Saddled with an 11-million-tonne stockpile of sugar, languishing exports and with expectations of yet another bumper crop in 2001-02 (October-September), the government is considering fresh subsidy measures to boost exports. As part of a special package, the food ministry is looking at a transport subsidy for sugar from the factory to the port. If implemented, this step, which is supposedly within WTO norms, is expected to yield a benefit of Rs 500-600 per tonne for exporters. The government is also proposing to allow the production and export of raw sugar for the first time. Raw sugar has an international market of 27 million tonnes and accounts for 70-80 per cent of the total market. Hitherto Indian mills have been allowed to produce only plantation white sugar, which has a limited world market. Other incentives to cut bulging stocks have been in the works for a while. These include encouraging the use of the by-products of sugar manufacture, such as of bagasse for cogeneration of power – for which amendments to the Sugar Development Fund are in the offing – and of molasses for production of ethanol for use as automobile fuel.
