People's Democracy

AIKS Flays Sugar Decontrol

THROUGH a press statement issued from New Delhi on April 5, the All India Kisan Sabha (AIKS) strongly condemned the Congress-led UPA government’s decision to partially decontrol the sugar industry by scrapping the levy sugar obligation and regulated release mechanism. The AIKS said this decision will only promote the interests of the profit seeking corporate sugar mills at the expense of the farmers, consumers and the cooperative sector. Clearly the government has stood by the Rs 80,000 crore sugar lobby and removed controls to facilitate unbridled profiteering.

Saying that it rejects the decision to remove the levy sugar obligation and do away with all administrative control on non-levy sugar, the AIKS pointed out that until now the mills were required to mandatorily sell 10 per cent of their production to the government at below market price for distribution to the poor through the public distribution system (PDS). But now the states will have to procure from the open market through competitive bidding for the PDS. Levy sugar was being procured at Rs 19.50 per kg and was being sold to the BPL card holders at Rs 13.50 per kg. Now, the AIKS said, the sugar lobby will get an additional Rs 12.50 per kg on the sugar procured for the PDS, provided the prices are retained at the current rate. Annually the sugar companies at the present rate will see an increased profit of thousands of crores.

While the government claims that the difference between the current market price of Rs 32 per kg and the PDS issue price of Rs 13.50 per kg will be borne by the centre, the AIKS said the states will have to bear the extra burden if the open market prices rise beyond this. Already, within 24 hours of the decision, an increase of over Rs 50 per quintal in the open market was seen. It would have a cascading effect on the prices of sugar for the PDS beneficiaries and the states will end up coughing out huge resources for buying sugar from the open market. Decontrol will also lead to skyrocketing of prices of sugar in the open market as the profiteering sugar companies are bound to seek a maximisation of profits. This is an anti-poor move against the very fundamental basis of the PDS.

Instead of regulated release mechanism which allowed the sugar mills to release only a specified quantity within a fixed timeframe, the corporate sugar mills will have a free hand. They can create artificial scarcities and play havoc with availability to jack prices. Dumping may also result, which can adversely impact the prices of sugarcane and put farmers in further distress. The pricing of sugarcane has been left solely for the state governments and nothing has been clarified on the state advised price (SAP).

The earlier experience of decontrol of petroleum and diesel, seed industry, fertiliser industry and pesticide industry clearly indicates that the move will only lead to increased prices for the consumers and unending profits for the companies. 

The AIKS has calls upon its state units to rise up in protest against this move and resist this retrograde move tooth and nail. The organization has demanded that the government must withdraw the decision and evolve a comprehensive sugarcane policy through consultation with the cane growers and peasant organisations.