New Delhi, Aug 23: The Union Cabinet today cleared a sugarcane package of Rs 669 crore for the states of Uttar Pradesh, Bihar, Punjab, Haryana and Uttaranchal.
This is to bridge the gap between state advisory prices and the Central government notified Statutory Minimum Price (SMP) of sugarcane, official sources said.


When contacted, Minister of State for Agriculture Hukumdeo Narain Yadav said that talks were on with state governments on the mode of disbursal of money to the cane farmers under the package.


"The funds under the package can be released either in form of loan to states or as a grant depending on the understanding reached with them by the Centre. Some way will be found," he said.

Sources said that a provision of Rs 609 crore had already been made for the agriculture ministry to cater to the package in the supplementary demand for grants which were passed by Parliament recently.



They said that it was a one-time package for the five states of Uttar Pradesh, Uttranchal, Bihar, Punjab and Haryana to ensure that the farmers get the cane price fixed by various state governments.

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For 2002-03 fiscal, the Centre had fixed a statutory minimum price (SMP) of Rs 69.50 a quintal linked to 8.5 per cent recovery of sugar from cane based on which farmers were getting an average Rs 82 per quintal in Uttar Pradesh.



However, the state government had fixed an advised price (SAP) for sugarcane of Rs 95 a quintal, but the private millers had expressed their inability to pay this rate on the plea that the drastic fall in sugar prices had hit their own realisations.

Since this had led to a fall in farmers' income by more than Rs 13 a quintal and state governments, too, were not prepared to bear the financial burden of bridging the gap between the SAP and SMP, the Centre had to intervene in the form of the financial package which was cleared on Saturday by the Cabinet, sources added.

Bureau Report