Sugar industry facing financial problems due to higher cost of production and lower sugar prices is likely to get some good news, as the Union Cabinet may consider a proposal on providing interest-free loans of Rs 7,200 crore to the cash-starved industry for making sugarcane payment to farmers. The proposal is in line with relief measures recommended by the PM-constituted ministerial panel, headed by Agriculture Minister Sharad Pawar, to address the sugar mills inability to pay higher cane prices this season.
There was a meeting of an informal group of ministers (GoM) on the sugar issue where besides Agriculture Minister Sharad Pawar and Food Minister K V Thomas, Finance Minister P Chidambaram, Petroleum Minister Veerappa Moily and Civil Aviation Minister Ajit Singh were present. A cabinet note was issued, where the Food Ministry proposed that loans worth Rs 7,200 crore would be provided by banks to the sugar mills exclusively for sugarcane payment. It is also being reported that the Food Ministry will move a separate Cabinet note for giving additional incentives to the industry as suggested by the PM panel. Food minister said that “The current situation has not only created cash flow and profitability issues for the sugar mills but has also led to cane arrears for 2012-13 season.”
Concerned that non-payment of cane arrears would increase farmers' woes ahead of the general elections, the GoM examined the additional sops for millers to help improve their working capital. Besides interest-free loans, the panel had recommended recasting of loans taken by mills as per Reserve Bank norms, incentives to produce 4 million tonne of raw sugar and setting up of buffer stock, besides doubling ethanol-blending in petrol to 10 percent.
There was a meeting of an informal group of ministers (GoM) on the sugar issue where besides Agriculture Minister Sharad Pawar and Food Minister K V Thomas, Finance Minister P Chidambaram, Petroleum Minister Veerappa Moily and Civil Aviation Minister Ajit Singh were present. A cabinet note was issued, where the Food Ministry proposed that loans worth Rs 7,200 crore would be provided by banks to the sugar mills exclusively for sugarcane payment. It is also being reported that the Food Ministry will move a separate Cabinet note for giving additional incentives to the industry as suggested by the PM panel. Food minister said that “The current situation has not only created cash flow and profitability issues for the sugar mills but has also led to cane arrears for 2012-13 season.”
Concerned that non-payment of cane arrears would increase farmers' woes ahead of the general elections, the GoM examined the additional sops for millers to help improve their working capital. Besides interest-free loans, the panel had recommended recasting of loans taken by mills as per Reserve Bank norms, incentives to produce 4 million tonne of raw sugar and setting up of buffer stock, besides doubling ethanol-blending in petrol to 10 percent.
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