Maharashtra to provide additional subsidy to sugar
       Date 16-Mar-2015
       Source Business line
       Reporter Rahul Wadke
       News Id 1698
The Maharashtra government is planning to provide additional subsidy for sugarcane harvesters in the State. An announcement to this effect could be made in the current session of the State Legislature. The quantum of subsidy, which is currently about 25 per cent, could increase to 40 per cent. An average price of a harvester is in the range of ?1-1.25 crore, and the subsidy is being capped at ?25 lakh. In view of shortage of labour for cutting of cane, a subsidy scheme for harvesters was introduced in 2011, which was partially paid by the Centre and the State government. Decline in prices In the last four years there has been massive decline in sugar prices. In the international market, the prices have dropped by over 25 per cent. However, the labour problem has only become acute, as the rural workforce is not keen on cutting and transporting cane because the work is very laborious. This workforce has received some amount of education, therefore it prefers less strenuous work. A senior Maharashtra government officer said that although the prices of the commodity have decreased, the production and labour cost have increased, not only for the mills but also for the farmers. Therefore, additional subsidy will cushion the increase in the production cost and the break even period for the machine would be achieved faster, he said. Today, the machines are primarily bought by the sugar mills, farmers with large holdings and village based entrepreneurs for hiring out to small and medium farmers. Subsidy impact Higher amount of subsidy will attract more farmers and entrepreneurs in buying them, the official said. The official added that four year ago, when the scheme was launched, about 50 per cent subsidy was considered but the plan was dropped due to financial problems. An executive with a large farm equipment maker said that since Madhya Pradesh is already providing higher subsidy than Maharashtra, some entrepreneurs have started hiring out the equipment to farmers in Maharashtra. Higher subsidy by the Maharashtra government will create a level playing field.