Additional aid to sugar units may not take off

NEW DELHI: The recent decision of the Union Cabinet to allow an additional support of Rs 500 per tonne to cover fobbing and marketing cost of sugar to the industry will, in all likelihood, not be implemented in a hurry. And the delay could make the measure virtually ineffective in near future. The decision for additional support was taken in end September and was tailored for WTO compatibility even while placating an angry sugar industry for repeated politically motivated hikes in cane price and an imposition of a Rs 5 per quintal cess in end 2002 towards “drought relief.�
However, industry sources contend that the requisite amendments to the Sugar Development Fund (SDF) rules, an internal matter of the food ministry, will, in fact, “take considerable time� to be effectualised. “That, in our view, will defeat the basic objective of this measure,� ISMA (Indian Sugar Mills Association) sources emphasize, pointing to the mounting pressure on the industry vis a vis cane price. A fair indication that the amendment to the SDF rules would not happen overnight nor the fobbing and marketing support be implemented early was also given by food minister Sharad Yadav. Last month, sugar mills in UP — the state that pays the highest cane price in the country — have aggressively seized an opportunity to ship sugar to the neighbouring Bangladesh market.