Due to surplus sugar production, during the previous sugar season and the current sugar season, the sugar prices remained depressed which adversely affected the liquidity of the sugar mills resulting in accumulation of cane price arrears of the farmers.
With a view to improve the liquidity position of sugar mills enabling them to clear cane price arrears of farmers, the Government has taken following measures in sugar seasons 2017-18 and 2018-19.
In order to prevent cash loss and to facilitate sugar mills to clear cane dues of farmers in time, the Government has fixed a Minimum Selling Price (MSP) of sugar w.e.f 07.06.2018 at Rs.29/kg for sale at factory gate in domestic market, below which no sugar mill can sell sugar. MSP has further been increased to Rs. 31/Kg. w.e.f. 14th February, 2019.
- Extending Assistance to sugar mills @Rs.5.50/quintal of cane crushed for sugar season 2017-18 to offset the cost of cane.
- Created buffer stock of 30 LMT for which Government is reimbursing carrying cost towards maintenance of buffer stock.
- Extending Assistance to sugar mills @Rs.13.88/quintal of cane crushed for sugar season 2018-19 to offset the cost of cane.
- Extending Assistance to sugar mills for defraying expenditure towards internal transport, freight, handling and other charges to facilitate export of sugar from the country in sugar season 2018-19.
- Government has also notified new National Policy on Bio-Fuels, 2018 under which sugarcane juice has been allowed for production of ethanol.
- Further, the Government has fixed remunerative price of ethanol produced from C-Heavy molasses and B-Heavy molasses/sugarcane juice separately for supply under Ethanol Blended Petrol (EBP) programme during ethanol season 2018-19.
- Extending soft loans to sugar mills through banks for which Government would bear interest subvention @ 7% for one year to clear cane price arrears.