The sugar industry and Maharashtra government on Thursday made a fresh appeal to the Centre for the abolition of levy sugar, especially when the sugar manufacturing scenario in the country has undergone considerable change and the country is now having superfluous sugar production and baring exception exporting it consistently.
This apart, they have also urged the Centre for an early settlement of levy sugar price differential claims, revision of levy sugar prices and levy sugar transportation cost. In an interactive meeting with Minister for Food KV Thomas, state Chief Minister Prithviraj Chavan argued the Centre mightpurchase the sugar required for public distribution scheme from the open market.
The state government said it was obligatory on the party of sugar factories to provide levy sugar as per ratio fixed by the Government of India under the Essential Commodities Act, 1955.
A senior government official, who did not want to be identified, told Business Standard, “At the time of enactment of the Act, it was necessary for the imposition of levy. However, the situation has changed dramatically. Moreover, the nominee states are not lifting the sugar within the stipulated time as such the levy sugar stocks are piling up with the factories and their funds are locked up and factories are facing financial liquidity crunch and are unable to pay the cane price to the farmers. They are incurring huge losses on account of the supply of levy sugar well below the cost of production.”
Further, the state government brought to the minister’s notice that non-lifting of levy quantities of sugar by Uttarakhand, Jharkhand, Bihar and Chhattisgarh has worsened the situation this year.
Although the present sugar season is over, yet huge levy stocks of 2010-11 are still lying with the factories and it was causing huge financial burden and storage problem.
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“The government on behalf of the sugar industry requested to give specific period of two months for the nominee states for lifting the stock in absence of which the unlifted levy sugar be allowed to convert into free sale quota without continuation of the levy obligation and without obtaining the certificate from the respective nominee states that they are not lifting the allotted levy quantity,” the official said. He added the minister was urged to issue necessary orders at the earliest to facilitate the factories to liquidate their stocks.
The unanimous appeal by the state government and the sugar industry comes at a time when Maharashtra is expected to have a record output of 9.3 million tonnes in 2011-12 against 9 million tonnes in 2010-11.
Moreover, the state government also called on the food minister to revise the levy sugar prices for five seasons, including 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09. This was necessary in view of the increased cost of inputs, including water and electricity charges, fertiliser prices, wages, cost of cultivation and production.
A senior office-bearer of the Federation of Cooperative Sugar Factories in Maharashtra, a representative body of 170 units, said, “Although the Government of India has completed the cost study of the sugar and have revised upward the statutory minim price/fair and remunerative price for the sugar seasons mentioned above, levy sugar prices based on the cost of production have not been announced despite the factories have delivered the levy sugar to the nominee states at old rate of 2003-04 season.
There is an urgent need to revise levy sugar prices as the factories have incurred huge financial loss and they are unable to pay remunerative prices to the sugarcane farmers.
The federation official said the Centre needs to repeal the Sugar (Packing & Marketing) Order, 1970 and thereby it should not be made mandatory for the sugar industry to use jute bags for sugar packing.