NEW DELHI, Nov 18 (Reuters) - India will, for the first time, pay sugarcane farmers in part for produce that they sell to money-losing mills, government sources said on Tuesday after a cabinet meeting chaired by Prime Minister Narendra Modi.
Modi’s government would directly pay farmers 45 Indian rupees ($0.68) for every tonne of cane produced, leaving mills to bear the rest of nearly 98 percent of the cost, one of the sources said, aimed at wooing politically influential growers and helping sugar companies recovering from a global glut.
The sources did not wish to be identified as the government is soon expected to announce the cabinet decision.
Shares of Indian sugar companies have been rising on hopes of government help and stocks of Shree Renuka Sugars, Simbhaoli Sugars and Bannari Amman Sugars shot up further on Wednesday.
Last month Reuters reported that India, the world’s biggest consumer and the No. 2 producer after Brazil, was considering directly paying millions of cane farmers.
$1 = 66.1900 Indian rupees Reporting by Mayank Bhardwaj and Nigam Prusty; Editing by Malini Menon