Punjab government reviving sugar mills and helping sugar cane growers
Punjab government has taken new initiatives to protect interest of cane growers and sustain sugar mills in the state. The government in 2015 has approved a loan of Rs 200 crore and interest subvention scheme for ailing sugar mills so as to help them clear cane arrears of farmers.
This loan is to be used exclusively for payment of cane arrears due to farmers. As proposed the state government is in the process of arranging the loan with state guarantee and interest subvention for three-and-a-half years. As per the plan there would be a two-year moratorium and sugar mills would repay the loan within five years.
The government has also drawn moralities for a proposal that involves subsiding the sugar mills against the high cane price – state advised price (SAP) – in accordance with the demands of cane growers. This is aimed at enabling sugar mills to get cane at an affordable price without compromising with the price being suggested by the cane growers.
According to the plan, the sugar mills have to shell out Rs 250 per quintal as the cane price and farmers will continue to get a higher cane price of Rs 295 per quintal. The government has to meet the difference of Rs 45 in price by giving a subsidy to the mills, which in turn would be passed to the farmers along with the due price. The payment of Rs 50 would reduce with the increase in wholesale sugar price in the country.
Besides under the plan to revive the ailing sugar industry the government is also taking initiatives to re-open distilleries attached to sugar mills in a few districts, including Gurdaspur, Nawanshahar and Nakodar.
According to a report prepared by the government the revival of these distilleries would require expenses to the tune of Rs 33 crore, Rs 62 crore and Rs 69 crore respectively. The government had last year announced relief released a sum of Rs 71 crore to pay up the sugarcane growers who had not been paid up by the private sugar mills in the state.
In the year 2014 the Punjab government had announced instant payment to sugarcane growers for their produce. This was done on the same pattern as is applicable for farmers into wheat and paddy growing.
As a part of strategy to make these mills more viable the government has decided to allow sale of molasses which is a byproduct of sugar to other states. So far the sale was allowed only within the state. Nine mills in the cooperative mills according to an estimate have been roughly manufacturing around 400 quintal molasses every year.