NEW DELHI: India is likely to provide financial support to cane farmers for produce sold to sugar mills, two government sources said, in a rare move to subsidise the industry which is reeling under a glut and struggling to export because of low global prices. India, the world's biggest sugar consumer, last month scrapped a 20 percent export tax and made it compulsory for mills to export at least 2 million tonnes of sugar. But mills said they would incur a loss of at least $150 a tonne because global prices were near a 2-1/2-year low.
Prime Minister Narendra Modi's administration is likely to approve a proposal to pay around 55 rupees ($0.84) for every tonne of cane sold to the mills, two government sources said, seeking anonymity in line with government policy.
But it will boost the prospects of 50 million cane farmers, an influential political lobby, and 524 mills struggling with massive mounds of sugar. While the government plans to pay 55 rupees a tonne to cane farmers, mills would pay the rest of the state-set price, sources said.