NEW DELHI: The Central Government was committed to deregulate the sugar industry but would do it on a sustainable basis. "Deregulation must balance the interests of the sugarcane grower, the industry and the consumer. Therefore, its timing is important and the government will take the appropriate decision at the right time,'' Union Agriculture and Food Minister Sharad Pawar said here on Thursday while inaugurating the 71st annual general meeting of the Indian Sugar Mills Association (ISMA).

He announced the government's intention of reviving the system of maintaining a buffer stock of sugar of up to four million tonnes from the new sugar year beginning October 1, to ensure price stability. However, this time, the factories will keep the buffer sugar in their godowns.

"The current sugar quota release mechanism is adequate to keep prices in check. We want to keep the retail price of sugar at Rs. 20 a kg," he said, underscoring the need to turn attention to increasing the yield of sugarcane.

Export obligation

Urging the industry to meet the export obligations on the import of raw sugar against advance licences, Mr. Pawar said the sugar produced from raw sugar would be exempt from the compulsory ten per cent levy obligation. The government was examining the issue of restructuring the Sugar Development Fund loans for potentially viable but sick sugar mills.

He said sugar production this season was estimated to cross 180 lakh tonnes as against 127 lakh tonnes last year. Realisation from sugar had also improved resulting in liquidation of sugarcane price arrears with the outstanding dues at Rs. 69.48 crore, marking 0.56 per cent of the total cane price payable.

Calling upon the sugar industry to convert mills for diversification into developing appropriate technology for producing ethanol, he said a consensus on the pricing of ethanol would be evolved with the Petroleum Ministry.

Captive power

Speaking on the occasion, Finance Minister, P. Chidambaram, said the National Bank for Agriculture and Rural Development (NABARD) had announced a package for restructuring sugar mill loans.

He asked the industry to produce maximum captive power for its own use and supply the surplus to the grids. The industry should produce more of the less polluting ethanol for supply to oil companies, he added.

In her presidential address, the outgoing President of ISMA, Rajshree Pathy, demanded total decontrol of sugar, abolition of the system of levy of ten per cent of sugar production and for increasing the radial distance norm for setting up new sugar factories to 40 km from 15 km.

C. P. Nopany will be the new president of ISMA.

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