Pitching for decontrol of the sugar sector, Minister of State for Agriculture Tariq Anwar today said the government will take "appropriate" decision on the issue.
The sugar industry is the only sector which is controlled by the government right from the production through marketing of sugarcane and sugar.
"The problems facing sugar sector have been examined by a number of committees from time to time. The recommendations of the Rangarjan Committee report shall be examined and appropriate decisions to be taken on how best to promote this sector," Anwar said while addressing the conference of the World Association of Beet and Cane Growers (WABCG) here.
The right policies to boost the sugar industry are necessary as it contributes around 7 per cent to the total agriculture GDP and around 30 million people are directly or indirectly depend on this sector, he said.
Barring two key regulations with respect to fixing sugarcane price and sharing of 70 per cent revenue by sugar firms with farmers, the Rangarajan Committee report has suggested giving freedom to mills to sell sugar in the open market and having a stable export and import policy.
The Food Ministry has moved a cabinet note based on the Rangarajan's report. The proposal is likely to be discussed at the meeting of the Cabinet Committee on Economic Affairs (CCEA) next week.
Stating that removal of government controls would improve efficiency in the sector, Anwar said abolition of licensing requirement for new sugar mills way back in 1998 contributed significantly to a structural transformation in the industry.
"Delicensing caused installed capacity in sugar sector to grow at almost 7 per cent annually between 1990-91 and 1997-98. Till 1997-98, sugar cooperatives dominated but by 2011-12, this changed significantly with private sector contributing largest share of total installed capacity," he said.
India, the world's second biggest sugar producer, is expected to produce 24.5 million tonnes of the sweetener in 2012-13 marketing year (October-September).
Emphasising the need to focus on sustainable sugar production in India, government advisory body CACP Chairman Ashok Gulati cautioned that depleting water and threat of climate change would pose challenges for sugarcane cultivation.
"India is increasingly short of water. Water is going to be a constraint as sugarcane is water guzzler. Climate change is going to make it worse. Intensity of floods and droughts would increase," Gulati said.
Maharashtra and Karnataka are likely to face more droughts due to climate change and may have to shift to better water management practices like drip irrigation, he said.
In Maharashtra, the country's largest sugar producing state, less than 5 per cent cane area consumes more than 50 per cent of irrigated water of the state. "Cane requires 25 irrigation vis-a-vis seven in Uttar Pradesh."
The Commission for Agriculture Costs and Prices (CACP) chief further said that despite higher land productivity and sugar recovery rate in the state, water productivity remained much lower vis-a-vis Uttar Pradesh.
Also, the cost of water in Maharashtra and Karnataka is three times higher than Uttar Pradesh, he added.
To ensure sustainable sugar production, Gulati suggested scaling up of sugarcane cultivation in Bihar and Eastern Uttar Pradesh as they are endowed with water resources.