Sugar decontrol decision only after consulting states

Food and Agriculture Minister Sharad Pawar today said the government will not take any decision on decontrol of the sugar sector without consulting the states and the process of which will begin in 8-10 days.

"I am going to start the process of discussion with the stakeholders and the state governments in 8-10 days time. Without the consultation, I will not move any proposal (on decontrol) to the Cabinet," he told reporters on the sidelines of the annual meeting of the National Federation of Cooperative Sugar Factories.

The government now controls the sugar industry by fixing the quantity of the sweetener that the mills would sell in the open market as well as through ration shops each month.

The minister, however, expressed apprehension whether sugar cooperatives would be able to compete in the decontrolled scenario.

"I have no fear about private sugar mills. My biggest worry is the performance of the cooperatives in the fully decontrolled regime," he noted.

The talks on freeing the sugar industry from the control of the government are gaining ground as the country is likely to see a bumper production in the 2010-11 season starting next month.

Pawar had also apprised Prime Minister Manmohan Singh about the proposed move earlier this month.

Last month, Pawar had said his ministry is preparing a proposal for decontrolling the sector, which would be sent to various ministries for their views before taking it to the Cabinet.

He, however, had made it clear that the government would continue to fix the Fair and Remunerative Price (FRP) of sugarcane to protect the farmers interest. FRP is the minimum price that mills have to pay to procure cane.