As debt rises, sugar mills seek export subsidy sop

NEW DELHI: The sugar industry has made a fresh pitch for extending the controversial export subsidy on raw sugar citing a threefold jump in its debt burden from Rs 11,400 crore in 2008 to Rs 33,600 crore in 2013.

While the Cabinet is expected to raise the subsidy to Rs 4,000 a tonne from Rs 3,371 next week, the powerful sugar lobby also wants a fresh loan-restructuring package despite managing to extract major concessions on bank loans earlier. During bumper harvests, the industry typically cites its inability to pay cane arrears to pressurize the government into doling out concessions such as export and loan subsidies.

This time, however, the export subsidies have been questioned at the WTO, where Australia, Brazil and the US have alleged the subsidies aren't compliant with global trade rules. The Indian Sugar Mills Association said this is probably the first time that the mills are unable to even pay the Centre fixed fair and remunerative price to the farmers.