Govt approves soft loans to sugar mills to clear arrears of sugarcane farmers
Friday - March 1, 2019 5:17 pm ,
Category : INDIA
New Delhi, Mar 1 (WTN)- In a major decision to improve liquidity position of sugar mills and to help the sugar industry clear its cane dues arrears to farmers, the Cabinet Committee on Economic Affairs (CCEA) chaired by the PM Narendra Modi has approved the proposal to provide soft loans to the extent of Rs. 7900-10540 crore to the sugar industry. Government will bear the interest subvention cost at 7 - 10% to the extent of Rs. 553 cr to Rs 1054 cr for one year.
To ensure that farmers are paid their dues expeditiously, the Government has mandated that banks will obtain from the sugar mill, the list of farmers with bank account details to the extent cane dues are to be paid, so that the same are directly paid into the accounts of the farmers on behalf of the sugar mills. Subsequent balance will then be credited into the mill’s account.
Furthermore, in order to incentivize the mills to clear their dues, CCEA has also decided that the approved soft loans will be provided to those units which have already cleared at least 25 percent of their outstanding dues in the sugar season 2018-19.
Surplus sugar production over domestic consumption requirement during the last sugar season 2017-18 has adversely affected the liquidity position of the sugar mills resulting in building up of cane price arrears of farmers which reached to an alarming level of Rs 23232 crores in May, 2018. To mitigate the situation and protect the livelihoods of cane farmers, the Government fixed minimum selling price of white sugar to Rs.29/kg, allocated mill wise Minimum Indicative Export Quota (MIEQ) of 20 LMT, extending assistance to sugar mills @Rs.5.50/quintal to offset the cost of cane etc. As a result of these measures cane price arrears for sugar season 2017-18 which peaked to Rs 23232 crore at the end of May, 2018, has been reduced considerably to Rs 1291 crore.
Source-PIB
