Ref. No. 1410/DEL/2021 a 34 August, 2021 SHARAD PAWAR Member of Parliament (Rajya Sabha) Dear Ax hutch y Tam forwarding a letter addressed to you by Shri Jaiprakash Dandegaonkar, President of the National Federation of Cooperative Sugar Factories Ltd (NFCSF). NFCSF is an apex federal body representing all 259 cooperative sugar mills and 9 state cooperative sugar federations across India. Myself and Office Bearers of the Federation would like to have a courtesy call on you on 2, 3x4 or 4th August, 2021, as per your convenience, to discuss issues related to sugar pricing and the ethanol blending program. I will be happy, if you could give appointment on any of the above mentioned dates. With regards, Yours A : mccoy ae (SHARAD PAWAR) | Shri Amit Shah, | Minister of Cooperation, | Government of India, | New Delhi- 110001. te Mumbai. B. Chavan Centre, Gen. J. Bhosale Marg, Mumbai-400 021 + Tel 011-22813017, 22852346 Delhi: 6, Janpath Road, New Deihi-110 O11 » Tel: 011-23018670, 23018619 « Fax : 011-23018600 |NATIONAL FEDERATION OF COOPERATIVE SUGAR FACTORIES LTD. Wy Ween weexw orearn wa fares LZ ‘Ansal Plaza. Biock-C, 2nd Floor. August Kranti Marg, New Delhi - 110049 (India) MD-22/ 03/08/2021 ‘Shri Amit Shah Hon'ble Union Minister of Cooperation Ministry of Cooperation NEW DELHI ‘SUB. :URGENT ISSUES CONFRONTING THE COOPERATIVE SUGAR SECTOR Respected Sir, Please accept our heatiest congratulations for being appointed as India's first Minister of Cooperation. INTRODUCTION We, the National Federation of Cooperative Sugar Factories Ltd.[NFCSF] is the apex federal body representing all the 259 cooperative sugar mills & all the 9 State cooperative sugar federations across India. Thus, NECSF represents almost 2.5 crore sugarcane growers, majority of them being small & marginal farmers having average land holdings of 1-1.5 hectares. The cooperative sector Collectively, contributes about 45% of country’s annual Sugar & Ethanol production & annually contributes about Rs. 6000 crores revenue to the Government's exchequer by way of GST and other taxes. It is noteworthy that the cane arrears of cooperative sugar mills is hardly 5% during the current year. The distilleries attached to the cooperative mills are playing a promising role in GOI’s mission of achieving Ethanol Blending targets of 8.5% by 2021, 10% by 2022 & 20% by 2023. It is a matter of pride that the sugar mills have proactively responded to National Call of manufacturing Oxygen amidst the current Covid pandemic COUNTRY’S CURRENT SUGAR SCENARIO As you are aware, India has been a structurally excess sugar producer with annual Sugar production in excess of 30 Million Tons against stagnated annual domestic Consumption of 25-25.5 Million Tons. GOI's efforts to curtail inventory levels by way of encouraging sugar exports & subsuming excess sugar in Ethanol are paying dividends, but the sector as a whole & cooperative sugar mills in particular continue to reel under financial stress, which, if not contained in time, may explode in the form of mills permanently pulling down shutters & millions of farmers facing unprecedent anxiety & stress for their very survival EPABX: +91-11-26263425, 26263426, 26263696, 26263849, Direct(MD): +91-11-26263697 Fax: +91-11-26263658 E-mail: nfesind@gmail.com, Website: www.coopsugar.orgNATIONAL FEDERATION OF COOPERATIVE SUGAR FACTORIES LTD. wef weer weer ora de fates Ansal Plaza, Block-C, 2nd Floor. August Kranti Marg, New Delhi - 110049 (India) URGENT ISSUES Though there are numerous issues confronting the sugar sector, we are flagging only two most emergent & severe issues here below for your kind attention & resolving :- 1] SUGAR MINIMUM SELLING PRICE [MSP] GOI, in 2018 had taken a historical decision of notifying sugar MSP & linking it’s revision with Sugarcane price [FRP]. In 2019, MSP was rightly & automatically raised from Rs. 29 / kg to Rs. 31 / kg. in line with upward revision in FRP. But, since last 2 % years, the MSP has not been revised despite rise in FRP. We insist that Sugar MSP should invariably be linked with Sugarcane FRP. 1.4] The current Average production cost of sugar is in the vicinity of Rs 36 / kg. 1.2] The recommendation of Revenue Sharing Formula by High Power Committee headed by Dr. C. Rangarajan has been accepted by GOI according to which if 70% & 75% of revenue is to be paid as cane price, the sugar MSP logically cannot be below Rs. 37.50/ kg. 1.3] GOI's National Sugar Institute [NSI] , Kanpur issues Indian sugar Standards viz. S{Small], M [Medium] and L [Large] based on grain size. Traditionally there is a market premium of Rs. 1.5 / kg for bigger grain sized sugar. However, declaring uniform MSP for all grades has totally disturbed the market. Hence, differential grade-wise pricing is requested to remove the current anomaly & bring about level playing field. 1.4] Upward revision in MSP will immediately raise the valuation of sugar stock in the godowns helping cash liquidity of ailing sugar mills, which will help them clear sugarcane arrears of farmers. 1.5] MSP revision does not put any financial burden on GOI. EPABX: +91-11-26263425, 26263426, 26263696, 26263849, Direct(MD): +91-11-26263697 Fax: #91-11-26263658 E-mail: nfcsfnd@gmail.com, Website: www. coopsugar.orgNATIONAL FEDERATION OF COOPERATIVE SUGAR FACTORIES LTD. egg — wei wee weer orearn da fafies ‘Ansal Plaza, Block-C, 2nd Floor. August Kranti Marg, New Delhi - 110049 (India) -a- 2] ETHANOL BLENDING PROGRAM The “National Biofuel Policy - 2018" has been a feather in GOI's cap. It's smooth implementation & regular monitoring jointly done by DFPD, MoP&NG & DFS holds @ promising picture for not only the ailing sugar & grain sector, but also for the Country to improve environment & save precious foreign exchange outgo by curtailing crude oil imports. 2.1] GOr's brain child of Tripartite Agreement [TPA] between Ethanol suppliers, OMC’s & banks has not been a success for Cooperative sugar distilleries due to their unhealthy balance sheets. As a result only 88 out of 422 proposals have been funded by banks in which share of cooperatives is negligible. To come over this major road block, we suggest to permit establishing an independent “Ethanol Manufacturing Unit’ within the premises of present cooperative Sugar mill. Banks will have a comfort level to enter into TPA with these independent Business Units based on their future estimated revenue on supplying committed Ethanol to OMC's who can release payments, in ESCROW account from where banks can collect their loan amount 2.2] To reduce bulging sugar inventories, the projects producing Ethanol directly from unsold sugar and projects of mixing 15-20% sugar in molasses to produce Ethanol needs to be encouraged & be given higher selling prices of such Ethanol to enable these projects to be economically viable We trust these issues would be favorably considered & resolved at the earliest. Thanking you in anticipation. Yours faithfully, a = (JAIPRAKAS! cai PRESIDENT EPABX: +91-11-26263425, 26263426, 26263696, 26263849, Direct(MD): +91-11-26263697 Fax; +91-11-26263658 E-mail: nfesind@gmail.com, Website: www.coopsugar org