Government has cleared a scheme of 6,600 crore rupees interest free loans to cash starved sugar mills. Information and Broadcasting Minister Manish Tewari said that this loan will be utilized for making payment to cane farmers.

The decision in this regard was taken at the Cabinet Committee on Economic Affairs, CCEA meeting held under the chairmanship of Prime Minister Dr. Manmohan Singh in New Delhi last evening. The sugar industry is facing financial problems due to higher cost of production and lower sugar prices in the wake of surplus production in the last few years.

Moreover the government has also slashed the Minimum Export Price (MEP) of onion with immediate effect to 350 dollars a tonne from the existing 800 dollars per tonne. The move is aimed at encouraging exports. The Commerce and Industry Ministry in a statement said that an inter-ministerial panel, after factoring in improvement in arrivals in the latter half of November and in early December, decided to reduce the MEP of onion.

The government said, a cut in MEP will help arrest the sharp fall in prices realised by farmers. It will also help in stabilising prices by balancing interests of farmers and consumers.