To provide relief to about 5 crore sugarcane farmers and around 5 lakh workers directly employed in sugar mills and to ensure clearance of their dues, the Modi Government is going to bring out a comprehensive package of more than Rs 8,000 crore.
This 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, said reliable sources.
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.
The Government is also understood to have decided a minimum price for sale of sugar at around Rs 29 per kilogram which will help clearance of 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.
In order to improve the liquidity of the industry so that the cane price arrears of farmers can be cleared, the Modi Government has implemented a series of interventions in the past four months.
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 Rs 5.50 per quintal of cane crushed amounting to about Rs 1,500 crore.
Today Indian sugar industry's annual output is worth approximately Rs 80,000 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, said industry experts.