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Govt Has Given Only Rs 4,047 Crore of Promised Rs 8,500 Crore to Sugarcane Farmers: Sharad Pawar

The sugarcane industry has been witnessing a steep fall in prices following a record sugar production of over 31.6 million tonnes in the 2017-18.

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Updated:June 9, 2018, 6:27 PM IST
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Govt Has Given Only Rs 4,047 Crore of Promised Rs 8,500 Crore to Sugarcane Farmers: Sharad Pawar
File photo of NCP Chief Sharad Pawar addressing the media at a press conference. (PTI Photo)
New Delhi: Nationalist Congress Party(NCP) leader Sharad Pawar has written to Prime Minister Narendra Modi pointing out the "ambiguity and confusion" in the Rs 8500 crore central package announced to boost sugarcane farmers' income.

Pawar said the bailout package announced by the Centre was for Rs 8500 crore, but was mentioned as Rs 7000 crore in the press note published by the PIB.

Providing a breakdown of financial outgo on various outlays, Pawar said it fell far short of the Rs 8500 crore announced.

He said scheme for assistance to sugar mills by way of incentive on sugarcane is for Rs 1540 crore, the creation of buffer stock of 30 lakh tons is for Rs 1175 crore and interest subvention on augmenting ethanol capacity is for 1332 crore. The simple addition brings it to Rs 4047 crore, said Pawar.

"If one goes by the net financial outgo from the exchequer of Government of India on each of the decisions, it appears to be Rs. 4047 crores. Therefore, to say that the bail out package is of the magnitude of Rs 8500 crores or Rs 7000 crores seems to be incorrect," said Pawar in his letter.

The sugarcane industry has been witnessing a steep fall in prices following a record sugar production of over 31.6 million tonnes in the 2017-18. To relieve farm distress, the government also decided to increase Minimum Support Price (MSP) of sugarcane crop to Rs 29 a kg.

Pawar, in his letter said, that the MSP of sugar at 29 a kg at mill gate needs a "fresh look" as the average cost of production of sugar across the couuntry is in the range of 34-36per kg. Pawar said this was at odds with the factual position.

Indian Sugar Mills Association director general Abinash Verma pointed out that the proposed ₹29 per kg minimum price for sugar would not cover the cost of sugarcane, which is also set by the government; sugar prices would have to rise to ₹35 per kg to be sufficient.

Pawar said reimbursement crediting directly into a farmer's account was "not practical".

"In the past when similar scheme were implemented, the reimbursement was made to the sugar mills , as they are storing sugar in their godown by incurring expenses on storage, handing, interest and storage. It is logical that the reimbursement should be made directly to the sugar mills," said Pawar's letter.

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