The Centre will soon roll out a comprehensive package of more than Rs 8,000 crore to provide relief to the sugarcane farmers across the country.
The package will also ensure that the arrears of the cane growers are cleared, sources said here on Monday.
The proposed package will include creation of buffer stock of 30 LMT for which the money will be transferred directly to the accounts of the sugarcane farmers.
The creation of such a buffer stock will facilitate clearing of cane dues of the farmers and also ensure regular supply of sugar in the market by maintaining the demand and supply balance.
The cost of creation of the buffer stock, including carrying costs and other incidental charges is estimated to be around Rs 1,200 crore. The package will also include a major scheme worth more than Rs 4,400 crore for increasing the ethanol capacity in the country which will help in diversion of sugarcane for production of ethanol in surplus season to facilitate timely payment of sugarcane dues to the farmers, sources said.
The Government is also understood to have decided a minimum price for sale of sugar at around Rs 29 per kg which will help clear the sugarcane dues to the farmers.
At the same time, a mechanism will be put in place to ensure that the retail prices of sugar are kept fully under control and sufficient supplies are maintained throughout the year.
This package will be in addition to a slew of measures taken up by the government during last 4- 6 months to provide relief to the sector. These include increase in custom duty on import of sugar from 50 per cent to 100 per cent, removal of custom duty on export of sugar, imposition of reverse stock holding limits on sugar mills for the months of February and March 2018, allocation of mill-wise Minimum Indicative Export Quota (MIEQ) of 20 LMT and financial assistance at the rate of Rs.5.50 per quintal of cane crushed amounting to about Rs.1500 crore.
The sugar season of 2017-18 witnessed highest ever sugar production of more than 315 LMT in the country. This increase in production is a result of higher cane yields and improved sugar recoveries aided by our Government’s pro-farmer policies.
However, the depressed global price of sugar and the surplus domestic production has led to a decline in the market price of sugar leading to accumulation of cane arrears of more than Rs 20,000 crore.
The sugar industry is an important agro-based industry that impacts the livelihood of about 5 crore sugarcane farmers and around 5 lakh workers directly employed in sugar mills.
Employment is also generated in various ancillary activities relating to transport, trade, servicing of machinery and supply of agriculture inputs.
India is the second largest producer of sugar in the world after Brazil and is also the largest consumer. Today Indian sugar industry’s annual output is worth approximately Rs 80,000 crore.