Sugar mills demand transport sop

The Maharashtra State Sugar Co-operative Factories Association Ltd. (MSCFAL) has asked the state government to give transport subsidy and compensate losses they might incur on recovery due to extended crushing season.

Due to good monsoon this year, Maharashtra's sugarcane production for 2006-07 season has increased by almost 80 per cent from 445 lakh metric tonne to 700 lakh metric tonne.

Now, the state government is pressing those sugar co-operatives and private sugar mills who have excess capacities to take responsibility of crushing sugarcane. The sugar co-operatives have shown willingness to take this burden but sought financial assistance from the government.

At a meeting with chief minister Vilasrao Deshmukh and other senior ministers and state government officials, MSCAFL representatives asked for transport subsidy of Re1 per tonne per kilometer to transport sugarcane which is outside their jurisdiction.

Besides, as the crushing season will get extended beyond April, sugar co-operatives fear it will adversely affect recovery of sugar. MSCFAL representatives have asked for subsidy of Rs 100 per tonne for loss of every one per cent in recovery if they have to run the factories beyond April, said sources in MSCFAL.

The MSCFAL representatives also pointed out that the advance given by the state co-operative bank before the beginning of the season as working capital has been inadequate this year as bank has set the bench mark price of sugar at lower level.

And if the benchmark price of sugar is not increased and sugar co-operatives are not made available adequate working capital then at least 20 to 25 mills will have to be closed down despite the availability abundant sugarcane.

Deshmukh assured that he would consider all the demands of MSCFAL and discuss them at Tuesday's cabinet meeting.

However, the government advised MSCFAL to approach the Centre on the issue of export subsidy. The MSCFAL is demanding export subsidy of Rs 200 per tonne to deal with excess sugar stocks.