ISLAMABAD, Dec 16: Pakistan Sugar Mills Association (PSMA) has proposed to the government that a sugar export development fund (SEDF) be created by levying a development cess at the rate of 60 paisa per kg on sugar produced in 2003-04.

The PSMA, in a letter to the finance minister, Shaukat Aziz asked for the establishment of SEDF under the aegis of ministry of commerce. PSMA said the cess would yield around Rs2-3 billion.

According to the letter, released to the media on Tuesday, PSMA said that the yield from the SEDF in 2003-04 would be enough to provide subsidy to export 400,000 tons of surplus sugar to neighbouring countries.

The association was of the opinion that the successful operation would lead to a permanent device for handling such overproduction in the future.

“Our neighbouring sugar deficit countries—Afghanistan and Iran— are the net importers from the international market and owing to the subsidy given in the form of transport and cash given by the European Union and India, we are unable to compete in the countries without support from the government,” they remarked.