JOIN USThe Centre on Wednesday approved a production subsidy of
Rs 55 per tonne to cane farmers as part of its efforts to bail out the sugar industry which has plunged into a crisis following a glut.
The decision of the Cabinet Committee on Economic Affairs is expected to help sugar mills clear the arrears they owe the cane growers. The arrears in payment of dues to farmers have crossed Rs 19,000 crore with Uttar Pradesh, Karnataka and Maharashtra being the top three states.
In poll-bound Karnataka, the sugar mills owe Rs 2,420 crore to cane growers, while mills in Uttar Pradesh top the list with nearly Rs 9,000 crore in arrears.
“The said assistance shall be paid directly to farmers on behalf of mills and be adjusted against the cane price payable due to farmers against the FRP, including arrears relating to previous years,” an official statement said here.
Last month, an informal group of ministers had recommended three options — production-linked subsidy, imposing a sugar cess and reducing the GST on ethanol to help sugar mills clear dues to cane farmers.
India’s sugar production touched an all-time high of 29.98 million tonnes (MT) till April 15 in the current season on higher cane output.
Sugar output of India, the world’s second largest producer, stood at 20.3 MT in the 2016-17 marketing year. The annual domestic demand is estimated at 25 MT.