20 lakh tonne buffer stock of sugar to be created

New Delhi, May 4 (UNI) In the wake of bumper production of sugar and in order to ensure that over production of sugar does not lead to a situation of mounting cane price arrears, the Central Government has decided to help the sugar producers to contain the cane arrears.

In a written reply in the Rajya Sabha, the Minister of State for Consumer Affairs, Food and Public Distribution, Dr Akhilesh Prasad Singh informed that the Government has decided to provide export assistance to defray the internal transport and freight charges, marketing and handling charges at the flat rate of Rs.1350 per tonnes on export of domestically manufactured sugar from sugar factories situated in the coastal States and at the flat rate of Rs.1450 per tonnes from sugar factories situated in other than coastal States.

Exports made under Open General License (OGL) only (and not under 'advance license') on or after April 19, 2007 and upto April 18, 2008 or till further orders, whichever is earlier, would be eligible for this assistance.

The estimated cost of export assistance is Rs.205 crore. The amount so received is to be used for cane price payment.

The Minister also said that to create a buffer stock of 20 lakh tonnes for a period of one year (May 1, 2007 to April 30, 2008) under which interest charges, insurance and storage charges for the quantity taken as buffer will be reimbursed to sugar factories.

The cost of this subsidy is estimated to be Rs.378 crore for one year. Further, banks would provide additional credit of Rs.420 crore on creation of 20 lakh tonnes of buffer. Thus, Rs.798 crore would be available with sugar factories to pay cane price to sugarcane farmers, for the sugar season 2006-07 including the cane price arrears of previous sugar seasons.

Dr Singh made it clear that the buffer subsidy and the additional credit are to be used exclusively for the payment of cane price.

UNI