The Hindu Business Line : Sugar sector seeks early clearance of subsidy claims

Coimbatore, Aug. 24 The sugar sector is awaiting notification from the Union Government on the method of how buffer stock allocation will be determined and methodology for submission of export subsidy claims.

“The export subsidy claim has not been cleared for over 4 years now, from 2002-03,” industry sources told Business Line.

Stating that the mills were already reeling under crisis and such inflows would definitely give some respite to the ailing industry, the sources said the Centre should, instead of holding back the claims, clear the sums immediately from the Sugar Development Fund.

Meanwhile, it is learnt that the buffer stock allocation for the Tamil Nadu mills is lower than their counterparts in Uttar Pradesh and Maharashtra. And even within the State, the buffer allocation for the private sugar factories is said to be lower than the co-operative units.

Industry sources said it could possibly have been due to the aggressive export by the mills in the private sector.

“Since the Government encourages exports, the exported sugar should be regarded as “deemed stock” for the purpose of buffer. When such a rationale is followed for monthly releases, it must be applied for buffer stock as well,” the source argued.

The buffer stock is said to have shot up by 50 per cent. Sources allege of an inequitable factory-wise buffer allocation, not only among the sugar producing States, but within Tamil Nadu with the private factories getting lower allotment.

“While the increase is 55 per cent for Uttar Pradesh, 60 per cent for Maharashtra, it is just about 15 per cent for Tamil Nadu. Even Andhra Pradesh and Karnataka got a 40 to 45 per cent increase,” the source lamented. On the Centre’s export incentive of Rs 1,350/tonne of sugar (exported for the period ending March 2008) for coastal States like Tamil Nadu to partially cover local transport costs, port-handling charges, ocean freight etc, the source said “this would have very little impact on the industry, particularly because of dollar depreciation.”

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