Inaugurating the 64th AGM of Indian Sugar Mills Association in the capital on Saturday, Barnala said that late heavy rains during the last season have affected various areas of the country. In many areas, waterlogging has caused extensive damage to the sugarcane crop, which has reduced the yield as well as sucrose content.

Initial reports received from factories indicated that there was a drastic fall in recovery ranging from 0.6 per cent to 1.6 per cent of cane, he said.

Barnala, however, said the production would be sufficient to meet therequirement of sugar for the next 12 months.

Departing from his prepared speech, Barnala said his ministry would consider the industry appeal to review the stipulation reducing the distance between two sugar factories from 50 km to 15 km.

While announcing delicensing of the sugar industry, the government also said that the distance between sugar factories should be 15 km instead of 50 km earlier. KK Birla said in parliament that in effect the distance between two sugar factories would be only 7.5 km and that a representation has been sent to the industry ministry. It has not yet come to the food ministry. The food ministry will look into it after it was referred to it and see if remedial measures can be taken, he said.

Referring to the arrears due to cane growers, he asked the industry why farmers should be made to wait so long for their dues. Timely payment would have a positive effect on farmers to boost production and also discourage them from switching over to alternate crops or diverting cane togur and khandsari sectors.

He also called on sugar mills to take adequate measures to protect environment using latest technological advancements. Barnala asked the sugar industry as to why sugar prices had not declined at the retail level despite increased availability, particularly due to cheap imports.

"Why have prices not gone down despite such increase in imports?" he said. Though most of the imports had taken place through the Wagah border in Punjab, even there the prices have not declined "even by 10 paise", the minister said, adding that traders in that state were protesting against a 4 per cent duty.

Responding to Barnala's query, ISMA president Shishir Bajaj said the breakeven point for sugar mills was Rs 14.75 to Rs 15 a kg. The breakeven point has increased from Rs 14 to Rs 14.25 a kg last year as cane prices have gone up and our levy obligations are having an effect on open market prices," he said. As per the levy obligation, sugar mills have to give 40 per cent of their production to thegovernment at a fixed price for public distribution system. "Unless industry gets a breakeven cost, it would not be possible for us to survive," he said.