Government may allow production of ethanol from sugarcane, says Pawar

Mumbai: The government is considering a proposal to allow sugar mills to directly produce ethanol from sugarcane juice to help mills and farmers cope up with falling prices following record output, agriculture minister Sharad Pawar said.

He said the government is in the process of evaluating the Sugarcane Control Order and any change in sugar policy would require an amendment to the order.

The government, he said, may also increase monetary support to the industry, with a condition that mills would clear dues to the farmers.

He said a group of ministers has taken a few decisions on excise duty exemption to sugar mills and he would soon seek cabinet approval for it.

"We would take it to the cabinet in the next 8-10 days," Pawar said.

Pawar said the GOM on sugar has recommended allowing ethanol production from secondary sugarcane juice.

"The GOM has recommended production of up to five per cent now and 10 per cent after October 2008. But, ultimately, it will have to be discussed with the petroleum ministry and oil marketing firms, because they are the only buyers in the country," he said.

The GOM had recommended a price of Rs21.50 per litre for ethanol, Pawar said, adding that cane production this year has gone up by 10 per cent.

The government has more than doubled sugar reserves to 50 lakh tonnes and has given subsidies to exporters in a bid to prevent prices from falling further.