The South Indian Sugar Mills Association – Tamil Nadu has appealed to the Union Government to free the sugar industry from excessive State control.
According to a press release from the sugar industry association, the Centre should emulate its stand on petroleum prices, where it has allowed market forces to play, and apply similar ‘logic and economic' rationale to the sugar sector.
It is high time the Government decides on early decontrol of this core sector.
PM statement
Taking note of the recent statement by the Prime Minister, Dr Manmohan Singh, who has said that petroleum prices will be left to be determined by market forces and there would only be more deregulation of the sector, the SISMA-TN said the salutary stand of the Government obviously stemmed from gross under recoveries by petroleum companies.
But the sugar industry, even if not on the scale of petroleum companies, finds it ‘odd and hard to understand the differential and discriminatory stand being taken by the Government when it comes to sugar'.
Interference
The Government not only corners 10 per cent of the industry's production as levy to supply over the public distribution system but also controls the balance 90 per cent in the form of monthly releases and depresses the market prices.
It also interferes with sugar exports, denies the industry the opportunity to tap the international markets even when domestic prices rule below cost of production and global prices are higher.
After supporting the population below the poverty line through the public distribution system, there is no reason to interfere in the market to depress the price of sugar consumed by the industrial and commercial segment.
This only affects the ability of the mills to pay the sugarcane farmer.