Centre approves incentives for sugar, cotton, jute farmers

In the run-up to the first anniversary of protests against three farm reform laws, the Cabinet Committee on Economic Affairs (CCEA)has approved a slew of measures that will support farmers growing sugar, cotton and jute.

At a meeting on Wednesday, the CCEA increased the price of ethanol extracted from sugarcane juice for blending in petrol to ₹63.45 a litre in the coming sugar marketing season starting December. This is an 80 paise hike from the previous year. The rate for ethanol extracted from C-heavy molasses has been increased by 97 paise a litre, while that of ethanol extracted from B-heavy molasses is up ₹1.47 as well.

Ethanol blending with petrol is expected to reach 10% next year and 20% by 2025. Oil marketing companies buy ethanol from sugar mills and distilleries at the rate set by the government. By reducing the sugar surplus and increasing mills’ liquidity, the rate hike is expected to reduce their pending arrears in payment to sugar cane farmers. Cane growers make up a sizeable chunk of protesters from western Uttar Pradesh and could also be critical voters in the State’s coming Assembly polls.

The ethanol blending programme also reduced the dependency on crude oil imports, said an official statement.

Price support to CCI

The CCEA also approved a committed price support of ₹17,408.85 crore to the Cotton Corporation of India (CCI) as reimbursement for its losses in procuring crops from farmers at minimum support prices over the last seven years.

“In order to safeguard the interests of the cotton farmers, it was expedient to conduct price support operations in cotton years 2014-15 to 2020-21 as prices touched the MSP prices. Price support operations help stabilise the prices and alleviate farmer’s distress,” said the statement, adding that around 58 lakh farmers and more than 400 people engaged in processing and trade were dependent on cotton for their livelihood.

The CCI is mandated to procure all Fair Average Quality grade cotton from farmers without any quantitative ceiling, as and when prices follow below the MSP rates set by the Centre, in a bid to protect farmers from distress sales. Over the last two seasons during the pandemic, the CCI procured a third of the country’s cotton production, paying 40 lakh farmers more than ₹55,000 crore.

Jute in packaging

In another decision, the CCEA approved reservation norms for the mandatory use of jute in packaging this year, stipulating that 100% of food grains and 20% of sugar must compulsorily be packed in jute bags. Such reservation consumed two-thirds of the total raw jute production last year. As the Centre itself purchases jute sacking bags worth approximately ₹8,000 crore a year to pack grains, it also ensures a guaranteed market for the produce of 40 lakh jute farmers, mostly in eastern India, and supports 3.7 lakh jute mill workers, largely in West Bengal.