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Rs 4,500 crore bailout package for sugar industry approved

The Government has approved a Rs 4,500 crore package for the sugar industry which includes - over two-fold leap in production assistance to the cane farmers and transport subsidy to sugar factories for exports up to 5 million tonnes in 2018-19.

Sources informed that the Cabinet Committee on Economic Affairs (CCEA) has accepted the Food Ministry’s proposal that seeks to address the leftover domestic stock and help sugar factories in clearing huge cane arrears of around Rs 13,000 crore. With Assembly elections nearing in some States, the Government is keen to address the cane farmers’ payment issue. This is the second financial package given to help the sugar industry after Rs 8,500 crore was announced in June.

Under its ‘Comprehensive policy to deal with surplus sugar production in the country’, the Ministry has suggested offsetting the cost of sugarcane to sugar factories by increasing the production assistance given to farmers at Rs 13.88/quintal in 2018-19 from the present Rs 5.50/ quintal.

The ministry has also proposed a transport subsidy of Rs 1,000/tonne for the sugar factories located within 100 km from ports, Rs 2,500/tonne for mills situated beyond 100 km from the port in coastal states and Rs 3,000/ tonne for factories located in other than coastal states. The production assistance will directly be credited into the cane growers’ account on behalf of the mills.



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