Government and media have long blamed the price rise on the drought last year, on cost push and on poor distribution. Unfortunately, this is only half truth. Drought affected our country in July 2009, prices however have been on the rise since the beginning of 2008. The problem lies in various policies of our government. Though, the unfortunate story is the same with cotton, paddy as well as pulses, I’ll take sugar to prove my point. I’ve borrowed facts heavily from Kannan Kasturi, a prominent researcher and writer from New Delhi.
Government exported a lot of sugar after the record production in 2006-07 and 2007-08. Initially prices in the world market were higher than Indian prices and we made good profit. Then, unfortunately, in 2007, the world market prices fell. The central government, however, continued to push exports by waving taxes and providing a subsidy to exporters. In the next 3 years, a total of over 9.5 million tones of sugar were exported. This was not all. To curb sugar production, the Government held the Statutory Minimum Price (SMP) for 2008-09 at the same level as the previous year even while the support price for food grains was raised- all resulting in a severe fall in sugar production. The drought only added more to the crisis. Since then, the government has been importing sugar for the last two years at roughly double the unit price of the earlier exports.Export when prices are low and import when the prices double – that is India’s sugar story of the last 4 years.
Our government failed to foresee such a problem, but the solution lies with us. The intellectuals of our country must start participating in governance and be a part of the process. The government terribly lacks new brains. The educated class of my country tends to stay away from these issues and play their selfish roles in their own little lives. Failure of policies is tolerable, but failure of an entire generation is too difficult to take. It’s us…It’s us who are to blame!