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Cabinet approves Rs 8,500 crore bailout package for sugar industry

07 Jun 2018 Evaluate

In order to boost farmers’ income by creating a buffer stock for sugar, the Union Cabinet has approved Rs 8,500 crore bailout package for sugar industry. This will also enhance ethanol production capacity and will fix a minimum selling price to cut mill losses.

The Cabinet approved Rs 4,440 crore soft loan for building ethanol production capacity to absorb the cane and a buffer stock of 3 million tonnes, besides for the first time fixing Rs 29 per kg as the minimum price below which mills cannot sell sweetener. These decisions are aimed at helping mills in clearing part of over Rs 22,000 crore arrears to cane farmers.

 Sugar mills are incurring losses as prices have fallen below production cost on account of record output of 31.5 million tonnes in the 2017-18 season ending September as against the annual domestic demand of 25 million tonnes.