Amid differences of opinion between Food and Agriculture Ministries for providing incentives for raw sugar export, the Cabinet Committee on Economic Affairs (CCEA) has deferred decision on Food Ministry’s proposal for fixing subsidy for exports of raw sugar. Food Ministry has proposed cash subsidy of Rs 2,000 per tonne to the beleaguered sugar industry for export of four million tonnes of raw sugar for a period of two years. On the other hand, Agriculture Ministry is in favour of a reasonable subsidy not less than Rs 3,500 per tonne in order to provide major boost to the exports of raw sugar.
Food Minister K V Thomas stated that Committee of Secretaries of food, agriculture, commerce and finance ministries would meet soon to re-calculate the subsidy of raw exports. As per the Food Ministry proposal, total subsidy outgo will be around Rs 800 crore that will be adjusted from the Sugar Development Fund (SDF), while the government would have to bear Rs 1,400 crore if Agriculture Ministry’s demand is considered. Meanwhile, the government had already given subsidy of Rs 1,450 per tonne in 2007-08 to export six million tonnes of sugar and the current incentive is being worked on the same procedure.
However it would be difficult for India to export raw sugar as global prices are ruling much lower as against the domestic production cost of Rs 26,500 per tonne. Further, domestic sugar mills are facing cash crunch as sugar prices have come down below the cost of production in view of surplus supplies. Meanwhile, the government has been taking measures to improve cash flow of sugar mills. During December’2013, the government had approved Rs 6,600 crore interest-free loans to sugar industry for making payment to sugarcane farmers.
Food Minister K V Thomas stated that Committee of Secretaries of food, agriculture, commerce and finance ministries would meet soon to re-calculate the subsidy of raw exports. As per the Food Ministry proposal, total subsidy outgo will be around Rs 800 crore that will be adjusted from the Sugar Development Fund (SDF), while the government would have to bear Rs 1,400 crore if Agriculture Ministry’s demand is considered. Meanwhile, the government had already given subsidy of Rs 1,450 per tonne in 2007-08 to export six million tonnes of sugar and the current incentive is being worked on the same procedure.
However it would be difficult for India to export raw sugar as global prices are ruling much lower as against the domestic production cost of Rs 26,500 per tonne. Further, domestic sugar mills are facing cash crunch as sugar prices have come down below the cost of production in view of surplus supplies. Meanwhile, the government has been taking measures to improve cash flow of sugar mills. During December’2013, the government had approved Rs 6,600 crore interest-free loans to sugar industry for making payment to sugarcane farmers.
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