Pawar asks states to promote ethanol blending

New Delhi, Oct 3 (UNI) Union Minister for Agriculture and Food Sharad Pawar today called upon the states to promote ethanol production from sugarcane with a view to tackle the glut in availability of sugar in the country.

Addressing the state Finance Ministers and Ministers dealing with sugar and sugarcane, Mr Pawar highlighted that against domestic consumption of about 190 lakh tonnes a year, sugar production in the coming year is likely to be about 290 lakh tonnes. This, together with the closing stock of about 119 lakh tonnes of sugar from 2006-07, has resulted in a very large sugar stock in the country.

The Minister stated that the Government has taken a number of steps such as creation of a buffer stock of 50 lakh tonnes, waiver of margin requirement on the buffer stock, and export assistance.

However, these measures cannot liquidate such huge stocks. High availability and low prices in the international market also disfavour exports. Because of this, sugar companies are reeling under huge arrears to be paid to farmers.

The answer to the cyclical problem faced by the Indian sugar industry probably lies in converting surplus sugarcane directly to the ethanol, the Minister said.

Emphasising that ethanol production would succeed only if continuous and adequate demand for ethanol is ensured, Mr Pawar called upon the states to remove all impediments imposed on free and unrestricted movement of denatured ethanol and avoid imposition of state taxes.

''The best way to achieve this is by including denatured ethanol of 99 per cent strength in the 'list of special goods' under the CST Act, 1956. Such a step will lead to many benefits from the point of the national objectives while improving the condition of a sugar industry and the sugarcane farmers to a large extent,'' he said.

Mr Pawar also argued that fixing State Advised Prices (SAP) by different states over and above the Statutory Minimum Price (SMP) fixed by the Central Government is leading to huge cane price arrears. The gap between the SAP and SMP has been widening for some states quite drastically.

This results in huge production of sugarcane and low sugar prices resulting in the sugar mills not being able to meet the cost of sugarcane and building up of cane price arrears.

As compared to last year when there were practically no cane arrears, the outstandings have risen to the tune of Rs 3,800 crore this year, affecting the entire sugar industry including the farmers, he said.

He mentioned that this has also led to sugarcane remaining on the fields even after extending the crushing period very long, like it happened in Maharashtra and Karnataka.

The meeting has been called specially to discuss issues relating to pricing of sugarcane and issues connected with ethanol production from sugarcane.

UNI