The Hindu Business Line : Pawar to meet sugar officials today

Prof M.S. Swaminathan handing over a report of the `Task force on agricultural bio technology' to the Agriculture Minister, Mr Sharad Pawar, in the Capital on Wednesday.

New Delhi , June 2

THE Agriculture and Food Minister, Mr Sharad Pawar, seems very much a man in a hurry. The Maratha strongman will be convening a meeting here tomorrow of top officials in his Ministry and representatives of the Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd (NFCSFL) to sort out the immediate problems facing mills and sugarcane growers.

The focus of the meeting, sources said, would be to discuss specific steps to be taken "on a war-footing" to encourage farmers to plant sufficient sugarcane this time, so that mills have enough raw material to crush at least in the 2005-06 season (October-September). ``There is very little time to lose, as the monsoon is just round the corner in most cane growing areas. If farmers are not given the right incentive to plant cane, they would rather grow maize or soyabean, which are fetching good prices now,'' they pointed out.

The specific incentives being talked about include providing credit to enable growers purchase seeds, fertilisers and pesticides and rescheduling repayment of existing loans. According to the sources, the drought in major cane growing States like Maharashtra, Karnataka and Tamil Nadu has led to many farmers defaulting on their existing loans, which automatically makes them ineligible to avail new crop loans. In the case of cane, the production credit requirements are much higher relative to other crops that demand less nutrients or seed.

But even if adequate liquidity for planting cane is ensured, its actual impact would be felt only during the 2005-06 season. This is because the planting time for cane ranges anywhere from 12 months (for the `suru' crop in Maharashtra) to 15 months (pre-seasonal crop) and 18 months (for the `adsali' crop). The planting of cane for the 2005-06 season would start from end-June and stretch till February, next year.

But the above measures would obviously not address the problems that mills would face in the coming 2004-05 sugar season, beginning October. Barring Uttar Pradesh, Uttaranchal, Punjab, Haryana and Bihar, there is very little cane available for crushing in the coming season. Mills in Maharashtra, for instance, crushed 535 lakh tonnes (lt) of sugarcane during the 2002-03 season. But in the current season, they have been able to crush only 290 lt, which is likely to further fall to 150 lt in the 2004-05 season. During the 2002-03 seasons, 150 mills in the State were able to run at 100 per cent capacity, whereas the cane available this season sufficed for only 136 mills to run at 51 per cent capacity. During the coming year, the number of operational mills are likely to drop to just 100, which will be able to run at 50 per cent capacity.

The sources said that a broad formula is being worked out to ensure all mills in the country have sufficient raw material to crush in order to operate at 50 per cent. ``Mills will be clubbed into three categories: those having cane to operate at 50-55 per cent capacity, those who can run at only 15-20 per cent and those having no cane at all. Mills in the second category will be allowed to import raw sugar to enable them to touch 50 per cent capacity utilisation. For the third set of mills, who are lying closed simply because there is no cane available for crushing, steps will be taken to cover their fixed overheads and administrative expenses, such as wages and salaries,'' they added.

Mr Pawar is also said to be pushing for the announcement of a `sugar policy' for the country by early August. The Committee under the Secretary, Food and Public Distribution, Mr S.K Tuteja, set up by the previous Government to prepare a package for revitalisation of the sugar industry and suggest a long-term policy for the sector, has been asked to expedite submission of its report by end-July.