Union Cabinet Approves Rs 3,500 Crore Sugar Export Subsidy

The decision will benefit five crore farmers and 500,000 workers employed in sugar mills and related ancillary activities

Union Cabinet Approves Rs 3,500 Crore Sugar Export Subsidy

Farmers are not getting their dues from sugar mill owners as they have surplus sugar stock.

The government on Wednesday approved a subsidy of Rs 3,500 crore to sugar mills for the export of 60 lakh tonnes of sweetener during the ongoing marketing year 2020-21 as part of its efforts to help them clear outstanding dues to sugarcane farmers.

Briefing media after the meeting, Information and Broadcasting Minister Prakash Javadekar said the Cabinet Committee on Economic Affairs (CCEA) has approved a subsidy of Rs 3,500 crore on exports of 60 lakh tonnes of sweetener and the subsidy amount will directly be given to farmers.


The CCEA has approved the subsidy at the rate of Rs 6 per kg for the current year, much lower than about Rs 10.50 per kg in the 2019-20 marketing year keeping in view favourable international prices.
Javadekar said both “sugar industry as well as sugarcane farmers are in crisis” because of high domestic production in the last two-three years. This year too, production is expected to be 310 lakh tonnes as against the annual demand of 260 lakh tonnes.

The decision will benefit five crore farmers and 500,000 workers employed in sugar mills and related ancillary activities. Sugar mills will be able to earn Rs 18,000 crore revenue from the export, said Javadekar, who is also union environment minister.

In a separate statement, the food ministry said farmers sell their sugarcane to sugar mills, however, farmers are not getting their dues from sugar mill owners as they have surplus sugar stock.

“To address this concern, the government is facilitating the evacuation of surplus sugar stock. This will enable payment of dues of the sugarcane farmers. Government will incur about Rs 3,500 crore for this purpose,” it said.

And this assistance would be directly credited into farmers' accounts on behalf of sugar mills against cane price dues and subsequent balance, if any, would be credited to mill's account, it added.