An informal group of ministers, headed by Agriculture Minister Sharad Pawar, is scheduled to meet on December 18 to discuss further incentives for the cash starved sugar industry like reducing time period for re-export of imported sweetener. 

 

In its previous meeting held on December 6, the PM-constituted panel had recommended a slew of incentives for the industry. 

 

The key recommendations included interest free loan to the tune of Rs 7,200 crore for paying cane farmers, loan recasting as per the RBI norms, incentives for production of raw sugar of up to 4 million tonnes and setting up of buffer stock besides doubling ethanol-blending in petrol to 10 per cent.

 

"We are meeting on Wednesday to discuss the bailout package to the sugar industry. An informal group of ministers will discuss other relief measures to sugar mills," Food Minister K V Thomas told PTI. 

 

Due to the WTO constraints, the government cannot provide export subsidy. 

 

"One option we have is reducing the time period for re- export of imported sugar under the advance licensing scheme. The industry has demanded that the time period for re-export of imported sugar be reduced to three months. Is three months sufficient? We need to discuss in detail as we want the sugar refineries to sustain in this country." Thomas said that the government is working on all options to support the industry to make timely payment to farmers.

 

"We will finalise the cabinet note after this meeting," he said. The sugar industry is facing financial problems due to higher cost of production and lower sugar prices in the wake of surplus production in the last few years. It has suffered cash loss that resulted in cane arrear of Rs 3,400 crore from last year. Uttar Pradesh, Maharashtra, Karnataka and Tamil Nadu are the major sugar producing states in the country. Total production is pegged at 24.1 million tonnes in 2013-14 marketing year (October-September), higher than the estimated domestic consumption of 23.5 million tonnes.