REFILE-India could pay sugarcane growers direct to help mills -sources
(Corrects Modi spelling in paragraph 2)
By Mayank Bhardwaj
NEW DELHI Oct 20 (Reuters) - India could for the first time pay sugarcane farmers in part for produce sold to debt-laden mills, two government sources said on Tuesday, as part of efforts to help politically strong growers as well companies struggling with a global glut.
Prime Minister Narendra Modi's government is encouraging mills in the world's No. 2 producer to raise exports to as much as 4 million tonnes this marketing year to cut both local stocks and cane dues to farmers in big states such as Uttar Pradesh and Maharashtra.
His government is now considering directly paying farmers 55 rupees ($0.85) for every tonne of cane produced, while mills will come up with about 98 percent of the costs, said one of the sources directly involved in the decision-making process.
The government would limit such pay-outs to 15 billion rupees ($230 million), said the second source.
Before Modi's office vets the proposal, the trade and finance ministries will discuss the idea, first mooted by the food ministry.
Food ministry spokesman N.C. Joshi declined to comment.
Trade and industry officials expect a confirmation once restrictions on announcements that could influence voters end post-local elections in the eastern state of Bihar on Nov. 5. Continuación...