Cabinet approves Rs 3,500-cr aid for sugar exports in 2020-21

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December 17, 2020 1:00 AM

This subsidy amount, however, will be directly credited into the accounts of cane farmers against outstanding dues of mills. It also cleared an allocation of Rs 5,361 crore towards subsidy for the last marketing year (2019-20), when it had announced an export assistance of Rs 10,448 per tonne.

Cane arrears carried forward from the last marketing year stood at a record Rs 3,500 crore. The Cabinet decision also coincides with the agitation led by farmers in the national Capital against three farm Bills of the Centre.Cane arrears carried forward from the last marketing year stood at a record Rs 3,500 crore. The Cabinet decision also coincides with the agitation led by farmers in the national Capital against three farm Bills of the Centre.

The Cabinet on Wednesday approved an assistance of Rs 3,500 crore for exports of six million tonne of sugar in the current marketing year through September 2021 to cut a glut in the domestic market and help cash-strapped mills clear dues to cane farmers.

This subsidy amount, however, will be directly credited into the accounts of cane farmers against outstanding dues of mills. It also cleared an allocation of Rs 5,361 crore towards subsidy for the last marketing year (2019-20), when it had announced an export assistance of Rs 10,448 per tonne.

Cane arrears carried forward from the last marketing year stood at a record Rs 3,500 crore. The Cabinet decision also coincides with the agitation led by farmers in the national Capital against three farm Bills of the Centre.

The latest move will catalyse exports of `18,000 crore (including the subsidy amount) in the 2020-21 marketing year. It will benefit about five crore farmers and their dependents, and five lakh workers employed in the sugar sector, information and broadcasting minister Prakash Javadekar said after the Cabinet meeting.

This subsidy aims to cover sugar mills’ marketing costs, including handling, upgrading and other processing charges, costs of international and internal transport, and freight charges on exports, subject to the cap of six million tonne, in the current marketing year.

Against their mandatory target of six million tonne set for 2019-20, mills had shipped out 5.7 million tonne. India, the world’s second-largest sugar producer, was forced to extend export subsidies in the past two years to enable mills to trim record inventory, caused by successive years of surplus production, and clear cane dues to farmers.

Hailing the Cabinet decisions, Abinash Verma, director general of the Indian Sugar Mills’ Association, said it will help reduce the country’s sugar stocks to 9.6 million tonne by October 1, 2021, from 10.7 million tonne in the beginning of this marketing year. This will also boost the sugar realisation of mills.

“Even though two-and-a-half months of the current season is over, considering that several large importing countries have been enquiring about Indian sugar and also considering that the drop in sugar production from Thailand gives an opportunity to India to export to traditional markets like Indonesia, Malaysia etc., our sugar industry should be able to fulfill the target of 6 million tonne of exports in 2020-21,” Verma said.

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