By The Sweet Of Their Brow: After Rs 8,500-Crore Government Package, Sugar Farmers Get Another Rs 5,500 Crore Subsidy For Transport, Production

A financial package of Rs 5,500 crore has been cleared by Union Finance ministry for the sugar industry, which is reeling under an unprecedented bounty of harvest this year, reports The Business Line.

Union Finance Minister Arun Jaitley said while speaking to the media on the Cabinet decisions, announced a package by which a transport subsidy for exports up to 5 million tonnes and a financial aid of Rs 13.88 per quintal of cane crushed in the upcoming sugar season 2018-19 will be offered.

A sum of Rs 8,500 crore was declared in June, and this is the second bailout package. The industry faced a tough situation because of record production of 32 million tonnes (MT) in the 2017-18 sugar season. A possibility of having higher sugar production in the upcoming season cannot be ruled out as the acreage under sugarcane is higher.

The sugar mills located within 100 km from ports would get Rs 1,000 per tonne for payment of transport, freight and handling charges, while those situated more than 100 km from ports and in coastal States would receive a sum of Rs 2,500 per tonne towards meeting these expenses.

States which have no coastal areas would get Rs 3,000 per tonne or the actual expense they incur. The government would allocate a sum of Rs 1,375 crore for this, an official statement said.

Besides, to help sugar mills clear their dues to sugarcane farmers, the government has also decided to provide production assistance of Rs 13.88 per quintal of cane crushed during the forthcoming sugar season.

The government expects a total outgo of Rs 4,163 crore and plans to pay the farmers directly, though it will be adjusted against the dues from the mills to them.

The government’s decision to pay Rs 13.88 per quintal of sugarcane crushed would help reduce the industry’s cane price liability by around 5 per cent of next year’s fair and remunerative price (FRP) of Rs 275 per quintal, according to Indian Sugar Mills Association (ISMA) Director-General Abinash Verma.

The package announced is the most substantial financial assistance towards FRP ever given by the government, he said. Freight and handling charges incurred by sugar mills on exports are other areas that need government support, and he opined that there was a need for making exports compulsory for all mills in the country.