Ajit Singh advocates for beleaguered sugar industry

Demands Centre should announce incentives for 3 million tonnes of sugar export

The beleaguered sugar industry today received support from expected quarter of Rashtriya Lok Dal (RLD) president and civil aviation minister Ajit Singh.

Singh today sought Prime Minister Manmohan Singh’s “personal intervention” for the resolution of crisis facing the sugar sector. UP alone accounts for about 30% of the domestic sugar output.

RLD wields considerable influence in the sugarcane belt of western Uttar Pradesh.

In his letter to the PM, Ajit Singh suggested urgent measures that needed to be taken up in the next cabinet meeting, for keeping sugar industry afloat.

He demanded the Centre should announce incentives for 3 million tonnes of sugar export.

“We need to export sugar and not import cheap sugar from Brazil and Pakistan. Hence, the import duty on sugar should be increased from 15% to between 40-60% immediately,” he said referring to the surplus stock in India.

He further suggested a scheme to provide loans to sugar mills for 4-5 years, for which interest be provided by the government form general exchequer and sugar development fund.
 
Singh demanded a part of sugar surplus be diverted to making ethanol. Since oil companies provide the right price for ethanol, 15-20 tonnes of surplus sugar stocks could be reduced.

“This would provide the much needed cash flows to mills…it will also save foreign exchange for the country and oil imports to that extent, helping to reduce the CAD (Current Account Deficit).”

He mentioned UP sugar industry was burdened with Rs 2,400 crore sugarcane arrears for the 2012-13 crushing season, even as current season has arrived.

“…the exercise to determine the cane requirement and cane reservation for a mill, gets over the end of August every year, but due to previous year’s arrears, lack of clarity of the cane pricing and the depressed sugar prices, the millers have kept away from the process,” Singh mentioned in his letter.