- News>
- Economy
Rs 800 cr sugar buffer stock mooted to break cane-price tangle
New Delhi, June 22: Government has mooted a Rs 800 crore `additional` sugar buffer stock to ensure payment of the state advised price (SAP) for sugarcane in the north Indian states including Uttar Pradesh.
New Delhi, June 22: Government has mooted a Rs 800 crore "additional" sugar buffer stock to ensure payment of the state advised price (SAP) for sugarcane in the north Indian states including Uttar Pradesh.
Private sugar mills, however, have opposed the move contending that region-specific buffer stock is unacceptable and instead funds should be disbursed directly to the farmers under a Cane Development Scheme (CDS).
"Payment of differential between the sap and centre-fixed statutory minimum price (SMP) will involve around Rs 800 crore and a proposal to create a sugar buffer stock in north India to meet this requirement has been forwarded to the finance ministry," official sources said.
An all-India 20-lakh tonne sugar buffer stock was created last year and now an additional buffer has been mooted.
They said the package will not be restricted to up and will include Haryana, Punjab and Bihar and Uttranchal. However, an estimated 75 per cent of the funds will accrue to Uttar Pradesh.
Based on a requirement of around Rs 800 crore to bridge the gap between SMP and sap, it was for the finance ministry to decide the quantum of the buffer stock against which banks will also give additional credit to the millers.
Under the buffer stock norms, sugar is retained by the millers but its storage, maintenance and interest costs are paid for from the Sugar Development Fund (SDF)
Accrual of around Rs 2,000 a tonne to the millers for the buffer stock and in addition credit taken from the banks against the buffer has to be mandatorily used for making cane price payments.
Bureau Report
"Payment of differential between the sap and centre-fixed statutory minimum price (SMP) will involve around Rs 800 crore and a proposal to create a sugar buffer stock in north India to meet this requirement has been forwarded to the finance ministry," official sources said.
An all-India 20-lakh tonne sugar buffer stock was created last year and now an additional buffer has been mooted.
They said the package will not be restricted to up and will include Haryana, Punjab and Bihar and Uttranchal. However, an estimated 75 per cent of the funds will accrue to Uttar Pradesh.
Based on a requirement of around Rs 800 crore to bridge the gap between SMP and sap, it was for the finance ministry to decide the quantum of the buffer stock against which banks will also give additional credit to the millers.
Under the buffer stock norms, sugar is retained by the millers but its storage, maintenance and interest costs are paid for from the Sugar Development Fund (SDF)
Accrual of around Rs 2,000 a tonne to the millers for the buffer stock and in addition credit taken from the banks against the buffer has to be mandatorily used for making cane price payments.
Bureau Report