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Incentives for sugar cane, cotton, jute farmers

  • IASbaba
  • November 11, 2021
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Incentives for sugar cane, cotton, jute farmers

Part of: Prelims and GS-III – Economy

Context The Cabinet Committee on Economic Affairs (CCEA) has approved a slew of measures that will support farmers growing sugar cane, cotton and jute.

Key takeaways 

  • The CCEA increased the price of ethanol extracted from sugar cane juice for blending in petrol. Ethanol blending with petrol is expected to reach 10% next year and 20% by 2025.
  • The rate for ethanol extracted from C-heavy molasses has also been increased.
  • Oil marketing companies buy ethanol from sugar mills and distilleries at the rate set by the Government.
  • Implication of the hike:. The rate hike is expected to reduce pending arrears  of the mills in payment to sugar cane farmers.
    • The ethanol blending programme also reduced the dependence on crude oil imports.

Price support to CCI

  • The CCEA also approved a committed price support of Rs. 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 (MSP) over the past seven years.
  • Function of CCI: 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 Rs. 55,000 crore.

Reservation norms for Jute in packaging

  • The CCEA also approved reservation norms for the mandatory use of jute in packaging this year, stipulating that 100% of foodgrains and 20% of sugar must compulsorily be packed in jute bags. 
  • Such reservation consumed two-thirds of the total raw jute production last year. 
  • Support to farmers: As the Centre itself purchases jute sacking bags worth approximately Rs. 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.

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