New Delhi, Mar 10 (UNI) NABARD and other scheduled commercial banks have already sanctioned a loan of Rs 2482 crore to sugar factories, to enable them to pay sugarcane arrears of 2007-08 sugar season, Agriculture and Food Minister Sharad Pawar informed the Lok Sabha today.
The entire interest of the loan amount will be borne by the Government.
With excess production of sugar in 2006-07 and anticipated high production of sugar in 2007-08 sugar season resulted in decline in open market prices of non-levy sugar. The open market prices declined by about Rs 450-600 per quintal in 2006-07 sugar season.
In order to ensure that high production of sugar does not lead to mounting cane prices arrears thereby causing distress to farmers, the Centre has taken a number of measures to help the sugar industry and sugarcane farmers.
The 'Scheme for Extending Financial Assistance to sugar undertakings 2007' has been announced by the Government in December 2007, to give loans from banks to sugar mills - private, public and cooperative sector.
Under the scheme, Mr Pawar said, the loans to sugar factories will be granted equivalent to the notional Central Excise Duty payable on total production on sugar during 2006-07 and 2007-08 sugar seasons to clear cane prices arrears of 2006-07 season and cane prices of 2007-08 season relating to Satutory Minimum Price (SMP) of sugar fixed by the Central Government.
The scheme provides full interest subvention limited to 12 per cent, he added.
UNI/JSS Mir AS1403