Government clears ₹5,500 cr package for sugar industry
FINANCIAL AID Package includes ₹1,375 cr as transport subsidy to millers, over two fold jump in production assistance to cane growers
The government Wednesday approved a ₹5,500 crore package for the sugar industry that includes over two fold jump in production assistance to cane growers and transport subsidy to mills for export up to 5 million tonnes in the marketing year 2018-19.
The Cabinet Committee on Economic Affairs (CCEA) approved the food ministry’s proposal that seeks to address the surplus domestic stock of sugar and help mills in clearing huge cane arrears of around ₹13,000 crore.
The CCEA approves the total assistance of ₹5,500 crore to support the sugar sector by wake of offsetting cost of cane and to facilitate export of sugar from the country, thereby improving liquidity of the industry enabling them to clear cane price arrears of farmers, an official statement said.
The total package is of ₹5,538 crore, of which ₹1,375 crore pertains to transport subsidy to millers and the remaining amount will be credited directly to sugarcane growers as production assistance.
With assembly elections due in some states and upcoming general polls in mid-2019, the government wants to address cane growers payment issue. This is the second financial package to bail out the sugar industry after ₹8,500
NEW DELHI:
crore announced in June. The industry is facing a glut-like situation because of record production of 32 million tonnes (MT) in the 2017-18 marketing year (October-September), resulting in a closing stock of 10 MT at the end of this month.
Under its ‘Comprehensive policy to deal with excess sugar production in the country’, the CCEA approved increase in the production assistance paid to growers to ₹13.88 per quintal for the 2018-19 marketing year from ₹5.50 per quintal this year in order to offset the cost of sugarcane to sugar mills.
With low global prices, the CCEA also approved export of 5 million tonnes of sugar under the Minimum Indicative Export Quota (MIEQ) during 2018-19 by compensating expenses towards internal transport, freight, handling and other charges.
The cabinet approved giving transport subsidy of ₹1,000 per tonne for the mills located within 100 km from ports, ₹2,500 per tonne for mill located beyond 100 km from the port in coastal states and ₹3,000 tonnes per tonne for mill located in other than coastal states.
Like in the current year, the production assistance will directly be credited into the sugarcane farmers’ account on behalf of the mills as part of the government’s measures to clear more than ₹13,500-crore in arrears sugar mills have towards farmers.