New Delhi, Dec 20 (UNI) Sugar producers today urged the government to fix the mandatory sugarcane prices taking into consideration the raw material and finished product prices as is the situation prevailing in other major sugar producing countries.
The sugarcane arrears due to farmers have mounted to over Rs 2004 crore across the country due to irrationality in fixing of sugarcane prices, with Uttar Pradesh alone accounting for Rs 1106 crore as on December 18, 2007.
On the eve of the 73rd AGM of Indian Sugar Mills Association (ISMA) here today, its President P Rama Babu said the mechanism to supply levy sugar at a cheaper rate at the cost of the industry should be withdrawn.
''In case, however, the government in its wisdom still feels that such a system be continued, the support be provided directly by the government through a transparent mechanism of open market purchases of sugar and by supplying such sugar to the class of consumers as may be specified by the government at such lower prices as may be decided,'' Mr Babu said.
The government decided to withdraw the ban on sugar exports in January 2007 and while doing so, provided WTO consistent support by way of transport assistance from the Sugar Development Fund (SDF), although such support has been wholly nullified due to a steep increase in the value of rupee, he added.
In this context, the industry, however, hailed the government's decision to create a buffer stock of 5 million tonnes for one year with interest and wharehousing cost subvention, from the SDF.
Mr Babu also emphasised the need for consideration of government's policy prescribing a minimum distance of only 15 km for setting up a new unit and the said distance was fixed corresponding to a capacity of 2500 tonnes of cane crushing per day. Since then, a viable economic size of a sugar plant has increased to 5000 tonnes cane crushing per day and more, specially taking into account the associated renewable energy projects such as co-generation of power and production of ethanol.
Mr Babu urged the government that as recommended by the Tuteja Committee, the minimum distance norm be increased to at least 25 kms.
Sugar production during the current sugar season (October 2007-September 2008) is expected to be 30 to 31 million tonnes as against the record production of 28.4 million tonnes of sugar during 2006-07, according to the world's second-largest industry estimates.
The annual domestic consumption of sugar is assessed at about 19 to 20 million tonnes.
The production is likely to be less than the previous estimates of 32-33 million tonnes due to late crushing and climatic conditions, the ISMA Chief said.