On
behalf of the Indian sugar industry, we welcome the following steps
taken by the Government to help the sugar industry and sugarcane farmers
to come out of the current financial crisis:-
(i) Adoption
of a fixed pricing policy linked to sugarcane price for ethanol
procurement which has ensured quicker finalization of offers.
(ii) Removal of Central Excise duty on ethanol which has given higher returns to mills/suppliers of around Rs. 5 per litre.
(iii) Decision to move to 10% ethanol blending with petrol which has increased the demand for fuel ethanol to 266 crore litres.
(iv) Announcement
of interest free loan of around Rs. 6000 crore to the sugarcane
farmers, which has resulted in reduction of cane price arrears of Rs.
4000 crore.
(v) Timely
decision in September 2015 to export 4 million tons of sugar, duly
fixing an export quota for each sugar mill for exporting the same in
2015-16 SS.
The
Government has recently decided to assist the sugar mills with a
production subsidy of Rs. 4.50 per quintal of sugarcane crushed during
2015-16 SS, amounting to a total of Rs. 1147 crore. We acknowledge that
this is the first time ever that the Central Government will be paying a
part of the cane price, fixed as FRP, directly to the cane farmers.
This shows Government’s commitments towards both the sugar industry and
the farmers at large. We welcome this decision of the Government to
directly participate in payment of cane price, especially when the
revenue realization of sugar mills is not good.
While
thanking the Government for the above positive steps taken to help the
industry revive from a major financial crisis, ISMA has requested that
the State Governments, who are not permitting production of fuel ethanol
or delaying excise permissions or creating impediments on inter-state
movements by imposing taxes and duties on such an important fuel, should
be convinced to remove these impediments. It will not only replace
some of the imported petroleum and reduce foreign exchange outgo but
will directly benefit the sugarcane farmers in the country.
ISMA
also acknowledges the fact that the Central Government is taking steps
to rationalize sugarcane pricing policy. We would continue to request
acceptance of the recommendations of the Commission on Agricultural
Costs and Prices (CACP) for a revenue sharing or a cane price-sugar
price linkage formula along with the Price Stabilization Fund to bridge
the gap between FRP and what the industry can pay.
The
industry is responding in the best possible manner by trying to export
sugar, even though exports are unviable and the mills are losing money.
The industry body Indian Sugar Exim Corporation (ISEC) was accordingly
asked by us to take the lead, who have responded well by contracting for
one lac tons of export contracts in October 2015.
The
industry has responded well by contracting for 104 crore litres of
ethanol supplies (against 78 crore litres in 2014-15), which will
straightaway save the Government almost Rs.5000 crore of foreign
exchange. We expect to contract for more ethanol supplies, in the next
couple of months for the upcoming season, as and when EoIs are invited
by oil marketing companies.
On
behalf of the sugar industry, ISMA would assure the Government that the
industry will do its best to achieve the targets set by it for the
industry on sugar exports and ethanol blending with petrol.
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