The government today decided to pay a production-linked subsidy of Rs 4.50 per quintal directly to cane farmers in the current season. It is aimed at helping cash strapped sugar mills clear arrears. It would cost public exchequer about Rs 1,147 crore. The decision in this regard was taken by the Cabinet Committee on Economic Affairs (CCEA).<br/><br/>Union Power Minister Piyush Goyal told reporters in New Delhi that production subsidy will be given to offset the cost of cane and facilitate the timely payment of cane prices to farmers. Sugar mills are facing a liquidity crunch due to low prices of the sweetener in retail markets. The millers owe about Rs 6,500 crore to cane farmers.<br/><br/>Sugar export subsidy was given to millers in the last two seasons to help them clear cane dues to farmers, but the same has been discontinued this time due to WTO objections.<br/><br/>The CCEA also gave its approval to the extension of Lines of Credit to African and other developing countries for another five years from 2015-16 under Indian Development and Economic Assistance Scheme. The scheme has been in operation since 2005-06. A budgetary provision to the tune of around Rs 3,772 crore will be made for the scheme. <br/><br/>Lines of Credit form an important component of India's diplomatic strategy and have been very useful in generating goodwill and building long term partnerships. The scheme also attempts to promote India's strategic political and economic interest abroad by positioning it as an emerging economic power and partner for developing countries.

The government today decided to pay a production-linked subsidy of Rs 4.50 per quintal directly to cane farmers in the current season. It is aimed at helping cash strapped sugar mills clear arrears. It would cost public exchequer about Rs 1,147 crore. The decision in this regard was taken by the Cabinet Committee on Economic Affairs.<br/><br/>Union Power Minister Piyush Goyal told reporters in New Delhi that production subsidy will be given to offset the cost of cane and facilitate the timely payment of cane prices to farmers. Sugar mills are facing a liquidity crunch due to low prices of the sweetener in retail markets. The millers owe about Rs 6,500 crore to cane farmers.<br/><br/> Sugar export subsidy was given to millers in the last two seasons to help them clear cane dues to farmers, but the same has been discontinued this time due to WTO objections.