Pawar in line of fire over sugar decontrol talks

PUNE: The combined effect of the current sugar crisis and the talk about the commodity being decontrolled might spell trouble for Union agriculture minister Sharad Power as it has provided enough ammunition to his rivals in the Congress. In fact, a section of the partymen has gone on the warpath looking to exploit the current crisis in the sugar industry — falling sugar prices affecting mills and farmers, and its deregulation proposal — to bay for Mr Pawar’s scalp.

“Any move to decontrol the sugar industry at its current stage would be disastrous. It would destroy the cane-growing farmer, a sector with the largest number of people who depend on it for their daily livelihood,” said Kanhaiyalal Gidwani, president, coordination committee of consumer affairs of the Maharashtra Pradesh Congress Committee (MPCC), in Pune.

Referring to a letter despatched to the Prime Minister, and Congress president Sonia Gandhi in this regard, Mr Gidwani said Mr Pawar should take moral responsibility for his “failure” and resign from his ministerial post. Pointing to the “ill-effects” of de-controlling sugar, Mr Gidwani said it would lead to the creation of artificial shortages by industry or hoarders.

“All that traders and hoarders have to do is to not release or sell the sugar for a minimum of 10 days. This is enough to create a shortage, and such situations have been created in the past. Hoarders fix a selling price and do not release sugar at prices below the set price, creating thereby an artificial shortage and an increase in the price,” Mr Gidwani said.

He warned that the minimum increase in the price of sugar would then be Rs 5 per kg. “With the proposed decontrol mechanism, releasing sugar will become redundant and the government will have no control over the demand-supply-based release system.

The Sugar Control Act, 1955, will also get redundant, leaving no scope for legal action under the Essential Commodities Act. Moreover, cooperative sugar mills with no holding capacity will have to resort to distress selling,” he added.

Suggesting the creation of an additional buffer stock of 50 lakh tonnes — to be bought at a minimum price of not less than Rs 15 per kg — Mr Gidwani said a 20% price differential should be maintained between levy and open market prices. He urged the central government to consider all aspects before it moves in to decontrol the sector.