Centre for sugar buffer stock

Financially strained and overburdened with unsold stocks, sugar mills across the country are expected to heave a sigh of relief with the cen...

Financially strained and overburdened with unsold stocks, sugar mills across the country are expected to heave a sigh of relief with the central government finally agreeing to create a maiden 15 lakh buffer stock in the country for one year and pay only the storage and insurance costs. The World Trade Organisation (WTO) compatible export incentives too would be extended by the Maharashtra government to sugar mills in the state, which could result in exports of around 15 lakh tonne of sugar from the country.

The various measures agreed to by the government on Thursday are expected to give the much-required financial and moral support to sugar mills. This, in turn, would also help arrest the slide in domestic sugar prices even as it is expected to make Indian sugar competitive in the international markets. These and other sugar industry-related decisions were taken on Thursday at a Cabinet meeting in New Delhi with Finance Minister Jaswant Singh.

According to Prakash Naiknavare, MD, Maharashtra Rajya Sahakari Sakhar Karkhana Sangh Ltd (Maharashtra Cooperative Sugar Mills Federation), “All stakeholders of the state’s sugar industry jointly apprised the finance minister of the fate of the industry which finally led to the government accepting our recommendations that will help in pulling the industry out of its current dire state.” A formal communication announcing the steps agreed to be taken would be issued over the next one week, Naiknavare said. Maharashtra, thus, becomes the first state in the country to come forward to help the sugarcane farmers. “We have been receiving requests from other sugarcane growing states like Karnataka, Andhra Pradesh and Gujarat,” Naiknavare said.

The Maharashtra government has agreed to forego around Rs 350 crore for one year from its kitty, a move that will help over 150-plus cooperative mills in the state. The state government would release Rs 1,000 per tonne as export incentive to the sugar mills; pay Rs 560 per tonne as the first installment to the farmers; defer by one year the sugar cane purchase tax and waive of for one year the fees leviable for giving crushing and export permission.