Financial Daily from THE HINDU group of publications
Friday, Dec 23, 2005
Financial Daily from THE HINDU group of publications Friday, Dec 23, 2005 |
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Agricultural Policy Agri-Biz & Commodities - Sugar Govt committed to sugar decontrol: Pawar Our Bureau
The Finance Minister, Mr P. Chidambaram, with the Minister for Agriculture, Consumer Affairs, Food and Public Distribution, Mr Sharad Pawar, at the 71st AGM of Indian Sugar Mills Association in the Capital on Thursday. - Kamal Narang
New Delhi , Dec. 22 THE Government is committed to decontrolling the sugar sector at the right time, according to the Union Minister of Agriculture, Consumer Affairs, Food and Public Distribution, Mr Sharad Pawar. However, he did not give a timeframe for the process. "Deregulation of the sugar industry should be on a sustainable basis and the Government will take an appropriate decision at the correct time. Deregulation must balance the interest of sugar industry, sugarcane growers, and the consumers and hence, the timing of deregulation is an important factor," he said while addressing the AGM of the Indian Sugar Mills Association (ISMA). Currently, the Government regulates the sugar release mechanism into the market on a monthly basis by deciding the quantity of sugar that is to be sold in the open market and through the public distribution system. The sugar industry has been demanding decontrol of the sugar release mechanism. Mr Pawar stressed the need to keep sugar prices in control in view of the hardening of sugar prices worldwide. "We would like to ensure that consumers don't pay higher than Rs 20-21 a kg for sugar and farmers don't get less than Rs 1,200 a tonne of sugarcane," he told newspersons on the sidelines of the meeting. On ISMA's demand to increase the radial distance for mills from where they can access sugarcane, Mr Pawar said: "We are examining the issue with an open mind keeping in view the need for optimisation of cane output and the need for increase in sugar production." He stressed the need to increase yield from sugarcane rather than increasing area under cultivation. "Currently, there may be some scope of increasing area under sugarcane cultivation in some States, but there is a limit to which cane area can be increased. There is an urgent need to turn our attention to increasing the yield of sugarcane." The Finance Minister, Mr P. Chidambaram, said: "Decontrol of sugar will eventually mean decontrol of sugarcane. The sugar industry should reflect on this before demanding decontrol in release mechanism." Ms Rajshree Pathy, President of ISMA, demanded total decontrol of sugar, abolition of the levy of 10 per cent on sugar production, and increase in the radial distance norm for setting up new sugar factories to 40 km from 15 km currently.
Govt lists measures to revamp sick mills
THE Government has listed measures to help restructure various sick sugar mills. The Department of Food will soon be taking a decision on the issue of restructuring of loans from the Sugar Development Fund (SDF) for potentially viable but sick sugar mills, said Mr Pawar. He added that the Government has reduced the rate of interest on SDF to two per cent below rate and currently charges an interest rate of about four per cent a year. Orders have also been issued to ensure that the loans are available to all co-operative mills financed by urban co-operative bodies for restructuring, said Mr Chidambaram, referring to the cheaper finance restructuring options announced by Nabard earlier this year for co-operative mills. He also said that banks that are members of the Indian Banks' Association are extending easy finance through corporate debt restructuring (CDR) mechanism to private mills too. "I have been told that 16 sugar mills have been restructured through the CDR mechanism." Moreover, Mr Pawar and Mr Chidambaram stressed the need to focus on ethanol production and power co-generation. The sugar industry in India has an estimated production capacity of 2,000 million litres of alcohol a year, of which about 800 million litres of ethanol can be spared after meeting the requirements of potable and industrial alcohol for blending in petrol, said Mr Pawar. He added that with regard to the price of molasses, a consensus on the pricing of ethanol has to be arrived at in co-ordination with the Ministry of Petroleum and Natural Gas. He also called upon the sugar industry to focus on bagasse-based co-generation of power as the sugar industry has the capability to produce about 3,500 MW but is currently producing only 400 MW.
Related Stories: More Stories on : Agricultural Policy | Sugar
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