The government is likely to raise import duty on sugar to 40 per cent from the current 25 per cent to check sliding price of the sweetener and enable mills to clear mounting cane arrears of about Rs. 20,000 crore.

A meeting of informal group of ministers, headed by Food Minister Ram Vilas Paswan, on Tuesday, decided to recommend a hike in import duty of sugar.

A consensus also emerged on the issue of creating buffer stock, restructuring of loan, promotion of ethanol output, export subsidy on white sugar among others to help solve the current crisis faced by farmers and millers.

“We discussed the suggestions made by farmers and state governments for early clearance of cane dues. Looking at the plight of farmers and unprecedented situation which sugar industry is facing, we have arrived at a consensus on couple of them to help in solving the problems in short term as well as long term,” Mr. Paswan told PTI.

To implement some of the suggestions, the Cabinet proposals will be moved, while import duty can be hiked by the Finance Ministry through an executive order, sources said.

In August last year, import duty on both raw and refined sugar was raised to 25 per cent from 15 per cent to bail out the cash-starved sugar industry.

Besides Mr. Paswan, Transport Minister Nitin Gadkari, Agriculture Minister Radha Mohan Singh, Commerce Minister Nirmala Sitharaman, Petroleum Minister Dharmendra Pradhan, Women and Child Development Minister Maneka Gandhi and Minister of State for Agriculture Sanjeev Balyan were present in the meeting.

On April 15-16, the Food Minister had called two separate meetings of farmers and Chief Ministers to resolve the cane arrear crisis.

The Centre has recently provided a subsidy of Rs. 4,000 per tonne for the exports of 1.4 million tonnes of raw sugars to improve cash-flow of millers.