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Directorate of Sugar & Vegetable Oils (DS&VO)

OBJECTIVE:

The Directorate of Sugar & Vegetable Oils is an attached office under the Department of Food & Public Distribution. The present Directorate was constituted in August, 2014 by merging the two erstwhile Directorates of Sugar and Directorate of Vanaspati, Vegetable Oils and Fats.

Directorate of Sugar & Vegetable Oils is responsible for implementation of policies regarding relating to sugar and edible oil sectors, particularly the availability of sugar and edible oils and monitoring of their prices.

DS&VO maintains data relating to production, distribution and consumption of sugar. Besides, the Directorate provides technical inputs for formulation of policies relating to sugar sector. It is also entrusted with the task of fixation of factory-wise Fair and Remunerative Price (FRP) of sugarcane payable by sugar mills to the sugarcane growers, maintenance of data relating to cane price payment position, development and regulation of sugar industry and supply of sugar under public distribution system (PDS). Further, Cabinet Secretariat which vide notification dated 02.11.2018 has amended the Allocation of Business (AoB) Rules, 1961 as per which the subjects molasses; alcohol-industrial and potable from the molasses route; and Stand-alone distilleries have been allocated to DFPD and are being handled in DS&VO. This Directorate also assists the Department in management of edible oils sector.

FUNCTIONS:

In pursuit of mandated objectives, the core activities/functions of the Directorate of Sugar & Vegetable Oils are the following:-

·Assessment of the Domestic supply - demand situation, international trends, price situation and export / import policy adjustments.

·Fixation of Factory-wise Fair and Remunerative Price (FRP) for sugarcane and its enforcement through States / UTs.

·Enforcement of minimum distance criteria for establishing new sugar mills

·Cane area reservation issues requiring Government of India’s intervention.

·Administration of subsidy for PDS distribution of sugar by States/ UTs.

·Fixation/finalisation of old levy price fixation and margins of retailers and whole sellers

·Interface with ISRO regarding production forecast

·Industrial Entrepreneurs’ Memorandum (IEM) related matters for establishing of new sugar factory

·Monitoring of domestic wholesale, retail and international prices of edible oils on a daily basis.

·Recommending policy intervention required for maintaining sufficient availability of edible oils at reasonable prices.

·Providing inputs on matters related to edible oils and oilseeds.

·Registering of edible oil manufacturing units under the Vegetable Oil Products Production and Availability (Regulation) Order 2011 and issuing Registration Certificate.

·Operationalisation and maintenance of P-II, a web based on line monitoring system for data on sugar production/dispatch/export and production of ethanol from B-heavy molasses

·Compilation of weekly sugar production data.

·Preparation of weekly provisional report on production, dispatches, stock etc. of sugar.

·Compilation of annual data on cane crushed, production of sugar etc.

·Compilation of data on estimates of production in the ensuing sugar season furnished by State Govt./Individual sugar mills.

·Preparation of fortnightly reports on cane price payable, cane price paid and cane price arrears based on the information received from the State Govt. /sugar mills for each fortnight.

·Allotment of Code No. and Short name to the sugar mills.

·Fixation of norms/review of International Agreements relating to sugar.

·Matters relating to payment of Annual contribution for Membership to ISO.

·Keeping record of pending levy obligation of sugar mill and court case in this regard.

·Matters relating to Administration of Levy Sugar Supply (Control) Order, 1979 and Sugar Price (Control) Order, 2018 and imposition of stock holding limits of sugar mills.

SCHEMES BEING IMPLEMENTED BY DS&VO

Various interventions taken by the Government in the form of executive schemes are being implemented/administered by DS&VO. Brief details of such schemes are as under :-

1.REVIEW OF EXISTING SYSTEM FOR DISTRIBUTION OF SUGAR THROUGH PDSTO ANTYODAYA ANNA YOJANA (AAY) FAMILIES

Sugar was being distributed through the Targeted Public Distribution System (TPDS) by the States/UTs at subsidized prices for which the Central Government was reimbursing them @ 18.50 per kg. The scheme was covering all BPL population of the country as per 2001 census and all the population of the North Eastern States / special category/ hilly states and Island territories.

The National Food Security Act, 2013 (NFSA) is now being universally implemented by all 36 States/UTs. Under the NFSA, there is no identified category of BPL; however, the Antyodaya Anna Yojana (AAY) beneficiaries are clearly identified. As such, with a view to give access to consumption of sugar as a source of energy in diet for the poorest of the poor section of the society i.e. AAY families, it has been decided to continue with the existing scheme of supply of subsidized sugar through PDS for restricted coverage of AAY families for providing 1 kg of sugar per AAY family per month. Besides, the Government has continued with the current level of subsidy at Rs. 18.50 per kg for reimbursing the participating States/UTs for distribution of sugar through PDS.

16 States/UTs are participating in the revised scheme and 5 more states are likely to participate in the current financial year 2019-20.

2.SCHEME FOR ASSISTANCE TO SUGAR MILLS FOR SUGAR SEASON 2017-18.

