In order to improve the problem of liquidity of sugar mills resulting in accumulation of huge cane price arrears of farmers, the Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the following measures involving total amount of about Rs. 7000 crore:
Background:
Excess production during the current Sugar Season and indication of higher production in the ensuing Sugar Season has been continuously depressing the market price of sugar. Due to the depressed market sentiments and crash in sugar prices, the liquidity position of the sugar mills has been adversely affected leading to accumulation of cane price dues which has already reached to an alarming level of more than Rs.22000 crore.
In order to stabilize sugar production at reasonable level with a view to improve the liquidity position of the mills thereby enabling them to clear the cane price arrears of farmers, Central Government has taken the following steps in past four months:
(i) Increased custom duty on import of sugar from 50% to 100% to check any import to the country.
(ii) Imposed stock holding limits on producers of sugar for the months of February and March, 2018 to stabilise the domestic sugar price.
(iii) Withdrawn custom duty on export of sugar to encourage sugar industry to start exploring possibility of export of sugar.
(iv) Allocated mill-wise Minimum Indicative Export Quotas (MIEQ) of 20 LMT of sugar for export during Sugar Season 2017-18.
(v) Re-introduced Duty Free Import Authorization (DFIA) Scheme in respect of sugar to facilitate and incentivize export of surplus sugar by sugar mills.
(vi) Extended financial assistance to sugar mills @ Rs.5.50/qtl of cane crushed during 2017-18 Sugar Season to offset the cost of cane.