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The Tuteja Committee for Restructuring of Sugar Industry has recommended the abolition of release mechanism for free sale sugar with effect from October 1, 2005 while retaining the present system of 10 per cent of the production being collected for levy sugar. However, the Committee is for the present arrangement of payment of Statutory Minimum Price (SMP) to continue along with benefits of price sharing with sugarcane farmers as per the Sugarcane Control Order 1978. The Committee set up by the Food Ministry under the Chairmanship of Shri S.K. Tuteja secretary, Department of Food and Public Distribution in March, 2004 for suggesting measures for revitalization of sugar industry submitted its report to the Minister Shri Sharad Pawar, Minister of Agriculture, Consumer Affairs, Food and Public Distribution here today.
The Committee has also recommended that all loans availed of by the sugar mills (as on March 31, 2004) might be deferred or rescheduled to long term loans payable in 10 to 12 years besides giving a moratorium of both interest and principal for three years starting from 2004-2005. The exact terms of the package might be worked out by NABARD and RBI in consultation with State Governments on a case to case basis taking into consideration the debt service obligations and the capacity of the mills to repay. NABARD has been requested to provide pre -seasonal loans as per their existing norms to sugar factories in Maharashtra and Karnataka.
The Committee has recommended allowing Governments of drought / flood affected states to go for additional open market borrowings to help sugar factories to meet the fixed costs and 75 per cent entitled wages (of 2004-05 and 2005-06 season and arrears of 2003-04 season) of mills which were operational in 2002-03 sugar season but may have to remain closed in 2004-05 and 2005-06 sugar seasons due to non-availability of sugarcane . The State governments could offer this as loan to sugar factories at a rate of interest of 4 per cent per annum. The central govt. may provide interest subsidy to meet the difference between the coupon rate on the bonds raised through additional market borrowings at 4 per cent as was done last year when state governments were allowed the same facility for clearing cane price arrears. .
All eligible cases for restructuring in the sugar industry may be taken under CDR (Corporate Debt Restructuring) scheme. The present minimum principal exposure of Rs.20 crores may be brought down to Rs.10 crores. NCDC (National Cooperative Development Corporation) while acting as a nodal agency may work out a suitable rehabilitation package involving the above steps and also working out required amount of interest subsidy for revival of a sugar factory, in consultation with term lenders, banks and National Federation of Cooperative Sugar Factories; the committee recommends.
The Sugar factories in Uttar Pradesh are recommended to enter into a direct contract with sugarcane growers and execute tri-partite agreements with banks and farmers for procurement of sugarcane and to facilitate use of Kisan Credit Cards. The minimum radial distance, the Committee feels between an existing sugar factory and new factory might be 25 km, against the present 15 km.
The Committee has recommended an major role for Indian Sugar Exim Corporation (ISEC) for regulating the availability of sugar in the country by playing an important role both for import and export of sugar.
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