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SUGAR

Cabinet approves extension of validity of sugar Central Order to Oct 28
Friday, 21 April, 2017, 08 : 00 AM [IST]
Our Bureau, New Delhi
The Cabinet, chaired by prime minister Narendra Modi, has given its approval for extending the validity of the existing Central Order, dated October 27, 2016, in respect of sugar by six months (from April 29, 2017 to October 28, 2017).

The main objective of the decision is to enable the state governments to issue control order with the prior concurrence of the Central Government, for fixing stock limits/licensing requirements in respect of sugar, whenever the need is felt by them.

This is expected to help in the efforts being taken to improve the availability of these commodities to the general public at reasonable rates, and control the tendencies of hoarding and profiteering.

The current decision will be notified by the government and communicated to all the states and Union Territories (UTs) for further action at their end.

Background
The Cabinet, in its meeting held on October 27, 2016, decided to enable the states to regulate the supply, distribution, sale, production, stock, storage, purchase, movement, etc., in respect of sugar for a period of six months.

Accordingly, S O 3341(E) dated October 27, 2016 was issued, to enable the administrative departments, states and UTs to decide stock limits, etc. on sugar upto April 28, 2017, by amending the Removal of Licensing Requirements, Stock limits and Movement restrictions on Specified Foodstuffs Order, 2016 dated September 29, 2016, notified as G S R 929(E).

The prices of sugar are being monitored by the Department of Food and Public Distribution regularly at the factory gate as well as in the domestic market. In September 2016, it was noticed that the retail prices had shown a sudden spurt. The price rise appeared to be more on sentiment than actual shortage. In order to regulate supply of sugar and address issue of speculative prices, fixing of appropriate stock limit on need basis was essential. In addition, despite the adequate availability of stocks for consumption in the current season, hoarding and consequent profiteering is anticipated due to drop in production over the previous year, and hence, a further extension of the stock limit would be needed.

To support the sugar sector, the government had recently extended soft loan assistance of Rs 4,305 crore to the industry, which has been directly credited to farmers’ accounts on behalf of sugar mills through banks, benefiting about 32 lakh farmers. Also a performance-based production subsidy has been extended at Rs 4.50 per quintal of cane crushed, which was directly credited to the farmers’ accounts on behalf of sugar mills.

In order to maintain domestic prices at reasonable levels, the government has allowed the import of a restricted quantity of five lakh metric ton of raw sugar at zero duty by millers/refiners having their own refining capacities. This restricted quantity will help the sugar industry to augment their liquidity and enable them to pay cane dues of farmers.
 
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