 "Maharashtra sugar cooperatives unhappy over raw sugar subsidy")
Cooperative sugar industry in Maharashtra said the Centre's subsidy of Rs 4,000 a tonne for export of 1.4 million tonne of raw sugar is too little to survive especially amidt the falling prices.
They fear that the raw sugar export package is not enough for the factories to make the payment of fair and remunerative price (FRP) to cane growers.
Sanjeev Babar, managing director, Federation of Cooperative Sugar Factories in Maharashtra told Business Standard, "The Federation will make a fresh appeal to the Centre to provide financial support of Rs 700 per ton, create buffer stock of 7.5 million ton and increase import duty to 40% from the present level of 25% to provide much needed relief to the cooperative sector.''
Further, Babar said the Centre needs to provide raw sugar subsidy since the beginning of the current crushing season 2-014-15 and not from the day of issue of notification. ''The incentive amount should be made available within a specific period which will come quite handy for factories to pay the FRP to cane growers,'' he added.
Babar said that in all 178 sugar factories comprising 99 cooperative and 79 private are currently engaged in cane crushing during the current season and they have so far produced 6.77 million tonne of sugar. The sugar production is expected to be 9.2 million by the end of crushing season.
In Maharashtra, FRP for 9.5% recovery is Rs 2,200 a tonne while the current sugar price is Rs 2,350 per quintal. There will be a rise of Rs 232 a tonne in FRP for every one% rise in recovery. For 11% recovery, FRP comes to Rs 2,650 a tonne. Already, the Office of the Sugar Commissioner has launched revenue recovery proceedings against factories for their default in the FRP payment.
Rahul Kul, Chairman, Bhima Sugar Cooperative Factory situated in Pune district observed that the Centre's raw sugar subsidy package should have been released quite early.
''Besides, the government's condition of 25% ethanol sale to oil marketing companies (OMC) mentioned in the raw sugar subsidy package should have been released at the time of launch of current crushing season. The government is demanding 5% deposit at the time of quoting of ethanol supply which is also not possible due to the present financial crisis faced by the cooperative sugar sector,'' he noted.
He demanded that the government should remove the condition that the raw sugar incentive would be available if factories offer to supply ethanol to OMCs under the ethanol blending programme up to 25% of their annual production level of alcohol.
Kul, who is also the legislator of Rashtriya Samaj Party which is an ally of ruling BJP in Maharashtra, suggested that the Centre should create buffer stock, restructure mid term loans and OMCs make ethanol payment to factories within a week instead of 45 days. Moreover, he demanded that the government lifts sugar required for public distribution scheme directly from the factories instead of trader and NCDEX.