New Delhi: Concerned over mounting cane arrears of more than Rs 22,000 crore, the government is likely to announce a bailout package of over Rs 7,000 crore to ensure cash-starved mills clear dues to farmers at the earliest, sources said.
A decision in this regard is expected to be taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) scheduled tomorrow, the sources added. Last month, the government had announced a Rs 1,500 crore production-linked subsidy for sugarcane farmers to help millers pay cane payments.
Sugar mills are unable to make payments to cane growers as their financial health has worsened due to a sharp fall in sugar prices after a record production of 31.6 million tonne (MT) so far in the 2017-18 season (October-September). Maximum cane dues of more than Rs 12,000 crore are in Uttar Pradesh alone, the country’s biggest sugarcane producing state.
The Food Ministry has proposed the creation of a buffer stock of 3 million tonnes of sugar. The carrying cost of the sweetener would be borne by the government which is estimated to cost the exchequer around Rs 1,300 crore, they said. Besides setting up of the buffer stock, the food ministry has proposed fixing minimum ex-mill sale price at around Rs 30 per kg, reintroducing the monthly release mechanism and imposing stock limits on mills by fixing quota for each mill.
