Tribune News Service

New Delhi, November 18

The Union Government will, for the first time, pay sugarcane growers a part of the cost for the produce that they sell to the mills. According to a decision by the Union Cabinet chaired by Prime Minister Narendra Modi, the government would directly pay farmers Rs 45 for every tonne of cane produced.

The move is aimed at helping cane growers and sugar mills reeling under a global glut and fall in local sugar prices triggered by five years of surplus output. Citing poor finances, mills have not been able to pay arrears to the farmers. The Centre’s decision would help mills clear dues of cane growers, Union minister Piyush Goyal said.

“Under this scheme, production subsidy will be given to offset the cost of cane and facilitate timely payment to farmers,” he said.

The subsidy will be paid directly to the farmers on behalf of mills and be adjusted against the cane price payable to the farmers towards FRP, including arrears relating to previous years. Subsequent balance, if any, would be credited to the mill’s account, officials said. Settling arrears for previous years would be a priority, the said.

Production surplus over domestic consumption over the past five years has led to subdued sugar prices, which has stressed the liquidity position of the industry, leading to a build up of cane price arrears