The government is planning to extend for another year, the subsidy scheme on inland transportation of sugar for exports. It is also contemplating on the issue of a ?rational? sugarcane pricing policy linked to the sales proceeds of sugar and byproducts.
A notification is likely to be issued within a month, allowing sugar mills to produce ethanol directly from sugarcane juice or B-heavy ethanol. Mandatory blending of petrol with ethanol would be raised to 10% from October 2008 all over the country, with the exception of Jammu and Kashmir, northeastern states, and island territories. The Bureau of Indian Standards would finalise norms for 10% ethanol blended petrol by March 2008.
The Centre would persuade state governments not to impose levies on ethanol and ensure its free movement. The government had announced transport assistance on sugar exports till April 2009, which stipulates Rs 1,350 a tonne assistance to mills in the coastal states and Rs 1,450 a tonne assistance to those located in the landlocked states.
The Union food and agriculture minister, Sharad Pawar at the sidelines of the 73rd AGM of the Indian Sugar Mills Association (ISMA) in Delhi on Friday said, ?Due to falling global prices of sugar and the cost burden of the industry, we may extend the sops for one more year.?
He said that 60% of the global surplus of sugar was held by India, and in 2006-07 the production peaked to 28 million tonne. Hemmed in this situation, the industry was unable to pay the cane prices in time, and arrear payments to farmers accumulated to Rs 2,600 crore by September 2007, he said.
Pawar urged the industry to pay the farmers? dues with the earlier sops extended to them.
The minister informed the industry that the government has set up computerised systems to settle claims for buffer stock subsidy and export assistance. The directorate of sugar, in collaboration with the National Informatics Centre has begun creating a database on production, stock, prices, and exports, he said, and urged the industry to send timely data. Regarding the industry demand for a ?rational? cane pricing policy and preventing the state governments from announcing their own state advised prices (SAPs), the minister said that he discussed the issued with the ministers concerned from various states in October this year but ?considering the sensitive nature of the matter, firm commitments and conclusive decisions could not be taken.?
He said that the Supreme Court has upheld the state government?s right to announce SAPs. He, however, assured the industry that he would persuade the state governments from announcing irrationally high SAPs. Pawar turned down the industry demand for increasing the captive cane zone area from the radius of 15 km to that of 25 km. He urged the industry to work for developing improved cane varieties for better sugar production.