Centre should convince States to remove impediments ISMA

Indian Sugar Mills Association (ISMA) President A Vellayan says removal of impediments on inter-state movements will directly benefit the sugarcane farmers
Centre should convince States to remove impediments ISMA

Appreciating the Government for taking measures to help sugar industry revive from a major financial crisis, Indian Sugar Mills Association (ISMA) has urged that the State governments should remove impediments on inter-state movements.

“States 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,” A Vellayan said in a statement. “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,” he added.

“On behalf of the Indian sugar industry, we welcome the steps taken by the Centre to help the sugar industry and sugarcane farmers to come out of the current financial crisis,” Vellayan said.

The Centre has recently taken several steps which include adoption of a fixed pricing policy linked to sugarcane price for ethanol procurement which has ensured quicker finalization of offers. Secondly it has removed Central Excise duty on ethanol which has given higher returns to mills/suppliers of around Rs. 5 per litre. The Centre also decided to move to 10 percent ethanol blending with petrol which has increased the demand for fuel ethanol to 266 crore litres.

The Central 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 Fair and Remunerative Price (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,” ISMA said.

The Central government is taking steps to rationalize sugarcane pricing policy. ISMA urged the government to accept 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 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,” ISMA said.

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