Plan to restructure cane, sugar industry

The agenda is aimed at solving problems facing companies involved in sugar and ethanol production.

Industry Minister Suwit Khunkitti said it would involve long-term  development, in order to maintain a balance between food and fuel supply.

"We must have sufficient cane for making sugar to serve domestic demand and producing ethanol for reducing the country's oil imports," he said.

The agenda proposes development over three cropping seasons, starting with the harvest of 2008-09 and ending after that in 2010-11. It will tackle the entire industry, beginning with cane species, water systems, soil and fertiliser.Ultimately, it is aimed at restructuring the cane and sugar industries.

To improve water systems, it estimates expenditure of about Bt68.98 billion over three years. Of this, the Cabinet last week approved the spending of Bt2 billion.

"If this budget is not enough for them, the Bank for Agricul- ture and Agricultural Cooper- atives will support unlimited loans," Suwit said.

However, the ministry has yet to establish budgets for other parts of the agenda.

To promote the ethanol industry, it will be proposed the government consider allowing ethanol manufacturers to buy petrol to mix with ethanol, as well as distribute E85 fuel in their own areas in a bid to cut down on logistics costs. However, this depends on E85 fuel receiving a good market response, he said.

"We'll try to end the regulation forcing ethanol manufacturers to sell their products only to oil traders, because this will monopolise the market, and ethanol prices will be controlled."  The ministry's agenda is aimed at boosting cane production from 73.3 million tonnes in the 2007-08 season to 95 million tonnes in 2010-11.

This will allow the industry to maintain the supply of 20 million tonnes to make sugar for the domestic market while cutting down on export quotas.