New Delhi: Maharashtra Chief Minister Devendra Fadnavis on Saturday met Union Food Minister Ram Vilas Paswan and sought extension of subsidy on raw sugar exports and hike in import duty on the sweetener to 40 percent to help cash-starved mills clear cane arrears to farmers.
"Met with a delegation led by the Maharashtra Chief Minister. We discussed on issues marring the sugar industry," Paswan told PTI after the meeting.
The Food Minister assured the delegation that the Centre would take steps in the interest of both the farmers as well as the industry. "The suggestions given are for long and short term implementation. Whatever be the best possible solution, it will be taken," he said.
Amid surplus sugar stocks depressing local prices, the delegation led by the Maharashtra Chief Minister demanded curbs on inward shipments of sugar by raising import duty to 40 percent from the existing 25 percent, said a senior Food Ministry official present at the meeting.
To encourage exports, he sought extension of export subsidy scheme on raw sugar for the 2014-15 season (October-September), which the Centre is considering actively, he added.
Last year, the Centre had announced a subsidy on export of raw sugar up to 4 million tonnes in order to help the cash-starved industry pay sugarcane arrears to farmers. The subsidy scheme ended in September 2014.
Besides, the Maharashtra government has sought interest-free loans, restructuring of term financing of sugar mills and providing interest-free bridge loans from the Sugar Development Fund.
The state government has also demanded creation of buffer stock of 50 lakh tonnes of sugar at factory level in the state and increase mandatory ethanol blending with petrol from the current 5 percent to 10 percent.
State BJP President Raosaheb Patil Danve, Maharashtra Cooperative Minister Chandrakant Patil, Leader of Opposition in the state Dhananjay Munde and three MPs -- Vijaysinh Mohite Patil, Sanjay Kaka Patil and Raju Shetty -- were part of the delegation.
The sugar industry is seeking extension of the export subsidy for this year as mills are facing liquidity crunch to make cane payment in the wake of depressed local prices due to higher production in the last few years.
Sugar production in India -- the world's second biggest producer after Brazil -- has increased by 27.3 percent to 7.46 million tonnes in the first three months of the current 2014-15 season, according to the Indian Sugar Mills Association (ISMA).
The ISMA estimates sugar production at 25-25.5 million tonnes for this season, while the government's projection is 25.05 million tonnes for the same period.
During the 2013-14 season, the country had produced 24.4 million tonnes sugar and exported 2.11 million tonnes.