5,500- cr aid package for sugar industry

Giving major relief to sugarcane growers and mill owners, the Centre on Wednesday approved a ` 5,500- crore sugar industry package that includes a twofold jump in production assistance to growers and transport subsidy to mills for export upto five million tonnes in 2018- 19.

The CCEA approved the food ministry’s proposal to address the surplus domestic stock of sugar and help mills clear huge cane arrears of around ` 13,000 crores.

In a major relief to sugarcane growers and mill owners, the Centre on Wednesday approved a ` 5,500 crore package for the sugar industry that includes over two- fold jump in production assistance to 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 approved 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, official sources 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 crore announced in June. The industry is facing a glut- like situation because of record production of 32 million tonnes in the 201718 marketing year ( October- Septe- mber), resulting in a closing stock of 10 million tonnes 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 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 mills located beyond 100 km from the port and ` 3,000 tonnes per tonne for mill located in other than coastal states.