A high-level committee headed by PMEAC chairman C Rangarajan today suggested a clutch of de-regulations to usher in more efficiency and stability in the sugar sector while protecting the interests of farmers, industry and consumers alike.

The panel today recommended withdrawal of government regulations on allocation of sugarcane to mills along with dismantling government restrictions on sugar mills over their freedom to sell their produce in the market.

“Levy sugar obligation and administrative control on non-levy sugar need to be dispensed with immediately. The regulations regarding cane area reservation and bonding may be dispensed with by states over the long run, and as states discontinue reservation area, the Centre should dispense with the minimum distance criterion,” the report released by Rangarajan said.

While one set of recommendations is aimed at ushering in innovations, investments and improvements in the efficiencies of sugar mills by way of competition among them, other recommendations will see government resorting to open market purchase of sugar through competitive bidding to meet its welfare obligations through ration shops.

In addition, the panel today recommended relaxation of regulations over the usage of by-products like molasses, bagasse, ethanol, power co-generation to help them enhance the viability of sector and reduce the cyclical nature of industry.

The panel has also suggested the measures be coupled with stable trade policy for the industry by doing away with switch-on, switch-off policy on exports and imports to ensure the industry benefits from the global market.

In an apparent attempt to ensure that farmers do not end up losing in de-control of the sector, the panel has suggested overhaul of the sugarcane pricing system by doing away with state advised prices and in-place assuring a “minimum” and “up-front” payment of fair and remunerative prices to farmers fixed by the Centre along with 70 per cent of revenue share of earnings from the sale of by-products.