Sugar cos may get sweetener

The state government and Nabard have accepted the demands to provide pre-seasonal loan, turning short margin money into medium-term loans and other demands in principal, claimed sources from sugar industry.

Maharashtra Chief Minister Vilasrao Deshmukh had called a meeting of office bearers of Maharashtra State Co-operative Sugar Factory Federation Ltd, Nabard and State Central Co-operative Bank officials, senior cabinet ministers on Sunday to help the state sugar industry which is reeling under the pressure of bumper crop and falling sugar prices. The meeting was also attended by Union Agriculture Minister Sharad Pawar.

This year too a bumper sugarcane crop is expected, of nearly 844 lakh tonnes, exceeding last year's production figures by 44 lakh tonnes.

Despite giving various sops, the sugar industry to extend the crushing season till May-end (normally the season ends by March-end or mid-April) nearly 30 lakh tonnes of sugarcane remained uncrushed, resulting in widespread resentment against the state government among the farmers.

The Nabard has agreed to make available pre-seasonal loan of around Rs 2 crore to each sugar mill and the state government has also agreed to give a guarantee to these loans, said sources from sugar industry.

However, final decision in this regard will be taken by Nabard during its board meeting and by the state government in the cabinet meeting both which are scheduled to held on the 19th of this month, sources clarified.

Besides this, the state government has agreed to waive off purchase tax on sugarcane for forthcoming seasons which will begin in October like last season, the state government has also agreed to provide export subsidy of Rs 1,000 per tonne to sugarcane like last season, claimed the sources from industry.

The Nabard officials also agreed to convert short-margin money up to Rs 636 crore into medium-term loan of five years with a flat rate of interest of 10 per cent per annum.

However, Chief Minister Vilasrao Deshmukh expressed the state government's inability to give sops to sugar industry for the forthcoming season like last year also and said, the state had to take on the burden of nearly Rs 580 crore and Centre also must pitch-in and contribute to helping the sugar industry from the state to survive in hard times.

However, it is not known what was the response of Pawar to Deshmukh's demand for central intervention.