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Package announced for cane farmers in five States

By Our Special Correspondent

New Delhi AUG. 23 . The Centre today announced a Rs. 678-crore assistance package for sugarcane farmers in Uttar Pradesh, Bihar, Punjab, Haryana and Uttaranchal and promised that a similar package would be announced soon for other major sugarcane growing States such as Tamil Nadu, Andhra Pradesh, Karnataka, and Maharashtra.

Briefing reporters after a Union Cabinet meeting where the decision was taken, the Union Minister and Cabinet spokesperson, Sushma Swaraj, said the Government was announcing one package for the northern States and another for the other States, since the nature of their problems varied.In the five northern States, the State Governments had announced what are called State Advisory Prices (SAP) over and above the Statutory Minimum Price (SMP) declared by the Centre. The farmers there were facing problems because sugar factories insisted on paying only on the basis of SMP and not SAP on the ground that it was not financially viable.

On the contrary, the other States had decided to follow the SMP rates and the farmers there were facing problems because of various reasons, including the factories' reluctance to even pay the SMP rates in some areas.

Giving details of today's package, Ms. Swaraj said the amount would be given to the State Governments as a loan at a concessional rate of interest of four per cent. It would be repayable over three years after an initial moratorium of three years. The money would be disbursed to the farmers through the District Collectors or Magistrates.

The package would be a one-time measure limited to the arrears for 2002-03 season and would be subject to the condition that in future the State Governments would not declare any type of SAP rate, either formally or informally, and that the special leave petitions pending in Supreme Court on the SAP issue would be withdrawn. "We have already spoken to the State Governments and they have agreed to the proposal in toto."

Out of the Rs. 678 crores, the maximum amount of Rs. 490 crores had been allocated for Uttar Pradesh, followed by about Rs. 85 crores for Haryana, about Rs. 40 crores for Bihar, and about Rs. 30 crores each for Punjab and Uttaranchal.

"The package with regards to the other States would be decided at the next meeting of the Cabinet'', she said.

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