Cabinet committee on Wednesday approved several proposals to improve the liquidity position of the sugar mills and enable them to clear sugarcane price arrears of farmers. Steps have also been taken to reduce the sugar inventories, and to stabilise domestic sugar price amid expectations of bumper domestic production. The cabinet decision is likely to help the sugarcane millers in clearing cane arrears worth over Rs 15,000 crore. According to industry body ISMA, the opening stocks of sugar is expected to be at an all-time high of around 145 lakh tonnes on October 1, 2019, as against the normative requirement of around 50 lakh tonnes.
Cabinet Committee on Economic Affairs has approved to create a buffer stock of 40 lakh metric tonnes (LMT) and to incur an estimated maximum expenditure of Rs 1,674 crore. In August 2018, the Centre had created a buffer stock of 30 lakh tonnes of sugar, costing Rs 1,175 crore to the exchequer. The reimbursement under the scheme would be met on a quarterly basis to sugar mills which would be directly credited into farmers’ account on behalf of mills against cane price dues and subsequent balance, if any, would be credited to the mill’s account.
Key takeaways from cabinet briefing:
- CCEA gave approval for the creation of a buffer stock of 40 lakh metric tonnes (LMT) of sugar for a period of one year from August 2019 to July 2020.
- The cabinet approved the merger of National Institute of Miners’ Health with ICMR-National Institute of Occupational Health.
- The cabinet also approved the sale of 481.79 acres of land held by FACT to the state government of Kerala.
- CCEA approved to sustain the determination of ‘Fair and Remunerative Price’ of sugarcane payable by sugar mills for FY 20 sugar season at Rs 275 per quintal at a basic recovery rate of 10 per cent.