New Delhi, May 9 : The government on Wednesday issued orders to implement the subsidy of Rs 5.5 per quintal of cane crushed to clear the dues of sugarcane farmers so millers can clear arrears that have reached Rs 20,000 crore.
It said the assistance would be paid directly to the farmers on behalf of the mills.
The subsidy was approved by the Cabinet Committee on Economic Affairs (CCEA) in its meeting on May 2 after sugar mills said that they were unable to pay farmers due to a slump in sugar prices in the domestic market.
In a statement, the Consumer Affairs Ministry said that due to higher sugar production against the estimated consumption during the current sugar season, domestic sugar prices had remained depressed, resulting in the dues of farmers crossing Rs 20,000 crore.
"To help sugar mills to clear cane dues of farmers, the government has decided to provide financial assistance of Rs 5.5 per quintal of cane crushed in sugar season 2017-18 to sugar mills to offset the cost of cane.
"The said assistance shall be paid directly to the farmers on behalf of the mills and be adjusted against the cane price payable due to the farmers against Fair and Remunerative Price (FRP) including arrears relating to previous years," the statement said.
The total assistance would be around Rs 1,540 crore which will directly benefit a large number of farmers, it added.
According to the orders issued by the government, only those mills which fulfill certain conditions will be eligible for the assistance which shall be provided on the basis of actual cane crushed or allocation of earlier estimated cane to be crushed during 2017-18 sugar season, "whichever is lower".
Mills having ethanol production capacity, and which have signed contracts with oil marketing companies for supply of ethanol, should have supplied at least 80 per cent of indented quantity of ethanol to qualify for the assistance.
Also, the mills should have filed updated online return relating to data on crushing of cane, production of sugar, sale of sugar and by-products as per provisions of Sugar (Control) Order, 1966.
"The mill should have fully complied with all the orders/directives of Department of Food and Public Distribution to the sugar mills during 2017-18 sugar season," the government said.