Not against lifting levy on sugar, but can't act in haste: KV Thomas

Besieged with demands for decontrol, Consumer Affairs, Food and Public Distribution Minister Prof KV Thomas shares his thoughts on the sugar sector with Business Today. Excerpts.

Sugar mills are sitting on surplus stocks.  
It is too early to say that. The estimated availability this year would be 29 million tonnes and release would be 21 million tonnes, excluding 2.6 lakh tonnes of exports. So, the stock to remain would be 5.46 million tonnes.

We would need about 5 million tonnes for the coming festival season. That will leave us with about 5 lakh tonnes. By October, we will know the total sugar produced and how the season is beginning. We will, then, take a call on exports.

Would that not be late considering the firm international prices now?
In our own assessment, international sugar prices will remain at higher levels until February. We don't want to act in haste now.  

The industry is critical of your monthly release mechanism.
The monthly quota is done for two reasons: To control retail prices of sugar, and to help farmers get remunerative price. We have no second thoughts about this mechanism.

Since bulk of sugar is consumed by industries, would ending this mechanism affect small consumers?
Certain items create problems, like, for instance, onion and potato. Though we are a large sugar producing nation, we are also the largest consumer. If sugar prices go up, there will be a ruckus.

But is not the levy obligation hurting mills' profitability?
The mills are, of course, making money. We have to distribute sugar under the PDS system. We must have a system of some quantity of levy. We had started with 60 per cent and have come down to 10 per cent.  I am not against lifting levy sugar mechanism, but we need to strengthen our PDS system. And, levy is the only mechanism available with us. I cannot abolish it without going deeper into it.

In today's age, can the government dictate the industry what bags they must use for packaging?
It was decided on certain norms. Not only sugar even for wheat and rice there are some quality restrictions (on the quality of jute to be used).

What are your initiatives for the sector?
We must improve the entire cane sugar cultivation. We don't have proper mechanization, and our sugar content too is low compared to Brazil. Crushing industry has to modernise. I am in touch with Sharad Pawar to see how to use the Sugar Fund for this.