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PUNE, June 3

THE Government has decided to extend financial assistance by way of loans at concessional interest rate to sugar factories for bagasse-based co-generation, production of ethanol from alcohol and improving the quality of sugar.

The Union Minister of Consumer Affairs, Food and Distribution, Mr Shanta Kumar, disclosed this at the 23rd session of the International Commission for Uniform Methods of Sugar Analysis (ICUMSA) on Monday.

``It is imperative now, in the competitive economic order, that sugar industry must maximise its earnings from value added by-product utilisation,'' he said.

He said among the areas identified was bagasse based co-generation. ``There is a potential for generating 3,500 MW of power from bagasse out of which hardly about 250 MW is presently generated,'' he said.

Similarly, ethanol was a renewable source of energy and could be generated both from molasses and cane juice. The Minister said following the Brazil and the US example, the Central Government had decided to blend ethanol in petrol as an auto fuel. Sugar factories willing to produce ethanol would be extended financial aid, he said.

Another significant area pointed out by the Union Minister was the improvement of quality of sugar. ``As long as sugar was traded only in the country in a sheltered market and the industry was regulated, there was not much incentive for the sugar factories to improve the quality of sugar.''

It has been decided to cover sugar and sugar products under the voluntary certification scheme of the Bureau of Indian Standards. For improving the sugar quality, the Minister said it had been decided to reimburse internal transport and freight charges on export shipments of sugar. The ICUMSA value of plantation white sugar in India should be below 100 so that sugar fetched higher price in the international market and could be easily exported, he added.

Mr Annasaheb M.K. Patil, the Union Minister of State for Rural Development, who was present on the occasion, said the industry should look at other by-products of sugar, especially the energy-based products.

Ethanol could be used not only as gasoline but also as biodiesel, he said. He noted that time would come when energy would be manufactured from agri-products such as sugar, beet, corn or any other sweetening material. He added trends had also been started in the US for developing ethanol from straws. Mr M. Manickam, President, ICUMSA in his welcome address noted that India should not worry about production as the consumption of sugar in the country increased by about one million tonnes per annum. ``Ten years down the line, we would be consuming about 26-27 million tonnes of sugar,'' he said.

The country has about 450-odd sugar factories and has produced as much as 18 million tonnes of sugar during 1999-2000, 2000-2001 emerging the largest sugar producing country in the world.

``With this record production, we are left with substantial surplus quantity after meeting our domestic consumption. It has therefore become imperative in the last few years to undertake concerted efforts to push up exports both to meet the surplus situation and to earn more foreign exchange,'' he pointed out.

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