MUMBAI – Veteran politician Sharad Pawar has mooted dual pricing of sugar for household and industrial consumers in India.
In an event organised at Pune by regional daily Loksatta to discuss challenges for the sugar industry, Pawar, leader of Nationalist Congress Party, said increased mechanisation in sugarcane cultivation is necessary to become competitive in the market.
"Pawar has promised to pursue the issue (of dual pricing) with the Centre, which will partially help the industry to come out of a financial mess," a top official of a sugar cooperative in western Maharashtra told Cogencis on the phone.
Dual pricing of sugar was often discussed in the past but could not be implemented. In a recent industry event, Vijay Paul Sharma, chairman of the Commission for Agricultural Costs and Prices, also batted for dual pricing for industrial buyers and household consumers.
In the past couple of years, India's annual sugar consumption has been almost stagnant at 25.5-26.0 mln tn. However, surplus production often leads to financial woes for the industry, which indirectly leads to mounting dues of sugarcane payment. If government fixes the minimum selling price, like the one currently being practised, it doesn't give much respite to the industry.
Since industrial consumers, such as ice-cream makers, cold-drink manufacturers and the food processing sector, account for about 65% of the total consumption, higher prices for them can improve the financial condition of the sugar industry without hurting household consumers.
Nationalist Congress Party being the strongest political party in the Shiv Sena-led coalition government in Maharashtra, Pawar is expected to take steps to revive the ailing sugar industry. Most prominent sugar mills, present at the event today, supported Pawar's proposal of dual pricing for the sweetener, participants at the event said.
Pawar has also demanded that subsidy on cane harvesting machines be restarted with immediate effect, said another industry official, adding that Maharashtra may soon moot the proposal in the state Cabinet.
A couple of years ago, the state offered 50% subsidy on cane harvesters that cost about 10 mln rupees. However, the subsidy was stopped later.