New package to bail out sugar sector in the offing

Pawar willing to consider decontrol

Food and Agriculture Minister Sharad Pawar yesterday said the government would soon announce a fresh bail-out package for the sugar sector. The minister said this would enable sugar mills to clear their dues and encourage farmers to take up fresh cane plantings.

A committee would be set up to expedite the formulation of the package, Pawar announced in his first press meet after taking charge of the twin ministries of agriculture and food.

He said he would also talk with various states to find out why many of them did not avail of the sugar packages offered by the previous government. He, however, rebutted reports that India would have to import sugar in the near future.

He said the country had enough stocks to meet the demand. However, he did not rule out the import of raw sugar solely for re-export after refining to help sugar mills utilise their surplus refining capacity.

"The government has an open mind on the issue and the matter can be discussed with the industry," he said.

Pawar, at the same time, added that he was personally opposed to the concept of import of any agri-based commodity. The minister also indicated the government was willing to consider the decontrol of the sector. All aspects of such a move would have to be looked into carefully, he said.

Pawar pointed out that the production of sugarcane and sugar had suffered because of drought in parts of the sugarcane belt of Maharashtra and Karnataka.

However, in other major sugarcane producing states, notably Uttar Pradesh and Bihar, the harvest was quite good. As a result, the country's sugar requirement would be met, he said.

Elaborating on the sugar scenario in Maharashtra, the largest sugar producing state, the minister said about 60 of the 140 sugar mills in the state could not take up crushing in last season because of paucity of canes in the wake of drought and the outbreak of a plant disease.

The government would ensure that more mills resume crushing in this season, taking advantage of the proposed sugar package, he said.

The government would approach the National Agricultural Bank for Rural Development and other financial institutions to reschedule the loans and short margins of sugar mills to ensure greater liquidity with the industry to resume production as well as pay the cane price arrears to the growers, he said.

The possibilities of offering a one-year moratorium on loan repayment would also be explored and the sugar package would be available to the mills in all states and not in Maharashtra alone, he pointed out.