CCEA to consider subsidy on raw sugar exports on Friday

In December, government had approved Rs 6,600 crore interest-free loan to sugar industry for making payment to sugarcane farmers.

hidden February 06, 2014 22:27:19 IST
 CCEA to consider subsidy on raw sugar exports on Friday

New Delhi: The Cabinet Committee on Economic Affairs (CCEA) today deferred a decision on fixing subsidy for exports of raw sugar for Thursday, amid differences between food and agriculture ministries.

The food ministry has proposed a cash subsidy of Rs 2,000 per tonne, while the agriculture ministry wants Rs 3,500 a tonne for exports of four million tonnes of raw sugar in the next two years.

The decision on the proposal has been deferred for the second time this week.

 CCEA to consider subsidy on raw sugar exports on Friday

Sugar policy. AFP

"The decision on giving subsidy for export of raw sugar has been deferred for tomorrow," Food Minister KV Thomas told reporters after the meeting.

He said that the Committee of Secretaries of food, agriculture, commerce and finance ministries have different views on the quantum of subsidy.

"We have to move another CCEA note taking into account the inputs shared by the concerned secretaries," he added.

Thomas, who met Prime Minister Manmohan Singh on this issue earlier in the day, further said, "The food ministry has got some stand on this issue. Finally, the CCEA will decide."

The subsidy would be Rs 800 crore on the basis of food ministry's proposal of Rs 2,000 per tonne, while the exchequer would have to bear Rs 1,400 crore if agriculture ministry's demand is considered.

"If subsidy exceeds Rs 800 crore, the budgetary support would be required," Thomas said.

The food ministry has proposed a cash incentive to sugar mills for exports of 4 million tonnes of raw sugar in two years as the industry is facing a liquidity crunch with prices of sweetener being lower than the cost of production.

Sugarcane price arrears to farmers has reached about Rs 10,000 crore from about Rs 3,000 crore at the start of the current marketing year in October 2013.

In December, government had approved Rs 6,600 crore interest-free loan to sugar industry for making payment to sugarcane farmers.

India is the world's second largest sugar producer and biggest consumer. Production is estimated at 25 million tonnes in the 2013-14 marketing year (October-September) as against 25.1 million tonnes in the previous year.

The annual domestic consumption is seen at 23.5 million tonnes.

PTI

Updated Date:

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