Ways2Capital Reviews : Government To Mull Rs7,000cr Bailout Package For Sugar Mills

The government is likely to plan and announce a bailout package of more than Rs7,000cr to the sugar mills, as per media reports. This would help them to clear dues to the farmers.

The Cabinet Committee on Economic Affairs (CCEA) is scheduled to meet on Tuesday, June 5, 2018, to decide on the bailout, as per the media sources.

The softening of domestic sugar prices on account of record sugar output has resulted into operating losses for the sugar mills. This has led to spike up in the arrears payable to the farmers for the sugarcane purchased by the sugar mills.

The bailout package for ~5 crore sugarcane farmers is also a key proposition for the existing government from the viewpoint of 2019 general elections. This would be an influential move under the political lobby.

Government had also announced a subsidy for sugarcane farmers and stockpile build-up for sugar to cut surplus in the market.

India’s sugar output is likely to scale record highs in the next marketing season, with farmers choosing to plant the crop despite falling prices and ~Rs20,000cr in delayed payments from mills for the current harvest.
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About Bhoomi Desai