Govt approves over Rs 1,100 crore subsidy for cane farmers
New Delhi: In the first ever direct subsidy payment to farmers, the government on Wednesday decided to pay sugarcane growers Rs 4.50 per quintal for the cane they will sell to loss-making millers, a move that will cost Rs 1,147 crore to the exchequer.
The Cabinet headed by Prime Minister Narendra Modi decided to give a production-linked subsidy directly to cane growers, as export subsidy, which was provided in the last two sugar seasons 2013-14 and 2014-15 to millers, was questioned by many countries at the WTO.
The decision was hailed by the industry body ISMA, which said that millers’ cane price liability would reduce by about Rs 1,100 crore, thus partly compensating their losses.
Sugar mills are facing a liquidity crunch due to surplus output that lead to low retail prices of the sweetener.
The subsidy would be paid directly to farmers on behalf of millers and adjusted against the cane price payable to farmers towards FRP, including arrears of previous years.
The remaining balance, if any, would be credited into the millers’ account, it said, adding that priority will be given to settling cane dues arrears of the previous years.
The Centre has fixed Fair and Remunerative Price (FRP), the minimum price that mills have to pay to cane farmers, at Rs 230 per quintal for the 2015-16 season (October-September). With the subsidy being borne by the government, mills will now have to pay only Rs 225.5 a quintal to farmers.
The scheme would help liquidate some of the sugar stocks and meet the export target, he added.
The subsidy would be provided to those mills which have exported at least 80 percent of the quota fixed by the food ministry.
Mills having distilleries to produce ethanol would have to achieve 80 percent of the targets notified by the Department under the EBP (ethanol blending programme).
India, the world’s second largest sugar producer, is all set to produce surplus sweetener for the sixth straight year at 26-27 million tonnes in 2015-16.
To liquidate surplus stocks, the government has made it mandatory to millers to export 4 million tonnes in the current season.
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Source:zeenews
