Impact of Policy of Government on Import and Export of Sugar from India

Abstract

Sugar is one of the most produced and traded commodities of the world, which has a unique position as one of the most Government regulated commodities in domestic market, but with over 30 percent of world production moving in International trade. Over 110 countries are listed as sugar beet and cane producers. Nearly 60 countries are listed as net exporters. India is the second largest Sugar producing country only after Brazil and is also one among the major sugar exporting countries. India is the world's largest consumer of Sugar at 23.0 million metric tons (MMT) raw value in the 2008-09 marketing year. Human consumption of Sugar in India is up 35 percent from 10 years ago and double the consumption of 20 years ago. In fact in recent years, India has turned out to be a net importer of Sugar, since its domestic production has not been keeping pace with its increasing domestic consumption. Under the structured industrial development policy, Sugar industry was part of the five year plans introduced in 1951 and has been under the direct control of the Government ever since. Sugar industry is highly politicized and closely controlled by the Government. The Government control covers all aspects of Sugar business, i.e. licensing, capacity, cane area, procurement, cane pricing, sugar pricing, sugar distribution, imports and exports. The Government control varies from full control to partial and hill decontrol which depends upon the local demand. Due to highly politicized and fluctuating policies of the Government, Sugar imports and Exports also vary to a great extent from time to time. This is creating immense problems to the Sugar industries in formulating marketing strategies which in turn have much impact on performance of Sugar industries which ultimately affects the large cane growing farming community of the country. The present paper discusses the Government policies and their impacts on Sugar import and Export from India. The paper also throws light on the problems faced by the Sugar Industries and Farming community. The necessary steps to be taken for overcoming these problems are also hinted in the paper.