What Is The Proposed Sugar Control Order 2024? Is It A New Era For The Sugar Industry?
Background and Rationale for the New Order
India has introduced a draft of the Sugar (Control) Order, 2024, aiming to update the regulations governing the sugar industry. This revision comes after significant technological advancements and multiple changes within the sector. The proposed order seeks to replace the existing Sugar (Control) Order of 1966, incorporating modern provisions to better regulate the industry, including its by-products.
The original Sugar (Control) Order was issued in 1966 and has undergone several amendments over the years. However, the government now believes that substantial changes in the sugar production process and industry trends necessitate a comprehensive overhaul. The draft order has been opened for public feedback, with stakeholders encouraged to submit their comments by September 23, 2024. The draft introduces new definitions and regulations to address ambiguities in the current framework. Industry experts have welcomed this initiative, stating that clearer guidelines will enhance government oversight and allow for more effective policy-making.Key Changes in the Proposed Order
A significant change in the draft order is the inclusion of "by-products" of sugar. "By-products" are defined as any product produced during sugar manufacturing. Such as ethanol (from B-heavy/C-heavy molasses, sugarcane juice, or sugar syrup), bagasse, potash-based fertilizers, compressed bio-gas (CBG), and bio-electricity from bagasse. This inclusion aims to regulate the entire spectrum of products derived from sugarcane, ensuring comprehensive industry management.Regulation of Khandsari Units
Another notable change is the inclusion of all Khandsari units with a capacity of 500 TCD (tonnes of sugarcane crushed per day) or more under the ambit of the Sugar Control Order. This means that these units will now be required to adhere to the same government regulations as sugar mills. They will have to purchase sugarcane at government-fixed prices and sell sugar according to government quotas. This measure is expected to bring uniformity and fairness in the treatment of different sugar-producing entities. For the first time, raw sugar is proposed to be included under the Sugar Control Order. If approved, all raw sugar produced by mills will need to comply with government-set rules. This move is seen as a step towards better regulation of the entire production process, from raw material to finished product.Concerns and Feedback
Despite the government's efforts to modernize the sugar regulation framework, there are concerns within the industry. Some stakeholders argue that the definition of by-products is too broad. They believe that the government's objective should be limited to controlling ethanol and sugar production. Therefore, items like bagasse, compressed bio-gas, potash derived from molasses (PDM), and press cakes should be excluded from the definition of by-products.Conclusion
The draft Sugar (Control) Order, 2024 represents a significant shift in how the sugar industry is regulated in India. By including by-products and expanding the scope of regulation to cover more entities, the government aims to create a more controlled and efficient industry. However, the industry has raised valid concerns, particularly regarding the broad definition of by-products. It is now up to stakeholders to provide constructive feedback to ensure that the final order balances regulation with the industry's operational realities.