Food Min plans to implement part of Rangarajan panel report

Food minister meets PM, Pawar, to discuss panel's report

The food ministry is hopeful that at least two major recommendations of the C Rangarajan panel on sugar decontrol relating to abolition of levy sugar and release order mechanism for mills would be implemented in the next two months.

"We don't want the recommendations to meet the same fate as the other reports on sugar sector decontrol and hence have started internal discussions to expedite the implementation of some part of the report," a senior food ministry official said.

Food Minister KV Thomas today met Prime Minister Manmohan Singh and Agriculture Minister Sharad Pawar to discuss how the recommendations could be implemented at the earliest. The department of food and consumers affairs has received the recommendations from the Prime Minister's Office (PMO).

"There are almost 7-8 recommendations and all of them cannot be implemented in one go because may of them involve discussion with state governments like revenue-sharing arrangement between mills and farmers for Fair and Remunerative Price (FRP)and distance criteria between mills, but some of the suggestions can be done right away and abolishing levy sugar mechanism and release order is among them," the official.

Under the levy sugar mechanism, all sugar mills across the country is required to sell a certain percentage of annual production to the government at cheap rates. The government in turn distributes this sugar through the Public Distribution System (PDS). Under release order mechanism, the government determines the extent of sugar that each mills can sell in the open market.

"We have called a meeting of Sugar Directorates and Commissioners in January to discuss the proposals of the Rangarajan Committee and would like to discuss the proposals with the state governments as well," Food Minister K.V. Thomas said.

In its other recommendations, the High-Level Panel under chairmanship of Prime Minister's Economic Advisory Council Chairman P Rangarajan suggested a revenue-sharing model for determining sugarcane price along with dispensing with the levy sugar and distance criteria for sugar mills.

The Committee also said that states which want to provide sugar under PDS may henceforth procure the same from the open market through a competitive bidding process according to their requirement and also fix the price at which they want to sell this sugar through ration shops.

"The additional subsidy on account of this implicit cross-subsidy should then be provided by the Central government over and above the already existing subsidy along with rationalizing the price of sugar which is distributed through the ration shops," the report said.

"The central government will continue to distribute the around Rs 3,000 crore annual subsidy incurred in selling sugar through the ration shops, but it will go to the states, which will also enable them to bring down the procurement cost of states," Rangarajan had said.