THE HINDU Editorial Vocabulary - June 16, 2018 - Topic 2
Sweet nothing: on
bailout scheme for sugarcane farmers
A little over a month after the Centre proposed a
special cess under the GST to help alleviate distress among sugarcane farmers,
the Cabinet Committee on Economic Affairs approved a Rs.7,000- crore package
for the sugar sector last week. This package, with a mix of assured minimum
pricing and special incentives for increasing molasses and ethanol production
to gainfully mop up the glut of sugar in the country, is independent of the
cess proposal that was expected to raise Rs.6,700 crore.
To put this in
perspective, sugar mills’ dues to farmers stand at Rs.22,000 crore. Under the
proposed bailout scheme, the government will procure sugar from mills at a
fixed minimum price to help them clear dues to farmers, and also offer them
other financial assistance. Only about Rs.1,175 crore, however, will be used
towards procurement of refined sugar from mills to create a buffer stock of 30
lakh tonnes. This is a fraction of the 63.5 million tonnes output expected in
the two sugar seasons from October 2017 to September 2019. With the record
output, sugar prices have dropped from an average of Rs.37 a kg in the previous
season to Rs.26 in the current season. The bailout plan promises to pay Rs.29 a
kg. Sugar mills say this is below their production cost of Rs.35 a kg, though
it may dissipate their immediate liquidity problems to an extent.
Rating agency Crisil reckons that the fixed price
for sugar at mill gates and the buffer stock will at best help mitigate about
40% of the outstanding arrears to sugarcane farmers. And as production will
rise again in the coming season, so will the extent of arrears. The rest of the
package will take time to materialise, with Rs.4,440 crore of loans and
Rs.1,332 crore of interest subsidies for greenfield and brownfield distillery
capacities. Over time, this could help to use excess sugar for the manufacture
of alcohol or ethanol, but it will not be soon enough to address the present
crisis. All said and done, the Centre’s sweetener for the sector does little to
address structural problems and sticks to old-style pricing and stock-holding
interventions instead of signalling a shift to market-driven cropping
decisions. The political compulsions driving the bailout are obvious, given
that the sugarcane crisis was a rallying cry in the by-election in Kairana in
Uttar Pradesh, which the BJP lost. But that is no excuse for not thinking the
package through. Perpetuating the complex web of state controls in a
politically-sensitive sector is no solution. The best way to address the
problem of excess supply in the long run is to ensure some linkage between the
price paid for sugarcane and the end-products it is used for; and encouraging
the feedback from market prices to inform farmers’ future cropping decisions.
The current sops-driven solution could distort the agriculture sector further.
Vocabulary
Alleviate: make
suffering, deficiency, or a problem less severe.
Example: He
couldn't prevent her pain, only alleviate it
Synonyms: reduce, ease, relieve, deaden, dull, diminish, lessen
Assured: protected
against discontinuance or change.
Example: An
assured tenancy
Synonyms: guaranteed, certain, sure, secure, reliable, dependable, sound, infallible
Incentives: a
thing that motivates or encourages one to do something.
Example: There
is no incentive for customers to conserve water
Synonyms: inducement, motivation, motive, reason, stimulus, stimulant, spur
Perspective: a
particular attitude toward or way of regarding something; a point of view.
Example: Most
guidebook history is written from the editor's perspective
Synonyms: outlook, view, viewpoint,
standpoint, position, stand
Procure: obtain
something, especially with care or effort.
Example: Food
procured for the rebels
Synonyms: obtain, acquire, get, find, come
by, secure, pick up, buy, purchase
Dissipate: squander
or fritter away money, energy, or resources
Example: He
had dissipated his entire fortune
Synonyms: squander, fritter
(away), misspend, waste, be prodigal with
Mitigate: make
less severe, serious, or painful.
Example: He
wanted to mitigate misery in the world
Synonyms: alleviate, reduce, diminish, lessen, weaken, lighten, attenuate
Intervention: the
action or process of intervening.
Example: They
are plants that grow naturally without human intervention
Perpetuating: make
something, typically an undesirable situation or an unfounded belief continues
indefinitely.
Example: The
law perpetuated the interests of the ruling class
Synonyms: keep
alive, keep
going, preserve, conserve, sustain, maintain
Feedback: information
about reactions to a product, a person's performance of a task, etc., used as a
basis for improvement.
Example: We
improve our products, based on feedback , until they're the best.
Synonyms: response, reaction, comments, criticism, reception, reviews
