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Cane farmers sceptical about bailout

Cite failure of earlier package; Cabinet to soon consider ₹8,000-crore proposal

The Centre may be planning a new bailout package of ₹8000 crore for the sugar industry, but both cane farmers and sugar mills said they had not received any money from the ₹1,540-crore subsidy already announced a month ago.

“What is the point of this ₹8,000 crore… when not a single farmer got one paisa from the previous subsidy,” asked Harpal Singh, president of one faction of the Bhartiya Kisan Union. He himself is a farmer growing cane across ten acres in U.P.’s Sambhal district.

He told The Hindu that the DSM sugar mill at Asmoli owes him about ₹3 lakh in payment arrears for his cane. That’s a fraction of the more than ₹22,000 crore in dues that sugar mills owe cane farmers, as record highs in production led to a crash in prices this year.

Food Minister Ram Vilas Paswan confirmed his ministry had forwarded the new proposal to the Cabinet and that it would come up for approval soon. Food Secretary Ravikant admitted that mills had not yet received any benefit from the previous subsidy announced on May 2. “We have not got any claims yet, because sugar mill owners have not been able to fulfil the conditions,” he said.

‘Tough conditions’

The May 2 announcement stipulated that mills meet an export quota and supply at least 80% of their contract value for ethanol to oil firms. Industry sources said that with global sugar prices even lower than domestic prices, exports were not viable; only about 75,000 tonnes have been exported against the requirement of 20 lakh tonnes.

The ethanol contract period only ends in November 2018, meaning that mills have not fulfilled that condition either. Mills were also required to maintain a reverse stockholding limit set by the government in February and March this year.

“In Feb.-March, several mills were under pressure to sell the sugar and pay cane farmers, so they breached that limit. About 40% of the industry is in default of that condition. It’s a retrospective condition, so they don’t even have the possibility of complying now,” said Abinash Verma, general secretary of the Indian Sugar Mills Association.

V.M. Singh, convenor of the Rashtriya Kisan Mazdoor Sangathan which represents cane farmers, had no sympathy for the politics behind the bailout. “This is a knee-jerk reaction after the Kairana bypoll,” he said.

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