Rs 1,540cr govt aid to reduce sugarcane dues

By Times Of India on 03 May 2018 | read
NEW DELHI: In its effort to bring quick relief to sugarcane farmers, the Cabinet on Wednesday approved payment of production assistance of Rs 5.5 per quintal of sugarcane crushed during the current season in its bid to help mills to clear their arrears expeditiously. Govt said the decision will benefit 50 million farmers and their families.

Sources said the government is likely to introduce a sugar cess on each kg of the sweetener sold to raise the Rs 1,540-crore needed to fund the assistance.

Sugarcane farmers, who have not received full payment from mills, will get the amount directly in their bank accounts from the central government. Uttar Pradesh, Maharashtra and Karnataka are the three biggest sugarcane producers in the the country. Almost three-fourth of the total Rs 19,000 crore sugarcane arrears are owned by mills operating in these states.

Sources said the system will be in place in less than two weeks and the cash transfer will start simultaneously. Karnataka goes to polls on May 12.

Officials said the financial assistance to farmers through mills will also incentivise export of the sweetener by manufacturers, which will help them clear dues expeditiously. The Cabinet decision specifies that millers will have to export 2 MT sugar during this sugar season till September.

Millers said while the ex-factory price of sugar is hovering around Rs 26-Rs 29 per kg, the cost of production is approximately Rs 36. Moreover, despite having huge excess of sugar production this year because of the bumper crop, millers are unable to export any sweetener because of low prices in the international market.

“The global price of sugar is about Rs 19-21 per kg. The government’s financial assistance to mills through farmers will give them incentive of about Rs 7.7 per kg when they export the sweetener and that will be viable. We want quick relief for farmers and also want the mills to survive,” food and consumer affairs minister Ram Vilas Paswan told TOI.

Union minister Ravi Shankar Prasad said due to over-production, millers are facing a liquidity problem which has prompted the government to take the decision.

image (2)