The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi has given its approval for providing a lump sum export subsidy @ Rs. 10,448 per Metric Tonne (MT) to sugar mills for the sugar season 2019-20. The total estimated expenditure of about Rs.6,268 crore will be incurred for this purpose.
The lump sum export subsidy will be provided for expenses on marketing costs including handling, upgrading and other processing costs, costs of international and internal transport and freight charges on export of up to 60 Lakh Metric Tonne (LMT) of sugar limited to Maximum Admissible Export Quantity (MAEQ) allocated to sugar mills for the sugar season 2019-20.
The subsidy would be directly credited into farmers' account on behalf of mills against cane price dues and subsequent balance, if any, would be credited to mill's account. [[The subsidy shall be in conformity with the provisions of Article 9.1 (d) & (e) of Agreement on Agriculture (AoA) and thus WTO compatible.
In wake of surplus sugar production during sugar season 2017-18(October - September) and sugar season 2018-19, notwithstanding various measures taken by the Government, the ensuing sugar season 2019-20 is expected to commence with an opening stock of about 142 LMT and season end stock are expected to be about 162 LMT.