Centre likely to announce bailout package of Rs 7,000 crore for sugarcane farmers

The Central government is going to announce Rs 7,000 crore package which includes the creation of a buffer stock, fixing a minimum sale price for sugar and to ensure cash-starved mills clear dues to farmers at the earliest, sources said.

A decision in this regard is expected to be taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) scheduled tomorrow, the sources added.

Last month, the government had announced a Rs 1,500 crore production-linked subsidy for sugarcane farmers to help millers pay cane payments.

Sugar mills are unable to make payments to cane growers as their financial health has worsened due to a sharp fall in sugar prices after a record production of 31.6 million tonne (MT) so far in the 2017-18 season (October-September).

Maximum cane dues of more than Rs 12,000 crore are in Uttar Pradesh alone, the country's biggest sugarcane producing state.

According to sources, the government has worked out a slew of measures to ensure farmers' dues are cleared by mills.

India’s domestic sugar production at over 31.5 million tonnes in 2017-18 is the highest ever, and the resultant crash in wholesale prices meant mills were unable to pay farmers on time.

India, the second largest producer of sugar after Brazil is home to nearly 50 million cane farmers, mostly in UP, Maharashtra and Karnataka. Further, about 500,000 workers are directly employed by sugar mills.