The Cabinet Committee on Economic Affairs (CCEA) chime with government approving transport subsidy for sugar
The government on Wednesday approved a Rs 4,500 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.
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 ministry has recommended offsetting cost of sugarcane to sugar mills by increasing the production assistance paid to growers at Rs 13.88 per quintal for the 2018-19 marketing year from Rs 5.50 per quintal for this year.
With low global prices, the ministry has suggested helping mills to export 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.
Finance Minister @arunjaitley: To Provide Assistance To Sugar Mills At Rs 13.88/Quintal To Offset Cost Of Cane.#Cabinet Approved Transport Subsidy For Sugar Exports.#Cabinet Approved Financial Assistance Of Rs 5,538 Cr For Sugar Sector. @FinMinIndia pic.twitter.com/lOWmsMGJXQ
— BTVI Live (@BTVI) September 26, 2018
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.
— ET NOW (@ETNOWlive) September 26, 2018
These steps will enable mills to boost sugar exports and clear cane arrears, which currently stand at Rs 13,567 crore. Mills in Uttar Pradesh owe the maximum at Rs 9,817 crore to 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.
By- Chetan Priyadarshan