Sugar co-ops seek policy stability, decontrol
Cooperative sugar factories have made a fresh appeal to the central government to decontrol sugar but with a rider — that it should not be for the short term.
The mills, under the National Federation of Cooperative Sugar Factories, have said sugar decontrol should stay for a specific period, say 10 years, and the government should not alter the policy every now and then. Also, the state advisory price and the fair and remunerative price should vary from region to region, it said.
Besides, the government should increase the minimum distance between two sugar mills from 15 km to 40 km as this would help existing mills expand and get more cane, it said.
The federation, at its board meeting today at Vapi, also said India should try to become a consistent exporter of sugar.
Shankarro Kolhe, a senior director, told Business Standard: “After decontrol, telecom, steel and cement sectors have shown exponential growth. Sugar reforms will attract large investments and result in vibrant growth, benefiting cane farmers, consumers and processors. However, the government should not frequently change policies on decontrol.”
He said the government should meet the requirement of the public distribution system (PDS) by procuring from the open market. “The procurement for PDS should not be through the levy obligation, inflicting costs on the industry,” he said. There was unanimity on these points among the directors, he said.
Vijaysinh Mohite-Patil, chairman of the Federation of Cooperative Sugar Factories in Maharashtra and a director of the National Federation, shared Kolhe’s views. He said decontrol should stay even when there was a production shortage.
On cane area reservation and the distance between factories, Kolhe said the board was unanimous on increasing it to 40 km. However, in states where the density of the crop is poor, a longer distance should prevail. The principle should be adequate cane availability for viable functioning and growth of sugar mills, he said. “A long-term reservation will ensure a stronger partnership between millers and farmers. This will improve yields and productivity,” he added.
A federation director, who did not want to be named, said the directors made a strong argument in favour of a long-term export policy. The duty structure should be calibrated to ensure payment of competitive prices to farmers vis-à-vis other crops so that the country was self-sufficient in sugar, he said.