Cabinet okays Rs 3,500 cr sugar export subsidy

In the previous marketing year 2019-20 (October-September), the govt provided a lump sum export subsidy of Rs 10,448 per tonne

The Cabinet Committee on Economic Affairs Wednesday approved Rs 3,500 crore subsidy for sugar farmers, Union Minister Prakash Javadekar on Wednesday.

He said 60 lakh tonnes of sugar will be exported during the ongoing marketing year 2020-21 that will help farmers clear outstanding dues to sugarcane farmers.

He said five crore sugarcane farmers will benefit from Cabinet's decision on sugar. They will get subsidy directly in their account.

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"Cabinet has taken the decision to help farmers directly by depositing money of subsidy into their accounts. The subsidy will be given on 60 lakh tonnes of sugar exports at the rate of Rs 6,000 per tonne," the minister said.

The minister said both "sugar industry as well as sugarcane farmers are in crisis" because of high domestic production at 310 lakh tonnes as against the annual demand of 260 lakh tonnes.

"Farmers sell their sugarcane to the sugar mills, however, the farmers are not getting their dues from the sugar mill owners as they have surplus sugar stock.

“To address this concern, the Government is facilitating the evacuation of surplus sugar stock.

“This will enable payment of dues of the sugarcane farmers. Government will incur about Rs 3,500 crore for this purpose, and this assistance would be directly credited into farmers’ accounts on behalf of sugar mills against cane price dues and subsequent balance, if any, would be credited to mill’s account," an official statement said.

In the previous marketing year 2019-20 (October-September), the government provided a lump sum export subsidy of Rs 10,448 per tonne, costing the exchequer Rs 6,268 crore.