Sugar mills seek production subsidy scheme from govt.


Sugar mills have appealed to the Centre to credit production subsidy directly into the bank accounts of sugarcane farmers as lower ex-mill sugar prices, unviable exports and higher FRP (fair and remunerative price which was raised by ?25 a quintal) to ease liquidity crunch.
The Indian Sugar Mills’ Association (ISMA) made the representation to the Centre in this regard recently to overcome liquidity pressure among the mills.
Higher FRP
The Centre had raised FRP by more than 10% over last year viz to ?25 a quintal of cane. Compared with last year, the domestic ex-mill sugar prices are lower by 20% . The Centre helped the mills in 2015-2016 sugar season by paying ?4.5 for a quintal of cane directly to farmers as part of the FRP.
This reduced the liability of the mills towards farmers. The Centre should announce a similar scheme with a production subsidy of ?10 to ?12 a quintal in the current season which would cover a substantial part of the increase in FRP. The amount can be paid directly into the farmers’ bank accounts, ISMA said.
Association sources said, the Centre announced MIEQ (minimum indicative export quota) of 20 lakh tonnes so that some surplus stock can be moved out. Exports are, however, not viable as globally there is excess production and the market is depressed. Prices are also low in domestic and international markets, the sources said.
In the domestic market, the ex-mill price in Uttar Pradesh is ?28.50 a kg of sugar whereas the cost of production is ?35 a kg. The ex-mill price in Maharashtra is ?27 a kg against production cost of ?32 a kg. By the end of March, the all India sugar production for the current season (October 2017 to September 2018) stood at 281.82 lakh tonnes. This is 92.95 lakh tonnes higher than the preceeding season.


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