Industry Body Seeks Linkage of Cane, Sugar Prices in Northern States

Indian Sugar Mills Association (ISMA) on Tuesday demanded that the Centre should convince northern states like Uttar Pradesh to link sugarcane rates with sugar prices for ensuring survival of the industry.

Although Ajit Shriram, president of sugar industry body ISMA, hailed the Centre's decision to give extra interest free loan for clearing cane arrears, he also said linkage between cane and sugar prices is a must for survival of mills.

"We would continue to submit to the government for an immediate policy reform i.e. adoption of linkage formula for determining the cane price at 70 per cent of the sugar price and its by-products. The industry needs it for the benefit of all stakeholders' i.e farmers, millers & consumers," Mr Shriram said.

This formula has been adopted by many of the western and southern states in the country, including two major producers Maharashtra and Karnataka. Gujarat, too, follows a similar kind of system, he noted.

"We would urge the Central Government to convince other State governments, especially in North India to adopt the linkage formula. This will ensure survival of the industry and at the same time zero cane price arrears to the farmers."

He also said the steps taken by the Centre on Monday would help the sugar industry to clear the cane price arrears of the farmers.

In order to bail out the Rs 80,000-crore sugar industry, the Centre had decided to provide an additional up to Rs 4,400 crore interest-free loans, hike import duty on sugar to 40 per cent from 15 per cent and extend export subsidy till September this year.

Efforts would also be made to implement the mandatory 5 per cent ethanol blending with petrol and subsequently raise it to 10 per cent level.

"These steps will go a long way to help the industry to improve its liquidity which will directly result in payment of arrears of the farmers," he added.