‘Govt likely to pay cane growers to help sugar mills’

The Centre is likely to provide financial support to cane farmers for produce sold to sugar mills, two government sources said, in a rare move to subsidise the industry which is reeling under a glut and struggling to export because of low global prices.

India, the world’s biggest sugar consumer, last month scrapped a 20 per cent export tax and made it compulsory for mills to export at least 2 million tonnes (mt) of sugar. But mills said they would incur a loss of at least $150 a tonne because global prices were near a 2-1/2-year low.

The Centre is likely to approve a proposal to pay around ₹55 for every tonne of cane sold to the mills, sources said, seeking anonymity in line with government policy.

Mills say a sharp fall in sugar prices erodes their profitability, making it difficult for them to pay cane growers on time. Sugar mills now owe ₹17,000 crore to farmers.

Source: The Hindu Business Line – Published on: 09-04-2018