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Rs 500 cr rescue package mulled for cane growers/sugar millers
New Delhi, Jun 02: The Centre is working on a Rs 500 crore bailout package for the sugarcane farmers and sugar mills in the wake of a deadlock over cane pricing in Uttar Pradesh, officials said here.
New Delhi, Jun 02: The Centre is working on a Rs 500 crore bailout package for the sugarcane farmers and sugar mills in the wake of a deadlock over cane pricing in Uttar Pradesh, officials said here.
"Various permutations and combinations are being worked upon... Nothing has been finalised so far. An option being considered is to provide interest-free loans to the millers to facilitate the payment of state advised price (SAP)," official sources said.
They said the idea is to bridge the gap between the actual price paid by the mills and the SAP of Rs 95 per quintal fixed by the UP government, through sops disbursed by the Centre.
However, the lurking fear is that a one time package for UP will open up a 'Pandora's box' and other states may too begin to demand such packages, they added.
They said based on the Centre-fixed statutory minimum price (SMP) of Rs 69.50 per quintal at 8.5 per cent basic recovery of sugar from cane, mills are paying an average Rs 83 per quintal to the growers.
This includes the Rs four a quintal provided by the state government to mills in the form of tax concessions. Against a SAP of Rs 95 pr quintal fixed by the state, the shortfall for the farmers is Rs 12 every quintal of cane crushed by the millers.
If this is taken care of through interest-free loans disbursed to the millers, the Centre's outflow will be around Rs 500 crore, they said.
An option is to source it through the Sugar Development Fund (SDF) which at present has an estimated Rs 1,300 crore in its kitty, they added.
Bureau Report
They said the idea is to bridge the gap between the actual price paid by the mills and the SAP of Rs 95 per quintal fixed by the UP government, through sops disbursed by the Centre.
However, the lurking fear is that a one time package for UP will open up a 'Pandora's box' and other states may too begin to demand such packages, they added.
They said based on the Centre-fixed statutory minimum price (SMP) of Rs 69.50 per quintal at 8.5 per cent basic recovery of sugar from cane, mills are paying an average Rs 83 per quintal to the growers.
This includes the Rs four a quintal provided by the state government to mills in the form of tax concessions. Against a SAP of Rs 95 pr quintal fixed by the state, the shortfall for the farmers is Rs 12 every quintal of cane crushed by the millers.
If this is taken care of through interest-free loans disbursed to the millers, the Centre's outflow will be around Rs 500 crore, they said.
An option is to source it through the Sugar Development Fund (SDF) which at present has an estimated Rs 1,300 crore in its kitty, they added.
Bureau Report