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Government likely to announce Rs 7,000 crore package for sugarcane farmers

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New Delhi: Post Kairana by poll loss and concerned over mounting sugarcane arrears of more than Rs 22,000 crore, the government is likely to announce a bailout package of over Rs 7,000 crore to enable cash-starved mills to partially clear the dues of farmers.

The amount will include creation of buffer stock of 30 LMT (lakh metric tonnes), for which the money will be transferred directly to farmers’ bank accounts. The minimum price for sale of sugar is likely to be fixed anywhere between Rs 30-Rs 20 a kg. The package is also expected to include a scheme worth over Rs. 4,400 crore for increasing the capacity for production of ethanol, one of the by-products of sugarcane.A decision in this regard is expected to be taken in a meeting of the Cabinet Committee on Economic Affairs scheduled on Tuesday, sources said.

Agrarian distress is expected to be a major poll plank in the run-up to the 2019 elections. Cane arrears was the central issue that led to the BJP’s rout in the recently concluded by-elections in Kairana, Uttar Pradesh – the largest cane producing state in the country. Last month, the government had announced Rs 1,500 crore production-linked subsidy for sugarcane farmers to help millers make cane payments but it did not help them tide over the simmering anger.


Sugar mills are unable to make payments to cane growers as their financial health has worsened due to a sharp fall in sugar prices after a record production of 31.6 million tonne (MT) thus far in the 2017-18 season (October-September). The maximum cane dues of more than Rs 12,000 crore have accrued in Uttar Pradesh alone, the country’s biggest sugarcane producing state.