Diffcult to decontrol sugar ind as many states not ready

New Delhi: Agriculture Minister Sharad Pawar on Friday said it will be difficult to decontrol sugar industry as many state governments, including the country`s second largest producer Uttar Pradesh, are against freeing this sector.

"We have discussed (the issue of sugar decontrol) with states. Unfortunately, many states are not ready," Pawar said in his first media interaction after he was relieved from the Consumer Affairs, Food and Public Distribution ministry that oversees sugar sector.

Prime Minister Manmohan Singh in September 2010 had asked the Food Ministry to consult states before decontrolling the sugar sector. The ministry had then proposed doing away with controls like monthly sugar quota that mills can sell in the open market and through ration shops.

"States like Uttar Pradesh, Punjab and Karnataka are not ready for decontrol of the sugar industry, while Gujarat and Maharashtra have expressed their willingness.

"If only three-four states accept, it is difficult to implement. And Prime Minister had always told that for this kind of policy, states should be taken into the confidence," he pointed out.

When asked if the government will put the proposal of decontrolling the sector on the backburner, Pawar said, "You can`t say for now. If there is more production and prices come down, they (states) may rethink and accept (it) also".

In August 2010, Pawar had said that the time had come to decontrol the sector, as sugar production in 2010-11 season was expected to be higher than the annual domestic demand and prices had softened from nearly Rs 50 a kg in January 2010.

At present, the sugar industry is under government control, right from the level of production to distribution.

Besides, a fixed monthly sales quota for sugar mills, the factories are required to sell 10 per cent of their output to the government at cheaper rates for supply to consumers via ration shops.

However, the ministry has held that it would continue to fix the fair and remunerative price (FRP) of sugarcane, which is the minimum rate that mills are required to pay to farmers.

Sugar production of India, the world`s second largest producer and biggest consumer, is estimated to rise to 24.5 million tonnes in 2010-11 (October-September) from 19 million tonnes in the previous year.

The domestic demand is pegged at 23 million tonnes, out of which about 60 per cent is used by bulk consumers such as sweetmakers and soft-drink manufacturers.