The Hindu Business Line : Sugar co-ops to seek new package from Govt

THE National Federation of Cooperative Sugar Factories Ltd plans to table a revival package before the new Government to provide succour to the sugar industry.

Mr Prakash Naiknavare, Managing Director, Maharashtra State Co-Op, Sugar Factories Federation Ltd, told Business Line that the Maharashtra Federation was taking the initiative to address the immediate grievances of the industry to both the Finance Minister and Food Minster.

"The proposal is being put together right now and should be tabled before them over the next 7-8 days," he said.

The proposal seeks to highlight several key issues and moot measures to alleviate the problems faced by the industry. Some of the measures suggested include asking them to finance rescheduling of loans with increased moratorium and repayment period, rationalise interest rate on loans and to take 2004-05 and 2005-06 as a block year.

It will also touch upon allowing import of raw sugar freely for refining to meet domestic white sugar requirement and the ethanol policy for augmenting of molasses for a sustained production of ethanol. The proposal will seek a finance package for the mills that would not go in for production due to want of raw material.

Commenting on the shortfall in sugarcane production, Mr Naiknavare said the sector was looking at a shortfall of around 27 lakh tonnes for 2004-05 with Maharashtra being the largest contributor in the decline in the sugarcane and therefore, sugar production.

"One major factor was the inadequate rainfall in June-Sept 2002 and June-Sept 2003. Today Maharashtra's sugar belt, which stretches across 11 districts, is facing severe drought. The water table has reduced and the moisture stress is so high that it has impacted the standing crop adversely. This is reflected in terms of reduced tonnage and reduced sugar content," he said.

Another factor that has contributed to the decline in production is said to be very heavy infestation of a new insect called woolyaphides. The insect has come in from Karnataka and has reportedly brought about a direct reduction of 27 per cent in productivity, which in turn has directly affected recovery by about 26 per cent.

"The severe drought has now brought about a distinct shift in priorities. Firstly, drinking water has become a major concern. Thereafter, it is the wellbeing of their livestock or cattle. Given that there is no fodder, the standing crop is used to save cattle," Mr Naiknavare said.

A close look at the table provided reveals the fact that there has been a 50 per cent reduction in production in Maharashtra in 2003-04 at 31.90 lakh tonnes as compared to 62.30 lakh tonnes in 2002-03.

"Even if it rains now, it is not going to help matters as the impact will be felt only for 2005-06. Our major problem is of seed. We have no seed and whatever standing crop is there will go for seed material. It is due to this that we will see a further shortfall from 32 lakh tonnes to 17 lakh tonnes in 2004-05. This is almost a 50 per cent drop," Mr Naiknavare said.

While Maharashtra maybe the leading contributor, other states are also expected to witness a decline in production. For 2004-05, Karnataka is expected to see a 10 per cent shortfall, TN an 8 per cent shortfall, Gujarat and Andhra Pradesh 5 per cent shortfall respectively, with only UP maintaining status quo. "If one were to look at the larger picture - it makes for a huge impact," he said.

Given the decline in overall production, which has led to scanty availability of sugarcane, only 50-55 mills of the 135 mills in Maharashtra will be taking up production.

More Stories on : Agricultural Policy | Co-operatives | Sugar

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