Click to play videoNew Delhi: As the agricultural crisis worsens, the country is facing a huge shortfall of sugar.
On Wednesday, Sharad Pawar fuelled fears of scarcity and shortage, saying that the forecast for the next season is not bright .
Analysts say these sentiments are driving up sugar prices internationally and are leading to hoarding in India.
Last year's sugar production was at 263 lakh tonnes and it should have ensured that there is no scarcity now.
So why have bumper harvests not been used to build buffer stocks?
Pawar has always said that sugar production is a cycle, which means that there are highs and lows and that it can be predicted.
So then why was he not able to foresee the crisis and prepare for it well in advance?
Pawar has announced a series of measures in a bid to tame sugar prices - duty-free import of raw sugar until March 2010, duty free import of white or refined sugar up to 1 million tonnes until November 2009 and no sales tax or VAT on imported sugar.
“Knowing that sugar production is a cycle, the government should have built up a buffer stock, but it did exactly the opposite. Now when you have created a supply-side crisis, you are encouraging imports and ensuring imports by giving large concessions to the same people who are now hoarding and making a killing,” said Left leader Brinda Karat.
But while he loses no opportunity to advise the states regarding hoarding, he did not raise the issue in his meeting with the Indian Sugar Mills association.
The statutory minimum prices fixed by the centre for sugarcane increased by just Rs 2 from Rs 79 in 2005 to 81 in 2009. But higher prices by state governments was contested by the industry.
Farmers' arrears alone run into thousands of crore, forcing them to shift to other crops. With a little help from the drought cane production will fall further. the scene is set for a takeover by the hoarders.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter, Google+ and Pinterest)
More on IBNLive Right Now
MOST SHARED
PHOTOGALLERY
