Sugar most controlled sector: Pawar

BS reports

Pawar said sugar was the most controlled sector. There were curbs on the sale of sugar in domestic as well as export markets. Besides, there were levy obligations and restrictions on setting up new sugar factories in the 15 km radius of old mills. Our sugar policies needed to change in tune with the changing world economy.

One of the members of the consultative committee suggested that the government should have a long-term sugar policy instead of taking short-term and ad hoc policy decisions. He also advised against banning forward trading in sugar though the flaws in this mode of marketing needed to be removed.

Responding to these remarks, the minister indicated that he could convene a meeting of the Members of Parliament to remove their misgivings concerning futures trading.

Yes much misgivings exist. In another piece Ajaj Shah writes

The political class is in a tizzy about commodity futures trading. Much of this fear is an archaic mistrust of markets, and the losses that incumbents suffer when competition and transparency come about. These fears do not hold up to careful scrutiny. The sensible strategy is to address the genuine difficulties of market design, regulation and supervision, so that futures trading is able to play its full role in a mature market economy. This requires breaking with policy decisions made in the 1950s.

More on controls in sugar sector from Businessline. Sharad Joshi writes

Even as there is call for the government to exit businesses, it remains interested in many, often for reasons political. The most regulated sector in agriculture is `sugar'. From licensing of mills to the specifications of gunny bags to be used for packaging, every thing is dictated by the Sugarcane Control Order, 1966. The government's 1998 decision to de-licence the sugar industry is pending before the Supreme Court. A number of matters relating to levy sugar, the Statutory Minimum Price (SMP) and the State Advised Price (SAP) are pending before various courts. Now, sugar mills have also been co-opted for co-generation as also ethanol production. And, under the new United Nations' norms for co-generation, the industry is also to take up Clean Development Mechanism (CDM) projects.

In this context, every aspect of the sugar policy needs to be reviewed.