Research On Global Markets
Syndicated Market Research Report
Amidst rising global tension around sugar prices and exports from India, farmers and manufacturers look towards the government to offer an amicable solution. Recently Australia moved the World Trade Organization (WTO) seeking probe in India’s continuous subsidies to farmers leading to ‘glut’ and ‘depressed’ global pricing. Along side Australia even Brazil joined in filing a formal complaint against India with the World Trade Organization. Back home, the sugar industry in India is a major contributor to the agro-based economy in particular and hence a major driver of the economy of the country in general. For years together farmers and mill owners have been complaining of lack of consistent policies and fragmentation, leading to losses and debts. However, the recent union budget proposed certain reforms and sops for the sugar industry which have been welcomed by the community. As per reports published in leading newspapers, “The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister, Mr Narendra Modi, has decided to keep the Fair and Remunerative Price (FRP) of sugarcane unchanged at Rs 275 per quintal for the period of 2019-20 marketing year.” As per government officials, this decision is likely to help sugar mills liquidate and reduce sugar inventories leading to stabilization of sugar prices and facilitating timely clearance of cane price dues to farmers. This decision is touted as an excellent one which is taking care of the interests of farmers as well as mill owners and hence analysts believe that the revenue generation of Sugar Industry in India will likely grow. However, at a time when India is facing criticism from allies like Australia and Brazil for continuing the subsidies and the involvement of the WTO to probe any breaches by the country, just looking after interests of domestic farmers and mill owners may not be enough. It’s also important to understand the grievances of other countries whose local jobs are threatened because of our subsidies. Under such circumstances, one has to wait and watch to see how long the government can retain the subsidies without hurting global sentiments and impacting trade relations.
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