About 20 months ago, after witnessing the gut wrenching scenes of farmer Attar Singh burning down his sugarcane crop, The Sunday Indian had done a cover story on the looming crisis with a simple headline: Who is he (Sharad Pawar)
batting for? In those days, Pawar appeared to be busy with more important issues like the Board of Control for Cricket in of India (BCCI) and the Indian Premier League (IPL) Today, he is too busy with the looming state assembly elections in Maharashtra, which happens to be the second largest producer of sugarcane and sugar after Uttar Pradesh. Sure, he conducts meetings and issues lame sounding statements that a sugar shortage is imminent and that the government will do everything it can to rein in prices. But the fact is, even industry insiders and government officials openly admit that sugar prices will almost certainly cross Rs 70 per kilo. And really, don’t be shocked out of your wits if prices touch or cross even Rs 100 a kilo in the not too distant future.
With both farmers and consumers crying out in distress even as sugar companies laugh all the way to the bank, the UPA government now knows that this crisis could prove to be enduring, dangerous and damaging. No wonder, there are reports of even UPA chairperson Sonia Gandhi expressing concern at rising sugar prices. No wonder, the Prime Minister’s Office (PMO) is officially cracking the whip and monitoring the rapidly developing crisis on a regular basis. No wonder, the authorities have gone back to that old bogey of “hoarding” with regular reports of sugar being ‘seized’ from godowns. And no wonder, they have passed a draconian order stating that no large consumer of sugar (read companies) can keep more than 15 days' stock of sugar.
But sugar prices keep rising. And the fact is, they won’t stop rising. Even students with an elementary understanding of economics will know why. Last year, sugar output in the country was 26.4 million tones.
batting for? In those days, Pawar appeared to be busy with more important issues like the Board of Control for Cricket in of India (BCCI) and the Indian Premier League (IPL) Today, he is too busy with the looming state assembly elections in Maharashtra, which happens to be the second largest producer of sugarcane and sugar after Uttar Pradesh. Sure, he conducts meetings and issues lame sounding statements that a sugar shortage is imminent and that the government will do everything it can to rein in prices. But the fact is, even industry insiders and government officials openly admit that sugar prices will almost certainly cross Rs 70 per kilo. And really, don’t be shocked out of your wits if prices touch or cross even Rs 100 a kilo in the not too distant future.With both farmers and consumers crying out in distress even as sugar companies laugh all the way to the bank, the UPA government now knows that this crisis could prove to be enduring, dangerous and damaging. No wonder, there are reports of even UPA chairperson Sonia Gandhi expressing concern at rising sugar prices. No wonder, the Prime Minister’s Office (PMO) is officially cracking the whip and monitoring the rapidly developing crisis on a regular basis. No wonder, the authorities have gone back to that old bogey of “hoarding” with regular reports of sugar being ‘seized’ from godowns. And no wonder, they have passed a draconian order stating that no large consumer of sugar (read companies) can keep more than 15 days' stock of sugar.
But sugar prices keep rising. And the fact is, they won’t stop rising. Even students with an elementary understanding of economics will know why. Last year, sugar output in the country was 26.4 million tones.
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Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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