Union Agriculture Minister Sharad Pawar on Thursday assured the Lok Sabha that the “abnormally” high prices of sugar would ease in the next two years with an increase in the availability of sugarcane.
Replying to a debate on the Essential Commodities (Amendment and Validation) Bill, which seeks to replace the controversial Ordinance on sugarcane pricing promulgated in October, Mr. Pawar said the prices of sugar had been rising in the wholesale and retail markets because of a gap in the demand and supply.
The Ordinance had triggered a massive protest by sugarcane farmers — who marched to Delhi last month — forcing the government to replace it with an amendment Bill. The Bill seeks to replace the Statutory Minimum Price (SMP) for sugarcane with Fair and Remunerative Price (FRP).
Pointing out that sugarcane was an industry with a cycle of five years — of which there is surplus in three years and shortage in the other two — Mr. Pawar said that in the last two years, there had been a shortage and the situation was expected to improve in the coming year.
Allaying fears of members that the FRP would hurt the interests of farmers, Mr. Pawar said FRP would be determined by the Commission for Agriculture Costs and Prices (CACP) on the basis of seven parameters, including cost of production, recovery rate and profits of sugar mills.
The Minister assured the House that the FRP would protect the interests of sugarcane growers in a better way than the SMP provided as minimum price to farmers under the existing system.
Explaining the reason behind allowing the import of raw sugar, Mr. Pawar said that it was done to bridge the demand-supply gap. As against the normal demand of 230 lakh tonnes, the production was less than 150 lakh tonnes. “It is the duty of an elected government to balance the interests of consumers and producers. Since consumers form 80 per cent, their demand could only be met by importing.”
To protect the interests of consumers, he said, the UPA government had increased the quota of levy sugar from 10 per cent to 20 per cent to ensure that more sugar was available under the public distribution system.
Earlier, participating in the debate, the Opposition members accused the government of siding with sugar mill owners on the cane pricing issue. They urged the government to protect the interests of growers.