Id: 3 Name: Media Release Delhi Venue: Date: 10 Mar 2011 Event Pdf: MEDIA RELEASE NEW DELHI – 10th March, 2011 – The Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd. (NFCSF) are the two apex organizations of the sugar industry, representing almost 95% of the sugar mills in the country. The sugar industry is the largest agro-processing sector in the country. Sugarcane is bought directly from farmers without any middlemen. In the last sugar season 2009-10, approximately Rs 45,000 crores was paid to farmers as cane price. This year it is expected to rise to about Rs 51,000 crores. However the sector unfortunately continues to suffer the burden of excessive controls and regulation far in excess of those imposed on any other sector of agriculture or industry. Sugar is the sole commodity in the country which can be sold by the producers only as per monthly instructions (release orders) given by the Government of India. There is no other commodity which is put under such controls and restrictions. The regulated release mechanism distorts plans of sugar mills to decide on their sales, supply and cash flows. The basic objective behind the monthly regulated release mechanism to control sugar prices has never worked and has, in fact, not only distorted the sugarcane and sugar economy but has also put unnecessary financial burden of huge stocks on the sugar mills which only increases their cost of production. We are simply seeking the same freedom to sell our product which every other industry in this country enjoys. Since January, almost all the sugar mills have been selling sugar at a price below the cost of production and are incurring losses. This is unfortunate since there is an opportunity to export surplus sugar to the international market which offers almost about Rs. 500 per qtl. premium over the domestic price. This is probably the first season ever for the Indian sugar industry when the international prices are viable even while there is surplus sugar in the country. Therefore, considering the huge surplus, sugar mills could be benefited by way of exports of almost 15 lakh tons. This would not only ensure better and timely payment to the farmers but also ensure that the country does not carry forward unnecessary high sugar stocks in 2011-12 which is again expected to be a surplus year and the international prices may not be as good for Indian exports as they are today. It is pertinent to point out that even in past periods of shortage, the industry has shouldered the responsibility of importing and refining raw sugar to meet the supply gap in the country. This is unlike the experience of most other Asian countries where the government has had to step in directly incurring substantial costs. Sugar industry is the only industry in the country which is made to bear the financial burden of a social welfare programme. We are required to supply levy sugar at a discounted price for the Public Distribution System. As compared to an ex-factory sugar price of Rs. 2800 per qtl. at present, the levy sugar price offered by the Government is only Rs. 1850 per qtl. The Government should immediately adopt a similar policy of procuring sugar from the market directly for the Public Distribution System like it does for other commodities viz. wheat, rice, pulses, kerosene etc. This will be only fair to the sugar industry and put them at par with all the other industries in the country. Sugar production this year is expected to be 250 lakh tons and there will be a surplus of almost 30 lakh tons since estimated consumption, given sales so far, should be less than 220 lakh tons. The future investment climate is bleak given the absence of freedom to operate freely. A freer sugar industry in India will certainly attract substantial investment from within the country as well as abroad in not only in sugar mills but also in the sugarcane production by way of research and development and improved seed varieties. The sugar industry as well as farmers will certainly be benefited greatly. Finally we have voluntarily offered to share the revenue from all primary products of sugarcane with the farmers. This will further ensure that the benefits of liberalisation in this sector flow directly to farmers. About ISMA Indian Sugar Mills Association (ISMA), the oldest industrial association in the country was established in 1932. It is recognized by the Central and State Governments as the Central Apex Organization to voice the cause of the sugar industry. Sugar mills in the private sector as well as the public sector are eligible to become members of ISMA. Its total strength of membership as on date stands at 213 and accounts for about 55% of country’s total sugar production. ISMA’s history is thus synonymous to the growth of the sugar industry in India which also began in early 1930s. It is an Apex organization and maintains close contact with all regions in India through a network of regional associations and with international organizations and associations through international bodies. ISMA is the interface between the industry and Government on matters relating to sugar policy, statistics on production, sales, exports/ imports, prices etc. ISMA maintains database for the sugar industry which is shared with all the member factories, media and also various Government organizations. India entered the sugar export market for the first time in the year 1957 which was entirely the initiative of ISMA. ISMA’s R&D Cell on sugarcane has successfully identified promising sugarcane varieties in improving sugarcane productivity which received recognition from various research institutions and Government organization etc. The results have been significant in the recent two years. ISMA interacts closely with International Industry Associations including International Sugar Organization, World Sugar Research Organization, World Association of Beet and Cane Growers and Global Alliance for Sugar Trade Reforms and Liberalization. India is largest consumer of sugar and 2nd largest producer in the world. About NFCSF National Federation of Cooperative Sugar Factories Limited Established in 1960 as an apex organization of all cooperative sugar factories in India, the National Federation of Cooperative Sugar Factories Ltd. (NFCSF) has been a motive force in all round development of cooperative sugar factories in India. Services of NFCSF include taking up the problems of member factories with the Government of India and other Central Authorities for their logical solution, assisting them in obtaining term loans from Sugar Development Fund for sugar development and factory modernization and other financial consortium for expansion-cum-modernisation /optimization and setting up new sugar mills. NFCSF also helps by preparing economically viable and co-product oriented feasibility reports for projects, maintaining and updating statistical information regarding sugarcane and allied products, bringing out publications for propagation of information regarding national and international sugar policies and scenario. The technical and promotional cell of NFCSF comprising men of national and international experience in various disciplines of sugar industry have established many new sugar factories, helped existing cooperative sugar factories in successful implementation of their expansion programme in India and have also undertaken sugar projects abroad. The Federation is on the forefront in promotion of bagasse based co-generation and ethanol projects. NFCSF has also set up a Research, Development and Training Centre for progressive development of the industry. For further information Pl. contact Shri Sanjay Banerjee Tel. 9811071567 e-mail : sanjay@indiansugar.com Mdrl1/m