Kairana effect: Modi government plans Rs 8,000 crore package for sugarcane farmers ahead of 2019

By: | Updated: June 5, 2018 10:47 AM

The disappointment faced by the Bharatiya Janata Party (BJP) in the bypolls in Uttar Pradesh's Kairana where it was served a crushing defeat appears to have put the government's focus back on the issue of sugarcane farmers.

KAIRANA BYPOLL RESULTNow, the central government is likely to announce a package for sugarcane farmers and industry so that the situation remains under control ahead of the 2019 Lok Sabha election

The disappointment faced by the Bharatiya Janata Party (BJP) in the bypolls in Uttar Pradesh’s Kairana where it was served a crushing defeat appears to have put the government’s focus back on the issue of sugarcane farmers. During the campaigning and aftermath of the outcome, opposition party leaders claimed that ‘Ganna’ (sugarcane) played a pivotal role in the results.

Now, the central government is likely to announce a package for sugarcane farmers and industry so that the situation remains under control ahead of the 2019 Lok Sabha election, The Indian Express reported. As per the report, the amount of the relief package is likely to be around Rs 8,000 crore. The dole is aimed at reducing the stress in the sugar industry with an eye on clearing the dues of sugarcane farmers, the report says.

The issues pertaining to sugarcane farmers and industry have often hit headlines in Uttar Pradesh and Maharashtra. With just one year to go for the 2019 Lok Sabha election, this may prove to be a roadblock in BJP’s chance of repeating the success of 2014. Both the aforementioned states are very crucial for BJP and PM Modi as there are 128 Lok Sabha seats up for grabs. BJP had performed tremendously well in UP and Maharashtra in the 2014 Lok Sabha, grabbing 71 and 28 seats in Uttar Pradesh and Maharashtra, respectively.

With Opposition unity getting strengthened with every passing poll, BJP needs to keep them at bay, at least in its strongholds. These two states also have BJP governments and two key Chief Ministers in the form of Yogi Adityanath and Devendra Fadnavis.

During the run-up to the Kairana bypoll, Uttar Pradesh Chief Minister Yogi Adityanath admitted that sugarcane was an issue of concern. He gave an assurance to the farmers that their dues will be cleared by the sugar mills. In Kairana constituency alone, six mills owed farmers more than Rs 800 crore cane dues ahead of the bypoll. The move to announce a package appears to be an attempt to arrest the situation before it spins out of control in an election year.

Key highlights of the Package

As part of the Rs 8,000 crore package, the government may come up with a scheme worth Rs 4,400 crore with an aim to increase ethanol production capacity in the country. This will help in the diversion of sugarcane for ethanol production in a surplus season to facilitate timely payment of sugarcane dues to farmers. The government is looking to set a minimum price for the sale of sugar at around Rs 29/kg to help the sugar industry.

Earlier, the government had taken measures like raising custom duty on import of sugar from 50% to 100%, removal of custom duty on export of sugar, imposition of reverse stock holding limits on sugar mills for 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/quintal of cane crushed, totalling around Rs 1,500 crore.

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