The Centre is considering a hike in the import duty of sugar from 25 to 40 per cent to prop up domestic prices.
This comes even as farmers’ organisations are demanding restoration of the “release mechanism” for sugar sales to prevent further slide in prices and enable mills to clear cane payment arrears, which have crossed Rs 19,200 crore in the ongoing 2014-15 season (October-September).
Briefing the press following a meeting with representatives of farmers’ bodies here on Wednesday, the Union food minister Ram Vilas Paswan said that he would write a letter to finance minister Arun Jaitley, seeking a 40 per cent import duty on sugar.
The import duty on raw as well as white sugar was raised last from 15 to 25 per cent in August. , as against corresponding levels of Rs 2,700 and Rs 3,100 per quintal, respectively last year.
“We want the release mechanism regulating monthly sales of sugar back. This will help stabilise prices”, said V M Singh, convener of the Rashtriya Kisan Mazdoor Sangathan, which was among the organisations called at the meeting that was also attended by transport minister Nitin Gadkari and petroleum minister Dharmendra Pradhan.
Restoring the release mechanism — under which the Centre fixes how much quantity each mill can sell in the open market every month – would basically set the clock back on sugar decontrol. The previous UPA government had, in April 2013, decontrolled the industry by abolishing both issuing of monthly release orders and also requiring mills to supply 10 per cent of their production as levy sugar at below market price for the public distribution system.
Singh alleged that the current low sugar prices favoured the millers in UP, since they had been allowed to pay only Rs 240 out of the Rs 280 per quintal cane price fixed by the state government. The balance of Rs 40 per quintal would be made available through various fiscal reliefs and paid in case of sugar prices remaining below Rs 3,100 per quintal.
“It suits them well if prices remain at these levels. Bringing back the release orders will help improve prices”, he claimed.
As on March-end, cane payment arrears for the 2014-15 season were estimated at Rs 19,243 crore, which included Rs 9,715 crore in UP, Rs 2,864 crore in Maharashtra, Rs 2,402 crore in Karnataka, Rs 682 crore in Punjab and Rs 656 crore in Tamil Nadu.