Sugar Decontrol: Govt may okay only scraping levy quota, says Tulsian

An expert panel, headed by PMEAC chairman C Rangarajan, has suggested giving freedom to millers to sell sugar in the open market among other recommendations. It has also recommended scrapping state-declared cane prices. In an interview to CNBC-TV18 SP Tulsian of sptulsian.com shared his views on the same.

Below is the edited transcript of Tulsian's interview with CNBC-TV18.

Q: What exactly you made of the recommendations and which would be the most likely beneficiary of this?

A: From all measures suggested by the Rangarajan Committee, I don't think that except for scrapping of levy sugar, anybody will agree for other measures. Just to give an example, scrap the state advised prices - states are not going to agree for that. Also, transfers of the subsidy to the states, the states are not going to agree for that also.

Mr. Sawhaney said that there are two tier payment systems prevailing in Maharashtra. But he has not stated that Maharashtra is totally under the co-operatives. It is like drawing the money from your savings account in two installments. The suggestion of paying farmers based on FRP (Fair and Remunerative Price), which are virtually at a 60 percent of the state advised price, will not be agreed by the farmers.

Talking about that 70 percent of sharing, if I go by the present formula where the ethanol prices and bagasse prices are ruling at a very high price, the ratio which works out to the farmers is at about 65-66 percent. I don't think even mills will agree to share 70 percent on the entire product (including the by-product of bagasse and molasses) that will be seen as a negative by sugar mills.

Why farmers will be interested in giving the deferred payment facility to the mills? Sugar mills may temper, show some kind of expenses and it would become difficult to work out the profit and losses for all sugar mills on a uniform basis. I don't think except for scraping the levy quota of 10 percent, other measures are going to get accepted by some of the constituents.

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