EC ACT AMENDMENT TO STRENGTHEN SUGAR
RELEASE MECHANISM
The Essential Commodities
(Amendment) Bill, 2003 was passed by Rajya Sabha today paving
the way for strengthening the Regulatoed Release mechanism for
supply of free sale sugar. Shri Sharad Yadav, Minister of Consumer
Affairs, Food and Public Distribution, assured the House that
all steps would be taken to protect the interest of sugarcane
farmers and sugar consumers under the provisions of Act.
The Central Government
has been regulating the supply of free sale sugar under the monthly
'Regulated Release' Mechanism to ensure availability of sugar
throughout the year at reasonable level. However, this was challenged
in the courts which led to difficulties in its operation and resulting
in decline in sugar prices which affected the capacity of sugar
mills to pay cane price to sugarcane growers. In order to safeguard
the interest of sugarcane growers, sugar mills and general public
and to restabilise the market prices of sugar, the central government
introduced the Essential Commodities (Amendment) Bill, 2003 to
further amend the Essential Commodities Act, 1955 in the Rajya
Sabha on 13th March 2003.
The Government has taken a number of steps to mitigate the hardship
of sugarcane growers and help the sugar industry in the recent
months. These include the creation of a buffer stock of 20 lakh
tonnes of sugar w.e.f. December 18, 2002 involving an outgo of
Rs. 412 crore from the Sugar Development Fund. An additional amount
of Rs.374 crore would be released by banks on account of the sugar
buffer stock. Thus, Rs.786 crore will be used exclusively for
payment of cane price dues to sugarcane growers for which the
required legal rules are already in place.
The Statutory Minimum Price of sugarcane has been refixed at Rs.69.5
per quintal increasing Rs.5 per quintal linked to a basic recovery
of 8.5 per cent subject to a premium of Rs.0.82 for every 0.1
per cent point above that level for 2002-03 season. With effect
from June 2002 sugar factories have been allowed to claim reimbursement
of internal transport incurred on export shipment of sugar. It
has been also decided w.e.f. February 14, 2003 to neutralise ocean
freight disadvantage @ Rs.350 per tonne on account of export shipments
of sugar. The production of sugar has been consistently high for
the last four sugar seasons which has resulted in the industry
having to carry increasingly large stock of sugar. As on October
31, 2002 the carry over stocks from the year 2001-02 sugar season
stood around 102 lakh tonnes.
