The government and sugar mills have not yet sorted out the differences over raising the levy quota as the industry is insisting on no restriction on open market sale.
There will be another round of meeting next week, Indian Sugar Mills Association President Samir Somaiya told reporters after he along with other representatives of private and cooperative sugar sector held the third round of discussion with Food and Agriculture Minister Sharad Pawar here on Thursday.
He said “the government told us about its concern on sugar availability during festive season, particularly in Diwali. We told that the policy should be such that the sugar production in future must meet the domestic demand.”
Asked whether the industry has agreed to supply more sugar under levy quota, he said there was no agreement, discussion was still continuing. The Centre is mulling to raise the levy quota as demand for sugar in Public Distribution System has increased. Under the levy quota system, all sugar mills are mandated to contribute 10 per cent of their production to the Centre at a rate fixed by the government. Mills complain that the levy sugar price is less than the cost of production. Levy sugar is distributed through ration shops at cheaper rates.
Industry wants that there should be no restriction in selling the remaining quantity in the open market, sources said, adding whatever formula be worked out should be valid for a year only.
The government has proposed three alternatives by hiking the levy quota to 20 per cent or 23 per cent or 25 per cent.
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Currently, the main restriction on open market sale of sugar is the release order mechanism, by which the government allocates the quantity for each mill every month. Former President of National Federation of Cooperative Sugar Factories Shivajirao Patil, who also participated in the discussion, said the important aspect is the policy about non-levy sugar.
“Whatever be the increase in levy quota, it depends on what is to be the policy regarding the remaining sugar. For the remaining sugar the prices should be such that they compensate the losses in levy sugar. Besides, any change that happens go with increased levy prices,” Patil said.
He also said that the cooperatives are ready to help the government in contributing more sugar under levy quota as the sector has also received help in times of need.