Lok Sabha Question No. 2685 (UNSTARRED), answered on 2015-12-15
Subject: Assistance for Sugar Mills
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: YOGI ADITYANATH, RAJESH VERMA, PONNUSAMY VENUGOPAL

## GOVERNMENT OF INDIA

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA

UNSTARRED QUESTION NO. 2685

TO BE ANSWERED ON 15 TH   DECEMBER, 2015

## ASSISTANCE FOR SUGAR MILLS

2685. SHRI YOGI ADITYA NATH:

SHRI RAJESH VERMA: DR. P. VENUGOPAL:

Will  the  Minister  of  CONSUMER  AFFAIRS,  FOOD  AND  PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether  the  financial  position  of  the  sugar  industry  has  been stressed by sustained surpluses of production over domestic consumption and mismatch between the production cost and sale price of sugar during the last three years, if so, the details thereof and the facts in this regard;
- (b) whether the Government has received request from the industry for increasing ethanol production, providing export subsidy and bulk purchase of sugar to infuse liquidity in the sector, if so, the details thereof and the response of the Government thereto;
- (c) whether the Government has given any incentives to sugar sector to facilitate payment of sugarcane dues to farmers during 2014 and 2015, if so, the details thereof; and
- (d) the  details  of  other  measures  and  steps  taken  by  the  Government for  the  welfare  of  sugarcane  farmers  and  sugar  industry  in  the  recent past?

## A N S W E R

MINISTER OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI RAM VILAS PASWAN)

- (a): The domestic production of sugar has consistently exceeded demand since  2010-11,  leading  to  build-up  of  stocks  and  downward  pressure  on prices.  Substantial  inventories  with  the  sugar  mills  have  resulted  in subdued prices and adversely affected their liquidity position. The all India average cost of production of white sugar is about Rs. 2900 per quintal, whereas the average all India ex-mill price of sugar during last two sugar seasons has been below that price. The details of domestic production and consumption  of  sugar  and  its  average  all  India  ex-mill  price  during  last three sugar seasons are annexed.

- (b): Representations have been received from apex bodies of the sugar industry  inter-alia  seeking  subsidy  for  increasing  ethanol  production; subsidy for export of sugar and creation of buffer stock. The Government has extended incentive for export of raw sugar for the sugar season 201415 and waived excise duty on ethanol supplied to Oil Marketing Companies (OMCs)  by  sugar  mills  under  Ethanol  Blending  Programme  (EBP).  The request for creation of buffer stocks has not been found to be supportable.
- (c): During  2014  and  2015,  the    Central  Government,    with  a  view  to facilitate clearance of cane price arrears of sugarcane farmers,  has given several incentives to  sugar industry to help it resolve liquidity problems and  expeditiously  clear  cane  price  dues  of  farmers.  The  incentives extended by the Government are as under:-
- i) Provided  working  capital  loans  with  interest  subvention  to  sugar mills  to  facilitate  clearance  of  cane  price  dues  of  farmers  under Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU-2014) and Soft Loan scheme.
- ii) Incentive  for  exporting  raw  sugar  in  sugar  seasons  2013-14  and 2014-15.
- iii)   Fixed  remunerative  prices  for  supplies  of  ethanol  to  OMCs  for blending with petrol; waiver of excise duty on ethanol supplies to OMCs during 2015-16.
- iv)   Notified a scheme on 2.12.2015 to extend production subsidy @ Rs. 4.50  per  quintal  to  sugar  mills  to  offset  the  cost  of  cane  and
- facilitate timely payment of cane price dues of farmers.
- (d): Besides extending the incentives referred in reply to part c) above, the Government has taken following additional measures for the welfare of sugarcane farmers and sugar industry:
- i)   Enhanced import duty to 40% to discourage imports.
- ii)  The  'Duty  Free  Import  Authorization'  scheme  (DFIA),  for  sugar withdrawn.
- iii)  The period for discharging Export Obligations under the Advanced Authorization  Scheme  for  sugar  reduced  to  6  months  to  prevent leakage into the domestic economy.
- iv) Scaled up blending targets under Ethanol Blending Programme from 5% to 10%.

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ANNEXURE ANNEXURE  REFERRED  IN  REPLY  TO  PART  (a)  OF  THE  UN-STARRED QUESTION  NO.  2685  DUE  FOR  ANSWER  ON  15.12.2015  IN  THE  LOK SABHA Statement  indicating  Domestic  sugar  production;  consumption  and  all India average ex-mill price of sugar during last three sugar seasons.

| Sugar season (October- September)   | Sugar production (In Lac MTs)   |   Sugar Consumption (In Lac MTs) |   Ex-Mill Average sugar price (Rs. per quintal) |
|-------------------------------------|---------------------------------|----------------------------------|-------------------------------------------------|
| 2012-13                             | 251.83                          |                              230 |                                            3072 |
| 2013-14                             | 245.54 (provisional)            |                              243 |                                            2892 |
| 2014-15                             | 284.63 (provisional)            |                              256 |                                            2447 |

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