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Cabinet Approves Rs 7,000 Crores Bailout Package for Sugar Industry

SHAHNAWAZ | 0
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| June 6 , 2018 , 15:38 IST

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a slew of measures to ‘improve the liquidity of sugar mills resulting in the accumulation of cane price arrears of farmers involving a total of 7000 crores’.

The cabinet approved the creation of a buffer stock of 30 LMT of sugar for one year and to incur an expenditure of 1175 crore rupees. As per Press Information Bureau, the reimbursements under this scheme will be made on a quarterly basis and will be directly credited in the accounts of the farmers on behalf of the mills. This is in line with what the Prime Minister had announced while inaugurating an expressway in Baghpat, a day before Kairana bypolls.

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According to the Government, excess production during the current sugar season and an indication of higher production in the ensuing season has been depressing the market price of sugar, because of which the liquidity position of sugar mills had been adversely affected leading to accumulation of sugarcane prices that have already reached 22000 crore rupees.

The Cabinet has decided that the fixation of MSP for white sugar will be based on the Fair Remunerative Price of sugarcane and the minimum conversion cost of white sugar. The MSP will initially be set at Rs 29 per kilogram.

There will be an initial stock limit imposition on sugar mills for the current season that can later be revised by DPFD.