CCEA approves ₹3,500-crore assistance for sugarcane farmers

The Cabinet Commitee on Economic Affairs has approved assistance of about ₹3,500 crore for sugarcane farmers (Ganna Kisan) in a meeting on Wednesday.

“This decision will benefit 5 crore sugarcane farmers and their dependents, as well as the 5 lakh workers employed in the sugar mills and related ancillary activities,” according to an official release circulated by the government.

The subsidy aims at covering expenses on marketing costs including handling, upgrading and other processing costs and costs of international and internal transport and freight charges on export of up to 60 lakh tonnes (lt) of sugar limited to Maximum Admissible Export Quota (MAEQ) allocated to sugar mills for sugar season 2020-21, the release added.

While the World Trade Organisation has banned most forms of farm export subsidies, developing countries like India are allowed to provide subsidies for marketing and transport till 2023.

Cane price dues

The government is facilitating the evacuation of surplus sugar stock that has been piling up as farmers are not getting their dues from the sugar mill owners who buy their sugar cane.

“This will enable payment of dues of the sugarcane farmers. Government will incur about ₹3,500 crore for this purpose, and this assistance would be directly credited into farmers’ accounts on behalf of sugar mills against cane price dues and subsequent balance, if any, would be credited to mills’ account,” the statement said.

Industry reactions

Meanwhile, welcoming the decision, the sugar industry feels that export target of 6 million tonnes could be achieved during 2020-21.

“The sugar industry welcomes the much awaited decision on the sugar export programme for 2020-21 sugar season. At the current world prices and even if there is a small correction therein, sugar exports from India will be viable with the export subsidy of ₹6,000 per tonne. The subsidy amount is lower than last year but considering that the world sugar prices are higher as compared to what they were at the same period in the last season, the industry is confident to perform well again in 2020-21,” said Abinash Verma, Director-General, Indian Sugar Mills Association (ISMA), in a statement.

“Even though 2.5 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 for India to export to their traditional markets like Indonesia, Malaysia, etc., the Indian sugar industry should be able to fulfil the target of 6 million tonnes of sugar exports in 2020-21. This will help reduce the sugar stocks and from an opening balance of 10.7 million tonnes as on October 1, 2020, we should be able to reduce carry forward into the next season to 9.6 million tonnes. The 6 million tonnes would give the industry ₹18,000 crore from exports and subsidy, which will help reduce cane price arrears. The other good news of budgetary allocation of ₹5,300 crore for past subsidies will further help the sugar mills to clear their cane price arrears,” Verma said.

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