Sugar federation demands finance from center.

KOLHAPUR: Maharashtra State Cooperative Sugar Factories' Federation Ltd, the apex body of sugar factories in the state, has sought a financial assistance of Rs 800 per quintal from the Union government as export subsidy to make the Indian produce competitive in the international market.

The federation has also asked the Centre to create a buffer stock of 50 lakh tonnes of sugar in the country so that the factories could have some cash to start the crushing season, its chairman Vijaysingh Mohite-Patil said.

The Union government had created a buffer stock of some 40 lakh tonnes of sugar nearly five years ago when thesector faced similar challenges of dealing with a surplus situation. The sugar in godowns was then identified as buffer stock and the Union government provided some bank guarantee to the stock. The financial assistance had then proved beneficial to make payment to the farmers, Mohite-Patil said.

He told TOI, "The country is going to have some surplus sugar but it cannot be exported because of lower prices in the international market. If we have to sell sugar at a thin margin, the factories cannot offer a good price to the farmers. If some subsidy component is offered to the sugar factories, the sugar in the stock can be exported and the factories can expect income. The amount then can also be passed on to the farmers as well."

On higher subsidy, Mohite-Patil said, "The sugar factories pay close to Rs 4,500 crore every year to the Union and the state governments. Maharashtra is one of the biggest sugar producing states in the country. Hence our contribution to the taxes is also higher. When the sugar factories in the state are facing financial challenge, the Union and the state government should intervene."

He added that that the federation has already contacted the Centre a few weeks ago seeking assistance. Later, a meeting was held with chief minister Prithviraj Chavan seeking his intervention.

A week ago, the state government sent a letter to the Centre asking its intervention in the matter, Mohite-Patil said.

Sanjeev Babar, managing director of the federation, said, "Some traders in the country have imported sugar which has affected the prices in the retail market. The sugar sector is facing financial crisis due to the same reason because market rates are low. The Centre has not put heavy import duty on the sugar, to discourage the trade practice. We were in favour of 60% import duty, but the Centre has set it at 15%."

Source : timesofindia.indiatimes.com