The Union Government, concerned about the ever-shooting prices of essential commodities in the country, has started taking measures for increasing crop production, and extending financial assistance to the farmers. The center will offer loans at 4% to cane farmers, through sugar mills, enabling them to purchase seeds, fertilizers, pesticides and to bear other agricultural expenses.

The measures, as per government, are aimed at increasing the area under cane cultivation in the financial year 2009-10, amid high food inflationary environment, with sugar is being retailed at Rs 30 per kg.

The country has set a target of producing 160 lakh tones sugar this year, as compared to a domestic consumption of 230 lakh tones.

The government would have to remain dependent on import of both raw and white sugar, in a bid to maintain balance between gap and supply, thus, controlling rising sugar prices in the country.

The government will extend loans from Sugar Development Fund (SDF), through the department of food and public distribution, to the applicant sugar factories; and these loans are expected to be disbursed by December 31, 2009. Sugar factories are required to repay the loans in four years in four equal installments.