Sugar Exports Decanalised

The government yesterday announced the decanalisation of sugar exports through an ordinance repealing the Sugar Export Promotion Act, 1958.

An official note said that President Shankar Dayal Sharma gave his assent to the ordinance on January 17, ending the monopoly of the two canalising agencies - the State Trading Corporation (STC) and the Indian Sugar and General Industry Import Export Corporation (ISGIEC) - immediately.

Individual sugar exporters would now have to register their requirement for export quota with the Agricultural and Processed Food Products Export Development Authority (APEDA). Export quotas already released to STC and the ISGIEC would have to be implemented within three months. Otherwise, these quotas would lapse, the note said.

The ordinance was necessitated owing to the governments failure to get the Sugar Export Promotion (repeal) Bill, 1996 passed in Parliament during the last session. While the Lok Sabha approved the Bill without much discussion, the Rajya Sabha blocked its passage.

Prime Minister H D Deve Gowda later announced that the government would bring an ordinance to change the present law under which sugar exports were canalised through the ISGIEC, a collective body of the sugar industry.

Promulgation of the ordinance, however, took time as the matter had to be referred for legal opinion. There were also problems with the initial draft of the ordinance which necessitated changes.

Under the Sugar Export Prom-otion Act, 1958, every sugar manufacturer had to accept part of the quantity allocated for export by the government regardless of their export capability. The law, however, also allowed export quantity allocated to a factory to be exchanged with another unit.

While moving the Bill, the government said that since the country was now in a position to export large quantities of sugar, individual units needed to be encouraged to develop capability to produce export quality sugar at internationally competitive prices. For this the existing law had to be repealed, Parliament was told.

But, despite the decanalising, the government would still be able to regulate the quantity of export by using provisions of the Essential Commodities Act. Within the overall prescribed export ceiling, promotion for individual exports would be governed under the APEDA Act of 1986.

A fresh Bill would be introduced in Parliament in the forthcoming Budget session.