There has been a long pending demand for the complete decontrol of sugar industry. But successive central governments have hesitated to decontrol sugar. Discuss the issue and government policy stance on the same.

Published: October 27, 2015

Hint Answer: Currently, there is a partial decontrol of sugar with abolition of levy sugar system;  dismantling of monthly release mechanism. However, full decontrol of the sugar has not been possible this issue has political ramifications and can put the governments in immediate danger of collapse.
The output of sugarcane is uncertain akin to many other farm commodities. But since large number of farmers are employed in sugarcane farming and sugar is also an essential commodity; government has to handle both demand and supply side issues for sugarcane. In case of a bumper crop, there is a need to prevent price collapse, thus there is FRP system in place. If there is short supply of sugarcane, the price hike in sugar would drive food price inflation, thus there is a system of sugar control.

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