C RANGARAJAN COMMITTEE REPORT ON SUGAR PDF

What’s the present system of Sugar pricing control in India? What’re the new provisions suggested by noted economist ajan? Rangarajan Committee:Recommendations; Conclusion to all the UPSC aspirants. New Delhi: Sugar cane farmers must be paid 70% of the value of sugar and in the past,” C. Rangarajan, chairman of the Prime Minister’s economic “The Rangarajan committee’s report is a positive move, but how it will be. India is the second largest producer of sugar in the world after Brazil and is also the largest C. RANGARAJAN COMMITTEE REPORT.

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Sugar industry is an important agro-based industry that impacts rural livelihood of about 50 million sugarcane farmers and around 5 lakh workers directly employed in sugar mills.

Employment is also generated in various ancillary activities relating to transport, trade servicing of machinery and supply of agriculture inputs. India is the second largest producer of sugar in the world after Brazil and is also the largest consumer. rangarsjan

There are installed sugar factories in the country as on The capacity is roughly distributed equally between private sector units and cooperative sector units. With the amendment of the Sugarcane Control Order, on The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices CACP in consultation with the State Governments and after taking feedback committew associations of sugar industry.

The amended provisions of the Sugarcane Control Order, provides for fixation of FRP of sugarcane having regard to the following factors: Under the FRP system, the farmers are not required to wait till the end of the season or for any announcement of the profits by sugar mills or the Government. The new system committed assures commithee on account of profit and risk to farmers, irrespective of the fact whether sugar mills generate profit or not and is not dependent on the performance of any individual sugar mill.

In order to ensure that higher sugar recoveries are adequately rewarded and considering variations amongst sugar mills, the FRP is linked to a basic recovery rate of sugar, with a premium payable to farmers for rangarajam recoveries of sugar from sugarcane. Accordingly, FRP for sugar season has been fixed at Rs.

The FRP of sugarcane payable by sugar factories for each sugar season from to is tabulated below: The year was a water-shed for the sugar industry. The Central Government considered the recommendations of the committee headed by Dr. Rangarajan on de-regulation of sugar sector and decided to discontinue the system of levy obligations on mills for sugar produced after September, and abolished the regulated release mechanism on open market sale of sugar.

The de-regulation of the sugar sector was undertaken to improve the financial health of sugar mills, enhance cash flows, reduce inventory costs and also result in timely payments of cane price to sugarcane farmers. The recommendations of the Committee relating to Cane Area Reservation, Minimum Distance Criteria and adoption of the Cane Price Formula have been left to State Governments for adoption and implementation, as considered appropriate by them. The gist of recommendations of the Committee and action taken by the Government thereon has been shown in Annexure-I to this Chapter.

The Government of India has reviewed the Sugar Subsidy Scheme and has decided that it is imperative to give access to consumption of sugar as a source of energy in diet, for the poorest of the poor section of the society i. Accordingly, the Central Government has decided that the existing system of sugar distribution through PDS may be continued as per the following: They will be provided 1 kg of sugar per family per month.

Ethanol is an agro-based product, mainly produced from a by-product of the sugar industry, namely molasses. In years of surplus production of sugarcane, when prices are depressed, the sugar industry is unable to make timely payment of cane price to farmers. The Ethanol Blending Programme EBP seeks to achieve blending of Ethanol with motor sprit with a view to reducing pollution, conserve foreign exchange and increase value addition in the sugar industry enabling them to clear cane price arrears of farmers.

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The procedure of procurement of ethanol under the EBP has been simplified to streamline the entire ethanol supply chain and remunerative ex-depot price of ethanol has been fixed. State-wise demand profile has also been projected, keeping in view distances, capacities and other sectoral demands. The results have been quite encouraging, with supplies doubling every year.

In the yearethanol supplied for blending was only 38 crore litres, whereas inunder the modified EBP supplies increased to 67 crore litres. In the ethanol seasonthe ethanol supply has been historically high and has reached crore litres achieving 4. In the ethanol seasonout of 80 cr litre contracted about Further, in the ethanol seasonLOI has been issued for supply of In addition second round of tender has been opened by OMCs for bidding for procurement of cr litre of ethanol under EBP.

The Government on 3. Interest burden on this loan, for five years is borne by the Government through Sugar Development Fund. An amount of Rs.

Explained: Rangarajan’s Sugar Pricing formula for Mill Owners

A scheme was notified on About 32 lakh farmers have been benefitted. The Government vide notification dated 2. Consequent upon sugar prices reaching substantially higher levels than required for operational viability of the sugar industry, the Central Government had withdrawn production subsidy scheme vide notification dated Since the production subsidy scheme was withdrawn before time, the Central Government has decided to disburse the performance based production subsidy for cane crushed during sugar season till the tenancy of the scheme vide notification dated Under the scheme, so far Rs.

