States to form panels to view Ranga panel report: Thomas

The government on Friday said it will consider giving interest-free loans to millers to help them pay arrears to cane-growers. Speaking about the development, Union food minister KV Thomas said states will form committees to take into account the Rangarajan Committee report, which recommended deregulation of the sugar sector by giving freedom to mills to sell sugar in the open market.

Thomas said the decision was taken in an informal GoM, where the ministers analysed the needs highlighted by ISMA — a body representing sugar mills. ISMA, which had rejected the government's offer to set up a panel to look into linking cane and sugar prices, welcomed the bailout package.

Also, Thomas said that government has been very liberal. There is no release mechanism with sugar mills. "In case of public distribution system (PDS) also we have liberalised everything. There is no levied sugar now. Only thing is our production is quite comfortable. It is estimated this coming sugar season it will be about Rs 253 lakh tonne. Last year also was quite same," he added. According to the industry, at Rs 236 per quintal, UP mills have the highest cost of production globally. It claims to have lost around Rs 3,000 crore in 2012-13. The UP mills have incurred losses in 3 out of last 4 years. The sugar industry has been lobbying for an immediate review on current cane pricing and demanded that the UP government introduce the revenue sharing model suggested by the Rangarajan committee.

Sugarcane crushing was delayed this year because farmers wanted the UP government to raise prices to to compensate for input costs. Crushing season usually begins on November 1. The government also said it will offer additional incentives to millers encourage them to produce raw sugar for export.