Pawar hints at more sops for sugar firms

The government will consider more incentives to bail out the sugar industry that is currently facing a tough time due to falling prices amid an expected record output of about 265 lakh tonnes in the 2006-07 season.

"We have announced export subsidy.... There is also a decision to create a buffer stock of 20 lakh tonnes of sugar. If more needs to be done, we would definitely consider," Agriculture and Food Minister Sharad Pawar told reporters.

Pawar, who was speaking on the sidelines of the 78th AGM of the Indian Council of Agricultural Research Society, denied the government had received any demand from the industry to increase the buffer stock to 50 lakh tonnes.

"I have not received any such demand to increase the buffer stock to 50 lakh tonnes from the current level of 20 lakh tonnes. Three days ago, I met a delegation of the Indian Sugar Mills Association and the National Federation of Cooperative Sugar Factories and they have not made any demand to raise the buffer stock to 50 lakh tonnes," he said.

The country would have a stock of 300 lakh tonnes in 2006-07 against an annual demand of 190 lakh tonnes, Pawar said, adding prices were bound to be affected if availability was so high. Sugar season runs from October to September.

"Solution has to be found for the current problems faced by the sugar industry. As sugar industry employs a large number of people, we have to help the industry and have to keep the interests of sugarcane farmers," Pawar said.

Pawar said it was time to decide how much sugarcane area the country should have and how much cane should be produced.

"Government cannot do anything in it. Ultimately, prices determine how much crop should be grown," he said.

Replying to a query on prices of essential commodities, Pawar said it was a good sign that inflation was coming down.

"As far as foodgrain production is concerned, there was a demand-supply mismatch in pulses and oilseeds during the last five years while stagnation in wheat output," he said.

Observing that wheat area and production have risen this year, Pawar said, "we have to see how we can bring in more area under wheat cultivation", with the way demand was increasing.

Pawar highlighted that rice-consuming states such as Kerala, Tamil Nadu, Andhra Pradesh, Karnataka and Mizoram were also demanding wheat.

Food habits have changed and purchasing power has increased, he said, adding the government's focus would be to raise productivity and area under cultivation.