With a view, to keep the sugar prices at reasonable level and to ensure smooth supply of sugar for consumers, the Central Government imposed stock holding and turn over limits on dealers of sugar vide Gazette notification dated The directions were issued that no dealer of sugar shall hold any stock for a period exceeding thirty days from the date of receipt by him of such stock and shall not keep sugar in stock at any time in excess of the quantities mentioned against each: Kolkata and extended area: Dealer who bring sugar from outside West Bengal: Further the period of stock holding and turnover limits on dealers of sugar has been extended from time to time up to However, keeping in view the improvement in production and availability of sugar in the sugar seasonthe stock holding limit and turnover limits has been withdrawn with effect from In order to remove regional imbalances in demand and supply and to ensure availability of sugar at reasonable price, duty free import of 5 lakh MT of raw sugar under Tariff Rate Quota TRQ was allowed through ports of different zones including 3 lakh MT from South Zone ports.

The scheme was operated by DGFT. In order to keep the prices stable at reasonable level thereby enabling the sugar mills to support FRP payment of farmers the stock holding limits has been imposed on sugar mills for the months of February and March vide order dated Keeping in view of production of sugar, stock position and market price sentiments, the Government of India has withdrawn the custom duty on export of sugar vide notification no.

Export Quotas of 20 Lakh tonnes of all grades of sugar; viz raw, plantation white as well as refined, have been prorated amongst sugar factories by taking into account their average production of sugar achieved by the sugar mills during last two operational sugar seasons and the current season up to February, Further, to evacuate some surplus sugar stocks over estimated domestic consumption through exports for keeping the market sentiments buoyant, Government has also devised Duty Free Import Authorization DFIA Scheme in respect of sugar vide DGFT’s notification dated Implementation of Recommendations of Dr.

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Over a period of repport, states should encourage development of such market-based long-term contractual sugqr, and phase out cane reservation area and bonding.

Rangarajan Committee and Partial Decontrol of Sugar

In the interim, the current system may continue. States have been requested to consider the recommendations for implementation as deemed fit.

So far, none of the States have taken action, current system continues. There is no reservation of area in Maharashtra. It is not in the interest of development of sugarcane farmers or the sugar sector, and may be dispensed with as and when a state does away with cane reservation area and bonding. Levy sugar may be dispensed with. The states which want to provide sugar under PDS may henceforth procure it from the market directly according to their requirement and may also fix the issue price.

However, since currently there is an implicit cross-subsidy on account of the levy, some level of Central support to help states meet the cost to be incurred on this account may be provided for a transitory period. Central Government has abolished levy on sugar rangrajan after 1st October, This mechanism is not serving any useful purpose, and may be dispensed with. As per the committee, trade policies on sugar should be stable.

Appropriate tariff instruments like a moderate export duty not exceeding 5 per cent ordinarily, as opposed to quantitative restrictions, should be used to meet domestic requirements of sugar in an economically efficient manner.

Import and rangarwjan of sugar is free without quantitative restrictions, but subject to prevailing rate of custom duty. There should be no quantitative or movement restrictions on by products like molasses and ethanol.

Pay 70% of sugar value to cane farmers: panel

The prices of the by-products should be market-determined with no earmarked end-use allocations. There should be no regulatory hurdles preventing sugar mills from selling their surplus power to any consumer. Restriction on movement of ethanol and levying of taxes and duties on it by State Governments continue to be an impediment in successful implementation of EBP.

Other than that i. The compulsory packaging of sugar in sugsr bags has been relaxed further. This page uses Javascript. Your browser either doesn’t support Javascript or you have it turned off.

To see this page as it is meant to appear please use a Javascript enabled browser. GENERAL Sugar industry is an important agro-based industry that impacts rural livelihood of about 50 million sugarcane farmers and around 5 lakh workers directly employed in sugar mills.

Rangarajan Committee Issues Gist of Recommendations Status Cane Area Reservation Over a period of time, states should encourage development of such market-based long-term contractual arrangements, and phase out cane reservation area and rahgarajan. There is no reservation of area in Maharashtra Minimum Distance Cmomittee It is not in the interest of development of sugarcane farmers or the sugar sector, and may be dispensed with as and when a state does away with cane reservation area and bonding.

Levy Sugar Levy sugar may be dispensed with. Regulated Release Mechanism This mechanism is not serving any useful purpose, and may be dispensed with. Release mechanism has been dispensed with. Trade Policy As per the committee, trade policies on sugar should be stable. By-products There should be no quantitative or movement restrictions on by products like molasses and ethanol. Compulsory Jute Packing May be dispensed with.

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