WELCOME FRIENDSTO UNACADEMY INDIA'S LARGEST LEARNING PLATFORM
COURSE TOPIC THE HINDU EDITORIAL TIMES 17 - JUNE - 2018
TITLE SWEET NOTHING
HEADLINE The bailout package for sugarcane farmers does little to fix structural flaws in the sector
SWEET NOTHING A little over a month after the Centre proposed a special cess under the GST to help alleviate distress among sugarcane farmers, the Cabinet Committee on Economic Affairs approved a 7,000-crore package for the sugar sector last week. This package, with a mix of assured minimum pricing and special incentives for increasing molasses and ethanol production to gainfully mop up the glut of sugar in the country, is independent of the cess proposal that was expected to raise 26,700 crore.
SWEET NOTHING Whichever terrorist group chose to kill him would have been aware of the consequences of his death. This has been a dark week in Jammu and Kashmir. Two security personnel with Bukhari were killed in the attack in Srinagar's Press Colony. On Thursday too, the body of Aurangzeb, a jawan with the 44 Rashtriya Rifles who had been kidnapped while on his way home for the ld holiday, was found in Pulwama district riddled with bullets. In Bandipora, two militants and anArmy jawan were killed
SWEET NOTHING Under the proposed bailout scheme, the government will procure sugar from mills at a fixed minimum price to help them clear dues to farmers, and also offer them other financial assistance. Only about I,/75 crore, however, will be used towards procurement of refined sugar from mills to create a buffer stock of 30 lakh tonnes. The bailout plan promises to pay 229 a kg. Sugar mills say this is below their production cost of 235 a kg, though it may dissipate(disappear) their immediate liquidity problems to an extent
SWEET NOTHING Rating agency Crisil reckons that the fixed price for sugar at mill gates and the buffer stock will at best help mitigate about 40% of the outstanding arrears to sugarcane farmers. And as production will rise again in the coming season, so will the extent of arrears All said and done, the Centre's sweetener for the sector does little to address structural problems and sticks to old-style pricing and stock-holding interventions instead of signalling a shift to marketdriven cropping decisions
SWEET NOTHING CONCLUSION The best way to address the problem of excess supply in the long run is to ensure some linkage between the price paid for sugarcane and the end-products it is used for; and encouraging the feedback from market prices to inform farmers' future cropping decisions. The current sops-driven solution could distort the agriculture sector further.
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