Mr Mahen Seeruttun a répondu à une question parlementaire posée par le député Ramful lors de la séance du 14 Novembre 2017.
B/747 The Honourable Third Member for Mahebourg and Plaine Magnien
To ask the Honourable Minister of Agro-Industry and Food Security –
Whether, in regard to formula applicable for the calculation and distribution of the accruals out of the Bagasse Transfer Price Fund, he will state if consideration will be given for amendments to be introduced to the Sugar Industry Efficiency Act for a review thereof to provide for a fair and reasonable price to small planters?
I am informed that the formula applicable for the calculation and distribution of the accruals out of the Bagasse Transfer Price Fund is computed based on the provisions of Section 13 of the Sugar Industry Efficiency (SIE) Act of 2001 and its accompanying Sixth Schedule. Payment is effected based on the percentages given below:
· 12% of proceeds is distributed to Planters of Group I – Miller planters;
· 38% of proceeds goes to planters of Group II – all other planters; and
· the remaining 50% to the Power Suppliers.
The above percentages have been worked out following an out-of-court settlement reached between the then Ministry of Agriculture and Natural Resources and the MSPA in December 1999.
The House will note that the price of bagasse was first set in 1985 and the price fixed was Rs100 for the planters. The millers did not benefit from the Fund but their source of revenue was from the sale of electricity to CEB.
In 1993, the SIE Act was amended to promote the use of bagasse for the production of energy and a new formula for the distribution of the accruals out of the Bagasse Transfer Price Fund was included. The accruals were divided into –
(a) a first group consisting of every planter who is also a miller or who directly or indirectly controls, or is controlled by the miller; and
(b) a second group consisting of all other planters.
The formula for distribution is included in the second schedule of the Act.
As per the second schedule, the miller or firm power supplier were eligible for payment only after making good the entitlement of the first and second group of planters.
The then MSPA members disagreed with the amendments brought in 1993, on the sharing of the share of miller planter to millers and power producers and the MSPA had lodged a case before the Supreme Court.
In November 1999, a new sharing ratio was worked out between the then Ministry of Agriculture and the MSPA members. The agreement on the sharing ratio was as indicated earlier.
It would be noted that between the period 1985 to 1998, only planters were receiving proceeds out of bagasse for electricity generation.
In year 2015, Government has agreed to the setting up of a Sugarcane Sustainability Fund and a Biomass Framework. Payment to planters out of the SCSF is made as follows:
• Rs1100 per tonne of sugar to planters producing up to 60 tonnes; and
• Rs 300 per tonne of sugar in excess of 60 tonnes.
The price obtained for bagasse by the small planters had increased by more than ten times.
In December 2016, the Government went further to legislate the Sugarcane Sustainability Fund, through the SIE (Amendment) Act 2016, in support of planters.
The House will note that I have set up a Technical Committee to look into all the issues which have an impact on the cane sector and the revenue derived thereof, especially at this difficult time where the cane sector is having to face challenges of an unprecedented nature. The small planter will tend to suffer the most from the prevailing market price.
The aim is, therefore, to look and consolidate all the revenue streams and this include remuneration from bagasse also. I can reassure the House that the need for review of the provisions of the SIE Act which concern bagasse remuneration will be carefully assessed and actions deemed appropriate will be taken by Government.