June 4, 2018 / 5:56 PM / 2 months ago

Government plans 70 billion rupee bailout for sugar mills: Times of India

(Reuters) - The government is likely to announce a bailout package of more than over 70 billion rupees ($1.04 billion) to the cash-starved sugar mills to help clear dues to farmers, the Times of India reported on Monday, citing the Press Trust of India.

A labourer carries a sack filled with sugar in a store at a wholesale market in Kolkata, February 15, 2016. REUTERS/Rupak De Chowdhuri/Files

The country’s Cabinet Committee on Economic Affairs is scheduled to meet on Tuesday to decide on the bailout, according to the report.

The government is keen to placate India’s 50 million cane growers, who make up an influential political lobby, especially with national elections barely a year away in May 2019.

Last month, the government had announced a subsidy for sugarcane farmers and had said it would build stockpiles of sugar to cut a surplus in the market. (reut.rs/2HgR82x)

The country had outperformed market expectations in the 2017-2018 crop year, which led to a fall in prices, leaving sugar mills unable to pay farmers.

India’s sugar output is likely to scale record highs in the next marketing season, with farmers choosing to plant the crop despite falling prices and around 200 billion rupees in delayed payments from mills for the current harvest.

($1 = 67.0500 Indian rupees)

Reporting by Taenaz Shakir in Bengaluru; Editing by Anil D'Silva

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