Govt to pursue states to bear higher cane price diff: Pawar

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New Delhi, Dec 21 (UNI) Conceding the long-standing demand of the sugar industry in principle, the Government today announced that it would pursue the States to pay the difference between the higher 'state advisory prices'(SAP) of sugracane fixed by them and the lower 'statutory minimum price'(SMP) declared by the Centre on the plea of helping the mills in timely payment of cane-arrears to the farmers.

Agreeing to the industry's contention, Union Agriculture and Food Minister Sharad Pawar said the depressed prices of sugar have resulted in accumulation of cane arrears to the farmers at about Rs 2600 crore by the end of the sugar season 2006-07(September-October).

The Central Government has already taken a number of measures to financially assist the industry for payment of cane dues and it must ensure that farmers were paid their dues without any delay, said Mr Pawar, while inaugurating the 73rd Annual General Meeting of the Indian Sugar Mills Association(ISMA), here.

Referring to the industry's long-standing demand for rationalisation of the sugarcane pricing, by linking its price to the market price of sugar, Mr Pawar said the issue had already been deliberated upon by the government.

But, he sought to remind the gathering of sugar mill owners that the Supreme Court had already upheld the State Governments' right to announce SAP, invariably higher than the SMP, fixed by the Central Government. Therefore, the Central Government held detailed discussions in this regard with the concerned ministers of key sugar producing states, in October this year.

''Their response was positive but considering the sensitive nature of the matter, firm commitments and conclusive decisions could not be taken. Efforts were made to persuade the State Governments, from announcing irrationally high SAP for sugarcane,'' the minister said.

The government, however, declined to implement the Tuteja Committee recommendation, on enhancing the cane catchment area of a sugar mill from existing 15 km to 25 km. Mr Pawar advised the industry to make all efforts to increase yield of sugarcane instead of insisting on their demand.

Mr Pawar enumerated the steps taken by the Central Government to support the industry, which included creating of a 'buffer stock' of 50 lakh tonnes for a year and defraying of the internal transport, handling and marketing charges and ocean freight on sugar exports that cost the government around Rs 300 crore.

And, as per the SDF Rules 1983, the buffer subsidy would cost around Rs 880 crore and additional credit of Rs 970 crore for the sugar factories, to enable them to pay cane price arrears of 2006-07 sugar season.

Besides that, the requirement of obtaining release order from the Directorate of Sugar, for exports has been dispensed with, from July 31, 2007, allowing sugar factories to undertake sugar exports expeditiously to improve their liquidity position.

In addition to that, the mandatory blending of five per cent ethanol with petrol with immediate effect, except in J&K, North Eastern States and Island Territories has been cleared with proposal to allow 10 per cent blending from October 2008, barring the said areas.

The five per cent blend would open an assured market for 600 million litres of ethanol and 10 per cent would require 1200 million litres.

Uniform purchase price of Rs 21.50 per litre ex-factory for supply of ethanol which can be implemented all over the country for three years, Mr Pawar added.

On the laying down the BIS specifications for 10 per cent ethanol blended petrol, Mr Pawar informed the millers that the Department of Consumer Affairs is already working on it and was expected to finalise the standards by March 2008.

In the end, Mr Pawar sugggested ISMA to make united and strenuous efforts with the National Federation of Cooperative Sugar factories for converting the 'sugar factories' to 'sugar complexes' as per the need of the hour.

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.

UNI

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