Govt rules out creation of sugar buffer stock to help millers

The government is not considering the sugar industry's demand for creation of buffer stock of 2 million tonnes of sweetener to help millers in clearing over Rs 21,000 crore dues to cane growers.

Addressing a press conference today to highlight one year's achievement of his departments, Food and Consumer Affairs Minister Ram Vilas Paswan described the outstanding sugarcane dues to farmers as "complex" issue and said it is the millers' responsibility to clear the arrears.

"Cane arrears have crossed Rs 21,000 crore so far. The Centre does not have much role. We fix Fair and Remunerative Price (FRP) of sugarance. If millers do not pay to farmers then states have powers to take action against them," he said.

To improve the finances of cash-starved millers, the Minister said that the Centre has already taken many measures including hike in sugar import duty to 40 per cent, subsidy of Rs 4,000 per tonne for export of 1.4 million tonnes of raw sugar and promotion of ethanol blending.

"Mills are demanding creation of buffer stock. Even former Agriculture Minister Sharad Pawar has written a letter to the Prime Minister in this regard. ...This matter is not under the government's consideration," he said and added that the creation of buffer stock is not a long-term solution.

Last month, NCP chief Pawar had met the Prime Minister to discuss the problems faced by the sugar industry. He had also demanded creation of buffer stock to bail out millers.

India's sugar production is estimated to touch 28 million tonnes in 2014-15 marketing year (October-September), as against 24.3 million tonnes in the previous year.

The total annual demand is pegged at 24.5 million tonnes, while exports are projected at 0.7 million tonnes. This means, the country would have an opening stock of 10.3 million tonnes of sweetener when mills start new marketing year in October.