India approves Rs 3,500 crore assistance for sugar exports in 2020-21

sugar.jpg

Finally, the Indian cabinet approved an assistance of Rs 3,500 crore for exports of six million tonnes of sugar in the current marketing year to get rid of the excess sugar from 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 Rs 18,000 crore worth of sugar (including the subsidy amount) in the 2020-21 marketing year. It will benefit about five crore farmers 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 tonnes, in the current marketing year.

Against their mandatory target of six million tonne set for 2019-20, mills had shipped out 5.7 million tonnes. 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.

The Indian Sugar Mills’ Association (ISMA) hailed the government’s decision and said it will help reduce the country’s sugar stocks to 9.6 million tonnes by October 1, 2021, from 10.7 million tonnes in the beginning of this marketing year. The sugar industry should be able to fulfill the target of 6 million tonnes of exports in 2020-21, ISMA hoped.

Leave a Reply

Your email address will not be published. Required fields are marked *