Government has notified the scheme "Assistance to sugar mills” under which financial assistance @Rs.5.50/quintal of cane crushed is being provided to sugar mills to offset the cost of cane amounting to about Rs.1540 crore. The assistance is to be used for payment of cane price dues of the current sugar season 2017-18 and arrears of previous sugar seasons. The assistance is to be paid directly to the farmers on behalf of the mills and adjusted against the cane price dues payable to the farmers including arrears. Subsequent balance if any, shall be credited into mill's account.

3.SCHEME FOR ASSISTANCE TO SUGAR MILLS FOR SUGAR SEASON 2018-19.

In order to help sugar mills to clear cane dues of farmers, the Government on 5.10.2018 has notified a scheme to provide financial assistance @ of Rs. 13.88 per quintal of cane crushed in sugar season 2018-19 to sugar mills to offset the cost of cane. The total expenditure on this account would be about Rs.4163 cr. which will be borne by Government.To ensure payment of sugarcane dues of farmers, the assistance would be credited directly into the accounts of farmers on behalf of sugar mills against cane price dues payable to farmers against FRP including arrears relating to previous years and subsequent balance, if any, would be credited to mill’s account.

4.EXTENDING SOFT LOANS TO SUGAR MILLS TO CLEAR THEIR CANE PRICE DUES.

The Government has also notified a soft loan scheme on 02.03.2019 for extending loans amounting to Rs 10540 crore to sugar mills through banks for which Government would bear interest subvention of about Rs 738 crore @ 7% for one year. As per the scheme, loans which are sanctioned and disbursed by 31.5.2019 would be eligible for interest subvention.

5.NEW SCHEME FOR EXTENDING FINANCIAL ASSISTANCE TO SUGAR MILLS FOR ENHANCEMENT AND AUGMENTATION OF ETHANOL PRODUCTION CAPACITY.

The Government has notified a new scheme on 08.03.2019 for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity. Under the scheme Government would bear Rs.2790 crore towards interest subvention for extending indicative loan amount of Rs.12900 crore by banks to the sugar mills for augmentation of ethanol producing capacity.

6.SCHEME FOR EXTENDING FINANCIAL ASSISTANCE TO MOLASSES BASED STAND-ALONE DISTILLERIES.

The Government has notified a scheme on 08.03.2019 for extending financial assistance to molasses based stand-alone distilleries. Under the scheme, Government would bear Rs.565 crore towards interest subvention for extending indicative loan amount of Rs.2600 crore by banks to the molasses based standalone distilleries to augment their ethanol production capacity.

7.SCHEME FOR CREATION AND MAINTENANCE OF BUFFER STOCK, 2018

In order to maintain demand supply balance in the domestic market and to stabilize sugar prices thereby improving liquidity of sugar mills enabling them to clear cane price arrears of farmers, Government has created a buffer stock of 30 LMT of sugar for one year w.e.f. 01.07.2018. The Government is reimbursing carrying cost of Rs 1175 cr to sugar mills for maintaining such buffer stock. The subsidy is credited to a no-lien bank account opened by the sugar mill. From this no-lien account, banks shall directly remit the funds into the accounts of farmers on behalf of sugar mills against cane price arrears and subsequent balance, if any, would be credited to mills’ account.

8.SCHEME FOR EXTENDING FINANCIAL ASSISTANCE TO SUGAR MILLS FOR AUGMENTATION OF ETHANOL PRODUCTION CAPACITY, 2018

In order to augment ethanol production capacity and thereby also allow diversion of sugar for production of ethanol, in principal approval has been granted for extension of soft loan of Rs. 6139 crores through banks to the mills for setting up new distilleries/ expansion of existing distilleries and installation of incineration boilers or installation of any method as approved by Central Pollution Control Board for Zero Liquid Discharge for which Government will bear interest subvention of Rs. 1332 crore. About 114 sugar mills are likely to be benefitted as a result of this measure and ethanol production capacity of sugar mills in the country is likely to be enhanced by about 200 crore litres per annum in the coming 3 years.

9.SCHEME FOR DEFRAYING EXPENDITURE TOWARDS INTERNAL TRANSPORT, FREIGHT, HANDLING AND OTHER CHARGES TO FACILITATE EXPORT DURING THE SUGAR SEASON 2018-19

Government on 5.10.2018 has notified a scheme for extending assistance to sugar mills by defraying expenditure towards internal transport, freight, handling and other charges tofacilitate export during the sugar season 2018-19 @ Rs. 1000/MT for the mills located within 100 kms from the ports, @ Rs. 2500/MT for the mills located beyond 100 kms from the port in the coastal states and @Rs. 3000/MT for mills located in other than coastal states or actual expenditure, whichever is lower. The total expenditure on this account would be about Rs.1375 cr. which will be borne by Government. To ensure payment of sugarcane dues of farmers, the assistance would be credited directly into the accounts of farmers on behalf of sugar mills against cane price dues payable to farmers against FRP including arrears relating to previous years and subsequent balance, if any, would be credited to mill’s account.

Staff Strength in DS&VO

The position of staff/officials in DSVO, as on 31.3.2019 is tabulated below :-

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