as well as the levy sugar to be sold through ration shops each month. Mills have to give 20 per cent of their produce for levy at present.
With the area under sugarcane higher this season than last year and expectations of bumper production from next season starting October, the Ministry feels this is the right time to give in to the long-standing demand of the industry to decontrol it.
Millers have been suggesting that the government should meet its obligation for subsidised sugar for the poor by buying it from the open market.