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| Tuesday, 6 April 2004 |
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Vibrant sugar industry targets 50% domestic needs by Lionel Yodhasinghe At least 50 percent of the domestic sugar requirements can be A four-member team of economic and agricultural experts in their joint report, 'Sri Lanka Sugar sector policy' made eight recommendations in this regard last week and asked the Government to implement them soon to boost this major food industry which is second only to rice production. The two sugar factories in Sri Lanka currently produce nine percent of her domestic sugar requirements and 40 percent of the alcohol, and the balance including other sugar related products are imported at a cost of Rs.18 billion per year, the report stated. Among the recommendations are: A variable tariff should be levied on imported sugar to ensure that a remunerative price determined by the Sugarcane Research Institute based on local costs of production is maintained. Sugar importers should purchase domestic production of sugar in the ratio of one unit of local sugar to five of imported sugar. Millers should be allowed to import sugar up to 150% of production, free of tariff and limited to five years, to motivate them to increase local production. Input incentives applicable to other crops in the country should also be made available to the sugar sector. Such incentives should also cover sugar and distillery factory modernisation. The current cess on sugar imports should be expanded to include imports of alcohol. The cess on domestic production of sugar should be suspended for an interim period. The state and private sector should take the responsibility of infrastructure development in cane producing areas and expedite it. The Sugarcane Research Institute (SRI) Act should be amended to enable SRI to get involved actively in extension work. SRI should expand and improve research activities to include variety improvement, field management, mechanisation, and mill and by products technology, and a National Agency for Sugar Industry Development, backed by a Sugar Industry Regulatory Act, should be set up to oversee the sugar sector development, it could in part be funded by the proceeds to tariffs in excess of current levels. All the planned objectives could be achieved in a manner friendly to the environment, which is a factor of overwhelming importance in the context of worldwide pollution as evidenced by Kyoto Protocol of the UN, the report said. Population growth and increases in incomes associated with economic growth are expected to double the current demand by the year 2012. Per capita consumption is also likely to increase. Therefore, if local production does not increase to meet the growing demand, apart from the drain of foreign exchange estimated at Rs.20 billion, the country will lose thousands of job opportunities, income, regional development and poverty alleviation. Sri Lanka also spends over Rs. 15 billion annually on imports of milk and milk products. Livestock production in the country is largely limited by the inadequacy of cheap fodder and animal feed. Sugar cane tops, together with molasses could form a cheap resource to meet this need to develop the milk industry too. Similarly, another Rs. 5 billion in foreign exchange on import of alcohol and one billion of vinegar and fibreboard could be saved as they can be produced locally as by-products. The report said that the industry could be used to generate bio fuel, and fuel gasoline which could supplement the national grid especially during drought periods. The Sri Lanka Sugar Sector Policy was drawn up by Director and CEO, SRI, Dr. M.W.N. Dharmawardene, former Directors of the Post Graduate Institute of Agriculture and Emeritus Professors of Agricultural Economic and Crop Science University of Peradeniya, Prof. T. Jogaratnam and Prof. Y.D.A. Senanayake and Head Economic and Extension, SRI, Dr. A.P. Keerthipala. |
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Produced by Lake House |
produced
locally thereby saving half of the country's current sugar consumption of
Rs18 billion in foreign exchange and creating about 70,000 jobs for the
rural youth if the Government encourages the industry to become a vibrant
sector.
