To help the industry clear cane dues arrears, the Cabinet Committee on Economic Affairs chaired by the Prime Minister Narendra Modi today approved a proposal to provide Rs 6000 crore loan to the sugar industry. CCEA has provided a one year moratorium on loan and bear the interest subvention cost to the extent of Rs 600 crore. To ensure that farmers are paid dues the government has mandated banks to obtain the list of farmers from the sugar mills.
CCEA has also decided that soft loans will be provided to the units which clear at least 50 percent of their arrears before June 30. Remunerative price is fixed in view the recommendations of the Commission for Agricultural Costs and Prices. For this season it is Rs.220 per quintal.
Surplus production has led to subdued sugar prices. Similar situation prevails in international markets. This has led to a build up of cane price arrears. In 2014-2015 the cane price arrears are approximately Rs. 21,000 crore.
The government has taken steps to protect the livelihood of cane farmers. To improve the liquidity of sugar mills and facilitate payment of cane dues arrears, the government has increased the export incentive on raw sugar from Rs 3200 per MT to Rs 4000 per MT.