The Hindu : New Delhi News : Sugar export subsidy extension under study, says Sharad Pawar

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Saturday, Dec 22, 2007
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Sugar export subsidy extension under study, says Sharad Pawar

Gargi Parsai

NEW DELHI: The Union government is considering giving an extension to sugar factories for export subsidy in view of the expected high production this year. The production in 2006-07 was about 280 lakh tonnes and the output next year is expected to cross this level. During the year, the industry exported about 15 lakh tonnes. Against this, the accumulated sugarcane price arrears to farmers stood at Rs. 2,600 crore at the end of the 2006-07 season.

“Let us see what will be the total export during the sugar season. It looks like that we have already crossed about 1.5 million tonnes of export. If this trend continues, we will definitely give serious thought to extension by another year,” Agriculture and Food Minister Sharad Pawar told journalists after addressing the 73rd Annual General Meeting of the Indian Sugar Mills Association (ISMA).

Assistance for mills

During his address, Mr. Pawar, who was repeatedly cheered by sugar barons for the sops given to the industry, said defraying of internal transport, handling and marketing charges and ocean freight on sugar exports made on or after April 19, 2007, would be valid for one year. Mills in the coastal States would get an assistance of Rs. 1,350 a tonne and those in the non-coastal States Rs. 1,450. “The anticipated outgo from the Sugar Development Fund will be about Rs. 300 crore in the first year of the scheme.”

The Minister emphasised that this assistance was also to be used for payment of cane price, including arrears to farmers as the first priority.

With large stocks of sugar and fall in prices, the industry, he said, was passing through a difficult phase. As part of measures to bail out the industry, the government had created a buffer stock of 50 lakh tonnes, waived off the requirement for obtaining release order for export, extended the moratorium on outstanding term loans to five years and reduced the interest rate to 10 per cent, for which interest subvention of Rs. 600 crore would be given from the general budget.

The government had allowed factories to convert sugarcane juice directly into ethanol, and made mandatory blending of 5 per cent ethanol with petrol at an estimated uniform purchase price of Rs. 21.50 a litre ex-factory. From next year, blending of 10 per cent ethanol would be made mandatory. It would give the industry an assured market of 1,200 million litres.

Mr. Pawar, however, asked the industry to respond to the oil industry’s concerns about provision of ethanol supply during years of sugar shortage.

The government was trying to find a “workable solution” to the issue of some States imposing taxes and duties on ethanol and imposing restrictions on its inter-State movement.

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