Cabinet approved Sugar Export Subsidy Cabinet approved Sugar Export Subsidy Cabinet approved Sugar Export Subsidy

The government on Wednesday  approved a subsidy of Rs 3,500 crore to sugar mills for the export of 60 lakh tonnes of sweetener  during the ongoing marketing year 2020-21 as part of its    effort to help them clear  outstanding due  to sugarcane farmers  briefing the media after  meeting   information and broadcasting  ministry  said the cabinet  commited on economic affairs   has approved  a subsidy of rs 3500 crore  on export of 60 lakh tonnes  of sweetener and subsidy amount  will directly given to  farmer

The CCEA  has approved the subsidy  at the rate of  rs  6 per kg  for the current year much lower than about rs 10.50 per kg in the 19-20 marketing year keeping view favourable international prices.        

Javadekar said both “sugar industry as well as sugarcane farmers  are in crisis”  because of high domestic production in the last two-three years. This year too, production is expected to be 310 lakh tonnes as against the annual demand of 260 lakh tonnes.

The  decision will benefit five core farmers and five lakh workers employed in sugar mills and related ancillary activities. Sugar mills will be able to earn rs 18000 crore revenue from the export, said javadekar, who is also union environment minister.

In a separate statement, the food ministry said farmers sell their sugarcane to sugar  mills, however, farmers are not getting their dues from sugar mill owners as they have surplus sugar stock

“To address this concern, the government is facilitating the evacuation of surplus sugar stock . this will enable payment of dues of the sugarcane farmers. Government will incur about rs 3500 crore for this purpose,”it said.

And this assistance  would be directly credited into farmers’ accounts on behalf of sugar mills against cane price dues and subsequent balance, if any, would be credited to mill’s account, it added.

The subsidy aims at covering expenses on marketing costs including handling, upgrading and other processing costs and costs of international and internal transport  and freight charges on export of up to 60 lakh tonnes of sugar limited to Maximum Admissible  Export Quota (M AEQ) allocated to sugar mills for sugar season 2020-2021.

In the previous marketing year 2019-20 (October-September),  the  government provided a lump sum export subsidy of rs 10448 per tonne,  costing the exchequer Rs 6268 crore.

Mills exported 5.7 million tonnes of sugar against the mandatory quota of 6 million tonnes set for the 2019-20 season( October-september), according to official data.

India the world’s second-largest sugar-producing  country, had  to offer export subsidies during the past two years  to reduce surplus stocks and help cash-starved sugar mills  clear cane payment to growers.

Last month, food secretary Sudhanshu Pandey  said the government is reconsidering extension of sugar export subsidies as india has got good opportunity to sell the sweetener in the international market.

“Thailand”s  production is expected to be down this year, while Brazil’s crushing will only start in April 2021. From now till April, there is good export opportunity for india, “ the secretary had said.

This is the opportunity the industry has to encash upon, we are doing our best given that india is expected to have a bumper  sugar  production this year,” he added.

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