Sugar factories in Maharashtra have put up a bill of R140 crore to the Centre, seeking claims against the export subsidy granted by the government for the 2007-08 period. Mills in the state claim that these bills have been pending with the government for the last three years.
Mills in the state have also been seeking an extension on the subsidy for the current season on the grounds that it will be easier to make cane payments to farmers if this issue is resolved. The Centre is expected to take a decision on extending subsidy on exports of raw sugar after assessing the production estimates for the current 2014-15 marketing year and sugarcane arrears to farmers.
Maharashtra State Cooperative Sugar Factories Federation ( MSCSFF) chairman Vijaysinh Mohite Patil recently met Union food minister Ram Vilas Paswan urging him to look into the long pending issue of claims on subsidy given on raw sugar exports.
According to Sanjiv Babar, MD of the federation, the export subsidy for the period 2007-08 was R1350 per tonne on a total amount of 60 lakh tonne. “Some of the mills find themselves in a difficult financial position since they are yet to receive claims. A decision should be taken by theCentre soon taking the falling sugar prices and rising costs of production into account,” Babar said.
According to information received from the Centre by the federation officials, some 1,235 claims with estimates of around R805.17 crore are pending with the government. The Centre is reported to have processed claims for R60 lakh and is yet to take a decision on the remaining claims, senior officials said. Around 106 factories from Maharashtra have submitted a list of 386 claims and petitions of 9 sugar mills are being heard in various courts.
Babar said that the federation plans to approach the Centre once again on this issue and also is seeking an extension on subsidy for the current season. “Mills have not entered into any contracts with traders since a decision is still awaited. Unless the subsidy is given, mills will not find it viable to produce raw sugar. It will be difficult to survive without incentives,” he said. Mills in Maharashtra had produced around 68 lakh quintals in the last season.
The subsidy scheme, which was announced by the then UPA government in February this year, ended in September. The Centre had in February announced a subsidy for export of raw sugar up to 4 million tonne during 2013-14 and 2014-15 marketing years (October-September) in order to help the cash-starved industry to clear arrears to sugarcane farmers.
It had fixed the subsidy at R3,300 per tonne for February-March and decided to review it every two months. The incentive was reduced to R 2,277 per tonne for April-May and the same was reinstated at R3,300 per tonne by new food minister Ram Vilas Paswan.
For August-September, the subsidy was R3,371 per tonne. Under the export incentive scheme, India had exported 7 lakh tonne of raw sugar in 2013-14 marketing year that ended last month. The country’s sugar production is estimated at 25-25.5 million tonne this marketing year as against the annual domestic demand of 24 million tonne.