The Modi Cabinet has announced a bailout package of Rs 8000 Cr for Sugarcane farmers on 5th June to help farmers who have long waited for their dues from sugar mills.
This breathing relief for Sugarcane farmers has come just a week after ruling party; BJP lost Lok Sabha by poll election to the united front in Kairana of Uttar Pradesh, which falls under the Sugar belt of the country. Sugarcane farmers in the region are among the worst hit by pending dues.
The relief package, the government has come up with, includes, creating a buffer stock of 30 lakh metric tonnes. The government will bear the mills’ cost on interest, storage and insurance, estimated to be about Rs 1,200 crore. This is likely to help mills improve their liquidity so that they can pay farmers.
The money for the buffer stocks will be directly transferred to the farmers’ accounts.
Another feature of the package is likely to be a Rs 4,400-crore scheme to increase the production capacity of ethanol in India. Sugarcane can then be diverted for use in the production of ethanol in surplus years so that farmers are paid on time.
The government has set a minimum price for the sale of sugar at Rs 29 per kg.
Sugar mills in the country owe over Rs 23,000 crore to sugarcane farmers, with Uttar Pradesh accounting for Rs 12,500 crore of the amount. The figure in Kairana alone is more than Rs 800 crore, according to The Indian Express. In nearby Baraut city, a farmer who was protesting the non-payment of dues by sugar mills died a day before the bye-election. Dozens of sugarcane farmers had started a protest on May 21.
The Lok Sabha constituency, Kairana alone has six mills where Sugarcane mill owners owe farmers an estimated Rs 8000 crore worth of dues.
The Centre has already doubled sugar import duty to 100 percent and scrapped export duty to check sliding domestic prices. It has also asked mills to export 2 million tonne of sugar.
