The Hindu Business Line : `Ad hoc policies hurting sugar industry'

IN view of the plethora of problems plaguing the sugar industry, it is imperative to set up a national sugar commission to formulate and implement cohesive policies, opines Dr N.A. Ramaiah, the former director of the National Sugar Institute, Kanpur, and also of the Deccan Sugar Institute, Pune.

Dr Ramaiah, who also served as the secretary to the Bhargava Commission appointed by the Centre in 1974, will be given the lifetime achievement award at the three-day national convention of the Sugar Technologists' Association of India, in Hyderabad on August 13. The Union Agriculture Minister, Mr Sharad Pawar, will present the award.

In an interview on the occasion, Dr Ramaiah, residing in Visakhapatnam, said ad hoc policies adopted by the Union Government and different States had caused incalculable damage to the industry. "The policies of control and decontrol of the industry are based on expediency. They are not clear-cut and well thought-out. To meet a certain situation, the Government resorts to a knee-jerk response," he commented.

Citing an example, he said that during the current year the Government was encouraging imports by eliminating the import duty, apprehending a shortage. "The production in 2005-2006 is expected to be around 130-140 lakh tonnes and we have carry-over stocks of 80 lakh tonnes. The estimated consumption is only 180 lakh tonnes. Where is the need for imports."

"There are huge fluctuations in sugar production in the country. Two years of excess production is followed by one year of decline. In 2001-2002 the production was 185 lakh tonnes. In 2002-2003 it was 200 lakh tonnes and then it slumped to 135 lakh tonnes in 2003-2004. Now there appears to be a shortage and the Government is pushing the panic button and importing sugar," he said.

The dual-pricing policy, the mounting arrears to farmers and several other factors were resulting in acute shortage of raw material for many of the factories in the country, especially those in the co-operative sector, and they were turning sick, he said. "The farmer cannot be blamed. He is switching over to other crops, as he is unable to get the arrears. In most cases, the factories too cannot be blamed as they are not getting back even the conversion charges," he said.

On the proposed national sugar commission, he said it should be headed by a Supreme Court judge and the members should be eminent personalities from the fields of finance, marketing, sugarcane development and economics. There should be some representatives of people too. It should be set up under an Act of Parlaiment and enjoy autonomy.

It should fix the price on the basis of the recovery rate and also taking into account the recommendations of the Central Agricultural Prices Commision. Efforts should be made to reduce the difference between peak recovery and the average recovery in a season.

The cane price should be paid to the farmer on the spot to prevent diversion of cane from a factory zone. "If the farmer is assured of a reasonable price, he will not switch over to other crops. There should be a passbook system and the farmer should be paid through a bank," he said.

The factory should be paid the actual conversion charges and a fixed return on the capital invested. It should be paid incentives for better production and better by-product utilisation.

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