Cabinet clears Rs 5,500 crore package for sugar industry

Source: The Hitavada      Date: 27 Sep 2018 08:56:04


 

NEW DELHI,

THE Government on Wednesday approved a Rs 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 Rs 13,000 crore.
The CCEA approves the total assistance of Rs 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 Rs 5,538 crore, of which Rs 1,375 crore pertains to transport subsidy to millers and the remaining amount will be credited directly to sugarcane growers as production assistance.
This is the second financial package to bail out the sugar industry after Rs 8,500 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 Rs 13.88 per quintal for the 2018-19 marketing year from Rs 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 Rs 1,000 per tonne for the mills located within 100 km from ports, Rs 2,500 per tonne for mill located beyond 100 km from the port in coastal States and Rs 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 Rs 13,500-crore in arrears sugar mills have towards farmers.
Sources had earlier said the Government will have to bear about Rs 4,500 crore on account of these measures to help sugar mills and cane farmers.


India’s sugar output is set to increase further to 35 MT in the next marketing year from 32 MT in 2017-18. The annual domestic demand stands at 26 MT.
The Government has taken a slew of measures to bail out sugar mills as well as cane farmers in the last one year.