CCEA approves production subsidy of Rs 4.50/quintal to Sugarcane farmers

The Cabinet Committee on Economic Affairs (CCEA) has decided to pay a production-linked subsidy of Rs 4.50 per quintal directly to sugarcane farmers in the current crushing season.
Decision in this regard was taken at CCEA meeting chaired by Prime Minister Narendra Modi in New Delhi.
Key facts

  • This decision aims at helping cash strapped sugar mills clear arrears and would cost public exchequer about 1,147 crore rupees.
  • The production subsidy would be given to offset the cost of sugarcane and facilitate the timely payment of cane prices to farmers.
  • Currently, Sugar mills across the country are facing a liquidity crunch due to low prices of the sweetener in retail markets and they owe about 6,500 crore rupees to cane farmers.
  • In the last two crushing seasons, Union Government had given sugar export subsidy to millers in order to help them clear cane dues to farmers. But it was discontinued this season due to World Trade Organisation (WTO) objections.

Extension of Lines of Credit to African and other developing countries

  • 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.
  • The Lines of Credit will be provided under Indian Development and Economic Assistance (IDEA) Scheme which has been in operation since 2005-06.
  • IDEA scheme 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 Union Government would make a budgetary provision to the tune of around 3,772 crore rupees for this scheme.
  • It should be noted that Lines of Credit are an important component of India’s diplomatic strategy.
  • It has been very useful tool in generating goodwill and building long term partnerships with different countries.



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