Centre issues official order for raw sugar export incentive

The subsidy is expected to help cut large stockpiles lying with mills and boost millers'cash flow.

March 05, 2015 03:11 pm | Updated 04:44 pm IST - NEW DELHI

Money losing sugar mills will get an incentive of Rs. 4000 a tonne. Photo: K.K. Mustafa

Money losing sugar mills will get an incentive of Rs. 4000 a tonne. Photo: K.K. Mustafa

The government today notified fixed subsidy of Rs. 4,000 a tonne for export of up to 1.4 million tonnes of raw sugar in the ongoing 2014-15 marketing year (October—September).

Last month, the Cabinet Committee on Economic Affairs (CCEA) had approved extension of subsidy on raw sugar export for the current year to help boost millers’ cash flow and enable them payment of sugarcane arrears to farmers that have crossed Rs. 14,500 crore so far.

Millers should utilise the incentive for making payment to farmers within three months of its receipt and utilisation to this effect should be submitted within one month through Sugar commissioner or Cane Commissioner, said a notification issued by the Food Ministry.

To ensure the incentive amount is used for making cane arrears, millers have been asked to open a separate no-lien bank account and furnish details of the same at the time of submission of the subsidy claim, it added.

Other conditions will remain the same as were last year, with the exception that sugar mills having the capacity to produce ethanol can avail the incentive if they offer to supply ethanol to Oil Marketing Companies (OMCs) under the Ethanol Blending Programme (EBP) up to 25 per cent of their annual production level of alcohol, said the notification.

That apart, sugar factories would also be entitled for such incentive for raw sugar supplies against import invalidation of advance authorisation license under Advance Authorisation scheme provided that such domestic supplies of raw sugar is refined and exported within 90 days of the supply, it added.

Last year, the Centre had announced a subsidy for exports of raw sugar up to 4 million tonnes in order to help the cash-starved industry clear sugarcane arrears to farmers.

The subsidy scheme ended in September 2014 as the new government did not extend for the current marketing year.

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