A bill seeking to raise the sugar cess ceiling from Rs 25 to Rs 200 per quintal was passed by the Lok Sabha on Tuesday, with the government saying it will help cane-growers who are in crisis as it can facilitate rehabilitation and modernisation of sugar factories.
The Sugar Cess (Amendment) Bill 2015 was passed by a voice vote in the House which was boycotted by Congress over alleged “political vendetta” by the government.
Replying to a brief debate, Food Minister Ram Vilas Paswan said the measure would lead to increase in the accruals to the Sugar Development Fund which facilitates rehabilitation and modernisation of any sugar factory and improving the viability of the mills, thereby helping cane-growers.
Responding to the queries raised by the members, Paswan said the Centre has been making efforts to revive the industry and has been looking into the three players—the farmers, mill owners and consumers.
“We can say that have fixed the (FRP) Fair and Remunerative Price and shirk away from the responsibility. But the Centre cannot do that as we are a welfare state,” he said.
“On our part, the total outstanding in April 2015 to the sugarcane farmers was Rs 21,837 crore of which Uttar Pradesh alone contributed to over Rs 10,000 crore. In November, the figure went down to Rs 5036 crore,” Paswan said.
The minister added that the Centre has taken several measures to help the sugarcane farmers and industry.
“We have increased the export price to Rs 4000 from Rs 3300, but even that is not yielding result because the sugar is produced in the mill for Rs 23-27 and the price globally is Rs 21 whereas we sell it in domestic market for Rs 32.
“Plus, sugarcane is a cash crop. You plant it once and you can reap benefits for it for three years. We have requirement of other crops like pulses, but once farmers start cultivating sugarcane. It is difficult to switch on to other crops,” he said.
The Sugar Cess (Amendment) Bill, 2015 was brought forward as the committed expenditure on account of various interventions to faciliate liquidation of arrears of cane dues necessitates enhancement of the accruals into the Sugar Development Fund from cess, its statement of objects and reasons said.
An enhancement in rate of cess been necessitated to meet the increasing liabilities and finance interventions to ensure timely payments of cane dues to farmers, it said and proposed to increase the ceiling of the cess from Rs 25 to Rs 200 per quintal of sugar. Initially, the Food Minister appealed to the House to pass the Bill without discussion, but opposition to the bill was raised by a BJP member and its ally, the Shiv Sena.
Participating in the debate, Hukum Singh (BJP) said the move would not help the cane growers in any way as the sugar mills, closed down for a long time, have still not been reopened.
“The move is to help the ailing sugar mills, but instead of giving them help, you are taking money from them,” he said.
Vinayak B Raut (Shiv Sena) said collection of more funds by increasing the cess on sugar would go against the interest of the common man, who is already financially overburdened. He wanted the Minister to say by how much the retail price of sugar would rise due to the hike in the cess.
P K Biju (CPI-M) raised the issue of farmers’ suicides, including cane-growers, saying mill owners have not paid Rs 12,000 crore worth of arrears to them over the years.
Pratima Mondal (TMC) referred to problems faced by farmers, saying insurance claims or compensation for damages caused to crops by natural calamities were paid after a long time-lag and thus were not of much help. She also suggested mandatory use of jute bags for packaging of sugar.
Rabindra Kumar Jena (BJD) extended support to the Bill, but said this was just a short term solution and country needs to a macro-economic view on this as more 2.6 million people are directly involved in the sugar industry.
Ravindra Babu Pandula (TDP), K V Reddy (TRS), Kaushalendra Kumar (JD-U) urged the minister to refer the bill to the Standing Committee on Consumer Affairs.
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