Chennai: The central government has decided to issue release orders for free sale sugar for those factories that have imported raw sugar under the 'advance license scheme' and have export obligations to fulfill. Such factories will also be exempted from the levy obligation of 10 per cent of their total production.

Announcing this while inaugurating the 46th annual meeting of the general body of the National Federation of Cooperative Sugar Factories Limited (NFCSF) Sharad Pawar, minister of agriculture, consumer affairs, food and public distribution, said that on imports after October 1, 2005 the export obligation will be on 'grain-to-grain' basis.

"This decision has been taken keeping in mind the better production prospects next season (2005-06) and also the fact that about 24-lakh ton of raw sugar had already been imported so far. The facility of export obligation on raw sugar import on the advance license scheme has so far been on a 'ton-to-ton' basis and not on 'grain-to-grain' basis till October 1, 2005."

Referring to the financial package being worked out for the sugar industry by the government, Pawar said that NABARD has mooted proposals amounting to Rs250 crore for the entire country related to rescheduling of loans and reducing interest rates for loans to sugar industry. The rules for restructuring the 'sugar development fund loans' for potentially viable sick sugar mills is also under the consideration of his ministry and a decision will be taken soon.

According to him the ministry will be issuing sanctions of claims for ocean freight neutralisation and marketing / handling charges for export of sugar from next week. As regards revision of levy sugar price, Pawar said that a decision would be taken shortly.

Referring to the demand by the Indian Sugar Mills Association (ISMA) and NFCSF on the abolition of sugar release mechanism, Pawar pointed out that, "unless and until we are able to sustain sugar prices and bring it around Rs1,600 per quintal, the system should continue". It should certainly be there at least for the coming one or two years, he added.

Sugar production during 2005-06 is expected to be about 180-lakh ton against 130-lakh ton in 2004-05 and 140-lakh ton in 2003-04. The government had managed to meet the demand for sugar for indigenous consumption without import of white sugar by taking timely decision to allow imports of raw sugar, Pawar pointed out.

However, he expressed concern on the low level of investment in the agriculture sector and called for higher investment to save the farmers from the vagaries of monsoon for agriculture operations including sugarcane cultivation. The total money invested in the agricultural sector during the last seven years is not more than 2.5 per cent of the budget as against 16 per cent investment in the telecom sector. Similarly, sufficient investment should be made in the irrigation sector as the total money given to irrigation was only 0.35 per cent of the budget, he said.

He also distributed awards to winners of efficiency in sugar sector in categories of technical efficiency, cane development, financial management and best cooperative sugar factory for the year 2004-05.