The government of Maharashtra is likely to come up with more incentives to support the state sugar industry and enable them to operate in the next sugar season starting in October. |
The state Chief Minister Vilasrao Deshmukh has called a meeting to discuss the various options to help the industry. The meeting, scheduled for Sunday, will be held in the presence of the Union Food and Agriculture Minister Sharad Pawar. |
The meeting will consider various proposals to help the ailing mills, including granting pre-seasonal loans to cash-crunched cooperative sugar mills so that they can begin crushing in the next season. Further, there is also a suggestion to convert the deficit finance of sugar mills into mid-term loans. The deficit has occurred due to the loss of Rs 250 per quintal of sugar produced by these mills. |
The mills are also demanding the extension of state-offered export subsidy of Rs 1000 per tonne, which expires in September, to March next year and without any quantitative restriction. There is also a proposal to consider the waiver of the three per cent sugarcane purchase tax levied on mills for the 2007-08 season (October-September). |
Bumper output |
According to a primary survey conducted in the state, 85 million tonnes of cane will be available for crushing during the 2007-08 season. This means the state would produce about 9.5 million tonnes of sugar next season, up 4.4 per cent from this season's 9.1 million tonnes, said Ajit Chowgule, secretary, Maharashtra State Cooperative Sugar Federation. The country is already struggling with a huge surplus of stocks (with production rising 45 per cent in 2006-07 to 28 million tonnes) and a still higher production in the next season does not augur well for the industry. |
For the 2006-07 season, the state government has announced a subsidy of Rs 130 per tonne for every one per cent drop in recovery after April 16, transport subsidy of Rs 2 per km per tonne beyond 50 km for crushing additional cane, cane purchase tax exemption, grant of Rs 25,000 per hectare to farmers whose cane remains uncrushed after June 1. The government also granted an export subsidy of Rs 1000 per tonne for a quantity of 1 million tonnes, in addition to the subsidy announced by the central government. |