Sugar mills to get Centre's financial aid

New Delhi, [India] May 2 (ANI): The Cabinet Committee on Economic Affairs on Wednesday gave its approval to provide financial assistance at the rate of Rs 5.50 per quintal of cane crushed in sugar season 2017-18 to help the sugar mills clear dues of farmers.

The assistance will be paid directly to the farmers on behalf of the mills. It will be adjusted against the cane price payable due to the farmers against Fair and Remunerative Price (FRP) including arrears relating to previous years.

Subsequently, if any balances remain, it will be credited to the mill's account.

Due to higher sugar production against the estimated consumption during the current sugar season 2017-18, the domestic sugar prices have remained low since the commencement of the season.

Due to depressed market sentiments and a crash in sugar prices, the liquidity position of sugar mills has been adversely affected, leading to accumulation of cane price dues of farmers which have reached to more than Rs 19,000 crore.

In order to stabilise sugar prices at a reasonable level and to improve the liquidity position of mills thereby enabling them to clear cane price dues of farmers.

The government has taken following steps in past three months, wherein customs duty on import of sugar was increased from 50% to 100% in the interest of farmers. Also, a reverse stock holding limits on producers of sugar for the months of February and March 2018 was imposed.

The government has also fully withdrawn the customs duty on export of sugar to encourage sugar industry to start exploring the possibility of export of sugar. In view of the inventory levels with the sugar industry and to facilitate achievement of financial liquidity, mill-wise Minimum Indicative Export Quotas (MIEQ) has been fixed for sugar season 2017-18.

Export Quotas of 20 lakh tonnes of all grades of sugar- raw, plantation white as well as refined, have been prorated amongst sugar factories by taking into account their average production of sugar achieved by the sugar mills during last two operational sugar seasons and the current season (up to February 2018).

Further, to facilitate and incentivise export of surplus sugar by sugar mills, the government has allowed Duty-Free Import Authorization (DFIA) scheme in respect of sugar.(ANI)